Amazon Is Killing eBay

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Investors are already worried about the performance of eBay's (Nasdaq: EBAY) namesake site during tonight's quarterly earnings report, so why not throw a little more dirt on the grave?

Web-traffic tracker Compete.com posted visitor tallies for the telltale seasonal month of December yesterday, and the news isn't good for eBay.com. Compete.com claims that eBay attracted roughly 80 million visitors last month, flat with last year's performance.

The same can't be said for other companies angling for the holiday dollar:

  • Amazon.com's (Nasdaq: AMZN) visitor count surged 20% last month.
  • Target (NYSE: TGT) saw a 16% spike at its namesake site.
  • Wal-Mart (NYSE: WMT) greeted 15% more potential shoppers to walmart.com.

That's just half of the story. Not all unique visitors are alike. Some come by more often, and this is where Amazon is truly shining over its retailing rivals. The average Amazon.com visitor made 4.5 visits to the site last month. The same can't be said for the dot-com stickiness of traditional retailers.

 

Visits per Person

Amazon.com

4.5

Walmart.com

2.6

Target.com

2.3

Best Buy (NYSE: BBY)

2.1

Macys (NYSE: M)

2.1

J.C. Penney (NYSE: JCP)

2.0

Source: Compete.com.

Why does Amazon rock? The most logical answer is the success of Amazon Prime, where members pay $79 a year for free two-day shipping on any Amazon-stocked item. It's like virtual flypaper when it comes to stickiness, since shoppers try to maximize their memberships by turning to Amazon first when they need to buy something.

Will the bricks-and-mortar chains get it? Will they follow suit? The non-Amazon retailers are drawing respectable traffic growth, but Amazon is gaining in both traffic share and even more in session share.

Can the rest of the online space afford to let Amazon have all the fun? Time is running out, and Amazon keeps pulling further and further ahead.

If "buy it now" doesn't work, how about "read it now" for these recent headlines:

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Wal-Mart Stores, eBay, and Best Buy are Motley Fool Inside Value picks. eBay, Best Buy, and Amazon.com are Motley Fool Stock Advisor picks. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 177 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 21, 2009, at 3:39 PM, Dafezzman wrote:

    Amazon Prime is $79 a YEAR, not $79 a month... and its awesome.

  • Report this Comment On January 21, 2009, at 3:41 PM, bulldawg0317 wrote:

    What a stupid title for a stupid article. Amazon is killing Ebay? The same Ebay that has four billion in cash and zero debt? And why didn't the writer show the visits per person of Ebay? This article is disingenuous at best, a farce at worst. Four billion in cash, no debt, and still idiots slam them. Unbelievable.

  • Report this Comment On January 21, 2009, at 3:57 PM, dealmastergee wrote:

    How is Amazon killing eBay if eBay still has the most Web visitors of all on-line retailers? Let's see where Amazon's saturation point is before such a foolish statement.

    I still find better values on eBay and I always compare both. For Shoppers willing to put in the due diligence when shopping eBay is the much, much better place to buy.

  • Report this Comment On January 21, 2009, at 4:19 PM, realslfan wrote:

    Rick Aristotle Munarriz, Foolish contributor, your stats as testament to the title of your article are comical.

    As others so accurately posted, eBay has no debt, tons o' cash and the largest market share out there. Further, for all we know (due to your inadequate "reporting"), the 4.5 visits to Amazon per month could be the same individual looking at their tracking status or to see if their order shipped.

    I've been reading the Fool for ages and can't remember the last time I saw an article that was truthful to the state of any business, especially eBay. Get the chip off your shoulder and start reporting something that can hold it's water.

  • Report this Comment On January 21, 2009, at 4:35 PM, Gadzmo wrote:

    And to make it even easier to shop and search on EBay you can always use GetItNext.com. Its a search engine exclusively designed for EBay and its free to use.

