Wedge Partners Predicts Major Layoffs at eBay

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eBay Inc. (NASDAQ:EBAY) has seen a tremendous loss of users due to a fixed-price model.  But at the same time, some sellers have never been doing better using the site.  Regardless, eBay is losing money to an increasingly competitive growth in online retail stores.  And this may cause a decrease in their work force.

Research company Wedge Partners published a report stating that eBay’s sales are deteriorating and the company may have to layoff 10% of their employees.  This translates to about 1,500 jobs given eBay’s 15,000 employee count.

eBay is also dealing with lawsuits between Craigslist, Tiffany & Co., and Louis Vuitton.  Even though things seem bleak with the online auction retailer, they have pulled through many tumultuous situations before.  eBay will persevere because no one has been able to match the strength of their brand when it comes to buying and selling goods for a decent price.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at

Wedge Partners Predicts Major Layoffs at eBay Comments

  1. Patricia013 says:

    I fear what we’re seeing is the beginning of the end for Ebay. They’ve disillusioned their sellers – in fact, they’ve been kicking small sellers around since January and now its reached a point where most of them can’t make enough sales to warrant listing on the site. I know last year was great for me…I hovered just below the powerseller line – which is no small feat since I make everything I sell – but since January I can’t give my stuff away! So, after more than 10 years of constantly selling on Ebay I now have to list elsewhere. Rather than list on Ebay and watch my items roll off without good search exposure and without bids – I’m better off at the small upstart auction sites. Generally its free to list so whatever sales I make are mostly my profit. It’ll be awhile before any of them comes near the selling power that Ebay once had but I’m confident one or two of them will excel and Ebay will be long forgotten.

    I think this was a very reckless path that Ebay took – I know they’ve been gearing up for this change to retail probably since 2004…but they never thought that by losing sellers they also lost buyers too. Sellers buy as well as sell on ebay and now that they are leaving, their customers are following them! I’m sure they wanted to keep us and milk us for fees until they were ready to kick us out and go retail completely – I’m glad to see it backfiring. I’ll miss the old Ebay – for 10 long years I thought it was a friend. Business is business and I just can’t make sales on that site anymore!

  2. richard says:

    hi here is an example of how eBay appears – from a canadian seller perspective. I have sold books and magazines there for the last 10 years. Sales have declined.. and now ebay will put a cap on how much I can charge for shipping. It easily can cost 12.50$ to ship a heavy art magazine from here to the US .. and now eBay will force me to charge ONLY 4$– that 8.50$ difference is my ENTIRE profit . as my business is based on 9.99$ books and mags. The idiots who have crafted these policies have never worked retail, have NO clue about international trading.

    I will be moving to Abebooks, and payment by MOs and Googlecheckout – NO PAYPAL- as soon as I can.


  3. Ed says:

    forcing you to lower your shipping as it is your entire profit? Shipping is just that. Shipping. It’s not supposed to be part of your profit. It’s your way of scamming eBay to pay less for shipping fees. It’s sellers like you that have caused all of this to start; from the “false positives” within feedback to fool other buyers into dealing with you …to the shipping extortion you call profit. Plain and simple the dishonest sellers on the site brought it to what it is today and now you have to deal with the change. Sorry Richard but those are the facts as I have seen them over the years.

  4. Ed says:

    sorry, cant figure out how to edit quite yet. meant to say its your way of scamming eBay to pay less for your listing fees.

  5. Eddy says:

    “eBay will persevere”

    So did IBM during the period of ‘IBM and the Seven Dwarves.’ But then came the age of Personal Computers. IBM could have persevered with PCs too, but failed. Corporate did not listen to it’s customers, and corporate treated the new competition as insignificant.

    A strong IBM exists today, but it is not the dominant PC business.

    Today eBay is making the same mistake of not listening to their customers, and belittling the competition. Taking the same IBM path.

    eBay will survive these changes. But like IBM, eBay will no longer be the sole dominant business.

  6. Terry says:

    We face the same problem of fixed costs for shipping on Amazon and deal with it by raising the price or not selling heavy stuff. Amazon allows $3.99 now for shipping any book.

    At the same time there is considerable abuse, as Ed noted, in sellers jacking the shipping costs up beyond what is reasonable. This eats into ebay’s profit and their measures a likely a result of that.

  7. eris fisher says:

    Ed ,above is probably employed of Ebay, either that or he is the first altruistic retailer I’ve ever heard of.
    Ebay should have done the decent thing by stating their intentions to become another retail only portal, rather than hiding behind fatuous statements about being a sellers “partner”.

  8. Peter says:


    eBay are doing this not because they give a damn about buyers but because some sellers use overly high shipping costs to compensate for a lower list price of an item.

    Sellers do this for two reasons:

    1) A lot of newbie users forget to look at shipping costs when they look at the listing price of an item and by the time they click the “Buy” or “Bid” button, it’s too late, or,

    2) Ebay know they lose fees through sellers doing this

    Personally, I’ve sold a lot of stuff on eBay and have always charged accurate shipping because to me it’s an honest way of trading.

    But I’m also wise enough now to check excessive shipping costs before I bid or buy an item and I always take shipping into account – if other buyers are too stupid to check shipping costs first, then that’s their problem.

    It’s no different to going into a supermarket and falling for a “2 for 1″ offer only to realise that you’ve actually saved nothing. No-one forces people to buy anything, it’s up to the buyer to develop some common sense.

    eBay pretend their doing buyers a favour but they are just protecting their profits.

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