As if eBay (EBAY) needed yet another headwind to deal with. Now that the PayPal (PYPL) spinoff has shown just how slow the online-auction store’s growth has become, a new competitor has emerged.
Although it’s not an immediate major threat, current and would-be owners of EBAY stock may want to take note of a startup called Sell It Easy as a potential disruptor.
But eBay is still the undisputed king of selling things online, despite tepid growth … right? Maybe.
But eBay’s sellers are getting restless, finding less and less value in their relationship with the prolific middleman. Now might be the right time for a small, hungry player to take some market share.
Introducing Sell It Easy
Sell It Easy isn’t necessarily a new concept. The company simply takes care of all the complicated selling and shipping logistics for those looking to sell an item; the seller only needs to deliver the item to Sell It Easy using the pre-addressed, pre-paid mailing carton they receive from Sell It Easy once the seller and Sell It Easy agree on a starting price for the item.
If it seems an oddly familiar, that may be because it’s akin to iSOLD it on eBay franchises or eBay Drop-Off Stores that came into existence on the heels of eBay’s rise. The fact that both of those organizations are still around confirms there are still enough people who want to sell an item on eBay, but don’t want to deal with the hassle of selling an item on eBay to make it a viable business.
It’s such a viable business, in fact, that eBay itself has been doing it.
Most members and regular users of eBay may recall seeing a promotion of a service called eBay Valet, or eBay Sell for Me. Both services simply take the work out of the seller’s hands, handling the listing and delivery for the seller … for a fee, of course.
And those fees are where Sell It Easy could take a bite out of the eBay Valet service before eBay’s version gets a chance to find good traction. Sell It Easy charges no more than 12% of the item’s final selling price, while eBay typically charges between 20% and 40% to do the chore.
Sell it Easy also has an edge on the aforementioned iSOLD it on eBay stores or eBay Drop-Off Stores in that sellers don’t have to make a trip to a collection center to use the service. Rather, Sell It Easy can arrange for shipping from a seller’s locale to the Sell It Easy warehouse.
In other words, it’s a simple, cost-effective, one-stop solution.
Should Owners of EBAY Stock Worry?
Though still in business, it’s not like the bricks-and-mortar eBay middleman are taking a commanding control of the online-auction site. Why would current or prospective owners of eBay stock worry about just another upstart? Indeed, Sell It Easy actually uses eBay as one of its sales-venues, which could actually create new business for eBay.
The “pro” arguments are decent, to be sure. There are a couple of reasons, however, this or another service like it could end up becoming a noticeable headwind for the already-struggling eBay.
The first and most basic one is, Sell It Easy also uses other sites like Craigslist as a sales portal.
Whereas most individuals are more apt to use eBay’s services because it’s simply more credible and offers greater protection (to the buyer and the seller) than Craigslist can, an established reseller on Craigslist gets around that credibility/legitimacy problem.
The second and perhaps more important reason Sell It Easy could crimp eBay stock down the road is that it lays the foundation for the transfer of control from eBay to its customers.
An analogy would be the advent of unions in the workplace. As long as employees were divided, their choice was to do the designated job at the designated wages, or quit. By standing together, though, unions were able to flex their muscle back at the employer and effect change.
In a similar sense, the consolidation of customers into one cohesive unit that eBay significantly depends on means eBay may have to be more accommodating than it would were it just an individual seller. After all, there are alternatives beyond Craigslist, like Etsy (ETSY) and Amazon (AMZN).
No, it’s not a reason to expect eBay stock to plummet anytime in the near future. In fact, it’s unlikely Sell It Easy in and of itself could make serious waves for eBay. If the startup can prove the concept works, however, it will only be a matter of time before others begin doing the same, pressuring eBay to adapt and improve. Adapting and improving, of course, generally costs money.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