  • Report this Comment On January 21, 2009, at 6:26 PM, Patricia013 wrote:

    John Donahoe wanting to make Ebay into a cheap and cheesy Amazon clone is killing Ebay - nothing else is killing Ebay. That company is dying by its own hand. As an ex-10 year seller on Ebay I can tell you I bought heavily during the holiday season BUT I bought on Amazon...why? I sold pretty well too BUT I sold on my website, on Bonanzle and on Etsy. I wouldn't buy from a company where I've been called "noise" and where my 100 percent feedback rating of over 3,000 and my 5.0 DSR's are not welcome simply because I am a small seller. This is just the BEGINNING of Ebay's slide into oblivion. Should Donahoe be allowed to run rampant all this year you will not recognize Ebay this time next year. They will be a shrunken whimpy shadow of their former robust and wealthy self! Even their diamond sellers will begin leaving - the miserable single digit sell thru rate they are getting can't possibly be worth the time and effort they need to put into listing the thousands of junk items they list - even with free listing fees. This is not new to us sellers - we've been warning about it for months now. We were just waiting for the damn to break ;-)

    Yes, Mr. Donahoe you're "disruptive innovation" sure worked like a charm. Amazon, Bonanzle, Etsy and the others thank you very much!

  • Report this Comment On January 21, 2009, at 6:36 PM, bestkindlesite wrote:

    I completely agree with Patricia. I haven't sold on eBay in a couple of years and I cannot believe the changes they have made to the GUI. Check out my blog post about Amazon and eBay. Amazon is gaining ground and eBay has flatflined. Amazon is going to be ahead of eBay in the very near future.

    http://bestkindlesite.com/

  • Report this Comment On January 21, 2009, at 8:41 PM, amorphic8 wrote:

    The fact that ANYONE uses EBay has amazed me ever since my first experience winning an auction, paying for the merch, never receiving it after waiting 3 weeks and repeated efforts to contact the seller, and being charged a fee by PayPal to get my $$ back.

    On top of that, I got retaliatory negative feedback from the seller (which I understand is no longer possible) because my refund request dinged his his feedback.

    End result:

    no item, wasted several weeks of my time, was charged a fee, 1 negative feedback (my only rating).

    Goodbye EBay and you're evil accomplice PayPal; I have no use for either you.

    I am not in the business of online selling but I am a very experienced buyer. I am actually disappointed if I can't find the item I want on Amazon and have to order from another site.

  • Report this Comment On January 21, 2009, at 8:42 PM, DLweld wrote:

    Ebay is such a great example of galloping management incompentence ruining a vibrant and successful company. Ebay had a unique attribute - it was the place to go to find fascinating and wonderful stuff for auction - and where to find valuable items too - it was becoming the Sotheby's and Christies of ecommerce and with the chance to dominate even these. I was a biggish ebay seller and buyer for many years, I don't list any more as there's little point, and now my standard search, which used to pick up many items of interest to bid on, now only returns a few. Little point logging on any more really - with the neat stuff going, the "eyeballs" are going too, Ebay's no longer unique, just another big box estore and there are better ones out there. I wonder too if ebay had any idea of the demographics of their customers - the despised small sellers - the (ex) sellers I know locally certainly aren't the mom and pop borderline poverty types but are rather well-off collectors with tons of disposable income - I guess they're elsewhere now.

  • Report this Comment On January 21, 2009, at 11:25 PM, Milligram46 wrote:

    I agree with <b>bayrefugees</b>. Amazon is not killing eBay, eBay is killing eBay. Their policies both at eBay and PayPal have become so seller unfriendly, rate increases, nickel and diming buyers, and making the buyer/seller rating tools more convulted wrapped in the cloak of it being for our benefit. I haven't bought or sold anything on eBay in about a year now because of all the policy changes, and shoot, never mind Amazon, Craig's List is free.

  • Report this Comment On January 23, 2009, at 8:13 AM, megalaser wrote:

    It's true what they say, eBay is killing eBay, yes they are huge but they are in decline and all it takes is a serious contender like Google to launch an auction service and then eBay are toast. I have found this great tool though that makes it possible to find items on eBay quickly without having to keep navigating their site: http://www.stuffalert.com

  • Report this Comment On January 23, 2009, at 11:57 AM, beckit wrote:

    Ebay is dying due to Meg Whitman & John Donahoe's "Disruptive Innovation" scheme. Their outrageously insane plot to kill the smaller sellers off their site to make room for huge mega-sellers (now called "Diamond Sellers") with their extremely low turn over rate and POOR customer satisfaction stats was doomed from the start. Somehow, the "brains" at HQ failed to recognize that the small sellers were also the buyers on ebay.

