How eBay Is Working To Expand Its Seller Base?

-10.74%
Downside
51.35
Market
45.84
Trefis
EBAY: eBay logo
EBAY
eBay

Recently, eBay (NASDAQ:EBAY)  announced a strategic relationship with BigCommerce that allows the latter’s merchants to seamlessly list their products and manage their inventory on the eBay marketplace. The partnership will give the merchants of BigCommerce access to eBay’s 162 million active buyers and increase the selection of products available on eBay’s marketplace. While this relationship promotes a multi-channel seamless online selling environment for merchants, it can significantly expand eBay’s seller base and enhance its portfolio of products. We believe that, as eBay works on its turnaround plant, this relationship should add positively to its transaction volume. As more small merchants use its platform for their products, it should attract more buyers and drive revenues for the company in future.

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More Small Businesses Can Make eBay’s Inventory Richer For Buyers

One of the key goals of eBay’s turnaround plan is provide unique and differentiated inventory for its buyers by partnering with boutique and small business owners to sell on its marketplace. Through the strategic relationship with BigCommerce, merchants running their businesses with BigCommerce will be able to efficiently sell on eBay’s market place. The integration will allow sellers to operate more efficiently with the ability to list, manage and sell on the eBay marketplace through BigCommerce’s control panel. It will also enable sellers to sync stock levels and eBay orders with their online stores, create bulk listings on the eBay platform rapidly and reach more buyers using eBay’s global shipping program. As eBay focusses on bringing unique and differentiated inventory to its platform, a seamless multi-channel selling experience for small merchants should attract more sellers to its marketplace. BigCommerce has tens of thousands of merchants selling in more than 150 countries and fast growing brands are selling up to $ 50 million annually on its platform. Providing its buyers with access to this huge seller base on its platform can benefit eBay and improve its transaction volumes.

We estimate the average spend per user on eBay’s platform to increase from around $523 in 2016 to $556 by the end of our forecast period.

If the average spend per transaction on eBay’s platform increases substantially and reaches $600 by the end of our forecast period, there can be a 10% upside to our price estimate.

As eBay executes its turnaround plan, it aims to broaden its offering.  Clearly, the partnership with BigCommerce should enable the company to move closer to this goal. A rich inventory of products offered by the numerous sellers on BigCommerce’s platform should attract more buyers in future and can potentially increase the average spend on eBay’s marketplace. If the company is able to enter into more such strategic relationships in future, eBay should see growth in its revenues in the long term.