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EBay’s B2B Opportunity | Winner Take All


– If eBay wants to be successful in B2B, they have to do some linear stuff. – I don’t go to eBay
as a business customer to get quality stuff, it’s
not what comes to mind. – It means they’ve gotta change the way that eBay does things. We’re very bullish on B2B, eBay has said they have about
four billion dollars in B2B. There’s a Q and A with their head of B2B in late June of 2019, Marni, and she said they’re doing about four billion dollars in GMV. All right, so if eBay’s doing about ninety-five billion
dollars in total GMV, you take the four billion off, you got ninety-one billion
for your eMarketer number. eMarketer, if you’re
listening, update that. They say they’re focused
on business and industrial, automotive parts, accessories,
electronics, collectibles. I don’t see how collectibles
is a B2B category, but whatever, and fashion. I think eBay’s problem
is this, well twofold. One, their brand is not
known for new stuff. It’s known for used stuff. And I think, especially
in the business customer, from a mindset standpoint, you don’t want used
stuff, you want new stuff. – I don’t go to eBay
as a business customer to get quality stuff, it’s
not what comes to mind. – You go for discounts.
– Right. – And number two is they have
no fulfillment capabilities. So I think the B2B things that they’re doing currently today, four billion is not a small
number, four billion in GMV, I think it’s really pack and ship, it’s very much so, kind of like very small, relatively commoditized things that don’t have high shipping cost, that don’t have a high
dependency on fulfillment in B2B. – And don’t have specialized
fulfillment capabilities like certain things, if you get into kind of
industrial products or chemicals, it requires certain fulfillment capabilities and often have a pretty
regional reach to them, with these small commoditized stuff. – And let’s go back to
Devin’s tweet, right. Devin said, “We don’t
compete with our sellers.” I think that’s the third issue, I think if eBay wants
to be successful in B2B, they have to do some linear stuff. This can’t solely be a marketplace play. They need to start doing
some stock holding. – I think it is a market-making strategy which is the way Amazon often operates with their linear selling
is, I’m gonna sell this, I’m gonna do it cheap so that you know to come to me to get these products, and then I’m gonna fill
out the breadth of that with third party products and make my profit on that stuff. I think eBay could definitely take a page out of their book for B2B. I think the other challenge
eBay is gonna have is, as you’re suggesting, fulfillment. We were talking about UPS
and FedEx the other day. That’s an opportunity
if you’re gonna say, okay, how can we go help
someone other than Amazon be the dominant winner in B2B that needs help with fulfillment. eBay would be a really
strong case in point there. – Exactly. eBay would be a great strong, eBay can make
a commitment to say, here are the few thousand
or few tens of thousands of key SKUs in each one of these B2B verticals that I’m going after and now
I’m gonna make an investment to get into the stock holding. I think it’s a necessary evil. I know they’ve been very
reticent to do that, and they would need to educate investors about why that’s appropriate, but you’re just not going to
able to have the reliability that a business customer expects, right? They have a lot of long-tail stuff, but you need the main,
heavy-hitter things in stock, cheap, and very quick delivery times. It means they’ve got to change the way that eBay does things, and we’ll see. I don’t know if Marni’s gonna be able to actually change some of how
eBay fundamentally operates or where Devin’s head is on this. I think they have a
great shot at doing it. – B2B is definitely one where
they’re not so far behind that they can’t compete in it, whereas retail, Amazon
has pretty much emerged as the winner there. – Yes. – And they definitely have a shot to actually be very successful in B2B. It’s still very green-field. Even though Amazon is at ten billion GMV, if you look at the size of B2B, that’s peanuts, comparatively. And there’s a lot of opportunity
for someone like an eBay, and there’s Walmart, is also now entering in a bigger way into B2B, to come in and actually compete
with Amazon successfully, where Amazon doesn’t have
a twenty-year head start. – Mm-hmm. Yep, exactly. Still waiting on the B2B distributors to get into the game,
but still got some time.

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