    Search the internet for "Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO Petition" at petitiononline to read what userts are really experiencing.

    Search glassdoor for ebay employees' views on the poor upper management of ebay.

  • Report this Comment On January 23, 2009, at 4:08 PM, dgmennie wrote:

    Perhaps the biggest online ripoff to date is the de facto requirement that all purchases made on eBay must be done through PayPal. No more checks, cash, or money orders! This is such a blatant exploitation that words to describe it simply do not exist. Those "little folks" who sell on eBay now get hit with a minimum of THREE fees: listing fees, final value fees (comissions), and transaction fees before they see a cent of profit.

    Even more fees await the unwary for all kinds of listing "enhancements" (like boldface type, extra descriptors, and special placements) that are suppose to bring in the bidders and buyers. Fat chance! Just a bunch of software tricks that cost the eBay establishment NOTHING.

    You can bet that those big-box sellers eBay is now in bed with get all kinds of special favors and breaks that are never offered to anyone else. Where is some serious competition to eBay now that it is needed more than ever? How much abuse is the collecibles marketplace suppose to take from these clowns before it says ENOUGH!!!???

    I just looked at my cash and it says "legal tender for all debts public and private." Nothing there about PayPal. Can we not get a CLASS ACTION LAWSUIT going that will take down these idiots permanently?

  • Report this Comment On January 24, 2009, at 6:41 PM, Seller101 wrote:

    What eBay fail to analyze is that their policies and changes are not gear to help their core supporters, the sellers! We the sellers are the ones that make the money for ebay, the direct consequence is very simple we the sellers are no listing as many items as we once did, because the Sellers fees are used to staff programs geared to prevent sellers from selling on Ebay, the coveted Best Match search is fatally flawed, it list the most expensive items first –hence making more money for ebay, if they sell- We can't believe that eBay is using Their coveted ‘Best Match” search engine, As their vehicle for a better buyer experience! The reason most sellers are switching to fixed priced sales is because their merchandise is getting buried in the "Best Match" black hole.

    The Best Buyer Experience is coming to eBay To find great products at great prices! Buyers come to eBay to find a bargain, Buyers come to eBay to experience the eBay That wants to offers the best deals in the internet! But now eBay default search systems, List more expensive items first with total disregard of ending times or pricing These changes are causing a tremendous Decrease on sales with the direct consequence Of a decrease on the number of successful listings.

    The DSR system is another failure, the feedback rating is not based on a 100 point scale, For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With ebay, 4,5 is average and 5 is good! Consequently making the seller looks bad, For this reason, good sellers offering great service and products are being suspended from ebay by record numbers, this cuts the core business at ebay Unfortunately, Ebay management become so enraptured with its tale of its own brilliance that they thought they could afford to batter and bleed the sellers over and over again, forever. Ebay Stock was $30-$32 less than a year ago and yesterday dropped to $11.67 A year ago, EBay said it would reduce listing fees and make selling standards more stringent to attract buyers, on the contrary sellers are listing less not only that but the smart ones sold their ebay stock! It won’t be too long too see ebay stock fall to $6 or less, Ebay is pushing away its partners, sellers and buyers, it is only going to make profit softer and push away investors, as ebay CEO said “We didn’t gain ground, but we didn’t lose any.” Lets see if he can say the same in this coming summer.

  • Report this Comment On January 29, 2009, at 5:23 PM, aaafools wrote:

    We sell products on Amazon for less than selling on ebay, because, it is way more dangerous to sell on ebay, and dealing with ebay buyers required much higher degrees of pampering. We sold 10 times more products thru Amazon than Ebay, and we received 15~20 times the volume of email messages thru ebay. We have closed 2 of our 4 stores on ebay so far, and might even close the 3rd one by summer...

    You got the picture?

    Amazon didn't kill Ebay....Ebay does...and they will take paypal with them into the grave.

  • Report this Comment On February 05, 2009, at 10:39 AM, NYMArts wrote:

    Ebay is Killing Ebay.

    Amazon is just getting a Big Ego over it.

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