Although the past few trading days don't suggest it, we're still likely to be nearer the end of the bear market than not. And, as veteran investors can attest, since nobody knows where the ultimate bottom is until well after it's made, the key is being properly positioned before stocks make their turn for the better.
With that as the backdrop, you may want to consider adding e-commerce outfit eBay (EBAY 2.37%) to your portfolio now, in anticipation of a new bull market. While its guidance for the quarter now underway is less than thrilling (look for nearly nil revenue growth and similarly tepid earnings growth), the company's got three major things working in its favor for the foreseeable future.
1. eBay is digging into specialty
Although the two outfits were launched around the same time, Amazon (AMZN -0.55%) was always destined to overwhelm eBay. eBay was conceived as a way for small, one-man shops and individual consumers to sell their goods. Conversely, Jeff Bezos' idea for Amazon was a means for major brands to market their goods to the masses via a giant, online mall.
The differing shticks have always offered eBay one advantage, though, even if the company hasn't always capitalized upon it: the ability to offer specialized, human-touch services that just aren't possible with a high-volume, mass-market machine like Amazon.
One such example is last year's launch of eBay Live, a platform allowing shoppers to browse goods in a live, interactive environment, conversing with product experts. Its first live event focused on sports trading cards, which of course are often one-of-a-kind items. In this same vein, earlier this year eBay announced a collaboration with Notable Live, which facilitates live interactions between star athletes and their fans.
It's not just sports, though. A year ago, eBay unveiled an exclusive lineup of sneakers made for and designed by women.
These aren't the sort of personalized, curated, interactive shopping experiences any other platform could pull off anywhere near as effectively as eBay does. It's good to see the company finally leveraging its unique kind of reach.
2. eBay is fostering authenticity
With collectibles, of course, you can expect forgeries and fakes. eBay's addressing this liability in earnest. For instance, back in 2021, the company acquired Sneaker Con's authentication business. Sneaker Con "offers full vetting and verification of select sneakers bought on the marketplace," staving off knockoff or counterfeited footwear. eBay also authenticates high-end handbags and maintains a partnership with Still & Co. to authenticate luxury timepieces sold via its website.
These measures clearly protect buyers. But they're ultimately beneficial to sellers as well by virtue of maintaining a credible marketplace.
More to the point, while sites such as Amazon.com are actively working to remove counterfeit merchandise listings, no other online shopping site is quite as well equipped to offer the level of personalized authentication service eBay is.
3. eBay is encouraging re-commerce at the right time
Last but not least, eBay is plugging into the pro-recycling and refurbishing movement meant to curb waste and pollution.
In some regards, it's always done this. Although you can certainly purchase plenty of new items at eBay.com, the site's also always provided a way to sell worn clothing, secondhand electronics, used toys, and the like. Now it's stepping up its game. In late 2021, it officially launched a "refurbished" platform focusing on factory-refreshed electronics -- complete with a warranty.
The marketability of such goods has never been stronger. The company's recently completed annual survey of buyers and sellers of refurbished items indicates that 90% of these buyers have purchased "preloved goods" on eBay within the last year and that more than 90% of sellers of refurbished items say "sustainability" is important.
Outside of eBay's own findings, market research outfit Technavio forecasts the refurbished smartphone market will grow at an annualized pace of 13.7% between now and 2026, leading comparable growth of the entire refurbished electronics market.
Again, it's not a business that fits nicely within Amazon's wheelhouse, or any other major e-commerce name's besides eBay's.
This is the future eBay is built for
eBay has always been different from any other online-selling service. It was seemingly built from the ground up to handle individual one-off listings, whereas Amazon was built to sell stacks and stacks of the same items over and over again.
Both models work well enough. But it's only been very recently that eBay's taken advantage of the connection it can make between a buyer and seller of a one-of-a-kind item. Moreover, most of these initiatives have only materialized since the COVID-19 pandemic took hold -- a difficult time to prove any new business premise works.
Data source: Thomson Reuters. Chart by author. Revenue figures are in millions of dollars.
Still, this capacity to deliver personalized shopping solutions -- and personalized value -- is ideal for the kind of bull market on the horizon.
Yes, things will get better. The economy will eventually heal itself, and stocks will resume their recovery effort. And, it may all happen sooner than expected.
This impending rebound, however, may be marked by consumers' growing appreciation for value. While paychecks (at least in the U.S.) have grown since 2021, they've not kept up with inflation. Meanwhile, interest rates are about as high as they've been in years, and the New York Federal Reserve Bank reports household debt within the United States reached a record-breaking $16.9 trillion as of the end of last year; credit card debt is also into record territory. People will need value for the foreseeable future, or at least some added assurance that their splurges aren't risky wastes of money.
It's an environment that suits the new-and-improved eBay to a T.
