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Macy’s In Australia: No, John, It’s Not All Thanks To eBay

Written by Frank Hayes
January 26th, 2012

eBay’s bid to become the link between big U.S. retailers and Australian customers is off to a less-than-sterling start. On January 18, eBay CEO John Donahoe bragged to an earnings call audience that Macy’s used eBay Australia to get a foothold Down Under without creating a brick-and-mortar presence. “Macy’s saw that the Australian dollar was very strong,” Donahoe said. “The Australian consumers are very open to import and they’re looking for brands. And Macy’s opened up a store in eBay Australia, and so they’re now reaching consumers in Australia on the eBay platform without having to have assets reside in the country.”

Well, sort of. Actually, Macys.com was already selling to Australian customers last summer, using third-party vendor FiftyOne to handle shipping, customs, currency issues and customer service. And the Macy’s eBay Australia store currently has no products; Macy’s spokesman Jim Sluzewski said the eBay store was tested only through the end of 2011 and Macy’s is now evaluating its results. So Macy’s wasn’t depending on eBay to reach Aussies, and the eBay store was already closed when Donahoe did his bragging. Other than that, he got it right—we hope.


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2 Comments | Read Macy’s In Australia: No, John, It’s Not All Thanks To eBay

  1. Ric Says:

    John Donahoe is so anxious to impress his Wall Street Masters that it comes as no surprise he exaggerated and got the facts wrong during the conference call.

    Of course this is not the first time eBay’s CEO has played fast and loose with the facts in an effort to paint a rosier picture than reality would dictate. He will exaggerate facts as demonstrated here, or omit important relevant facts when discussing results during conference calls.

    One fact he continues to side step / omit is the fact that GMV as he has reported has not factually increased as he has purported, but rather, GMV as he reports it is reflective of the fact that eBay has ratcheted up pressure on sellers to include shipping costs in the selling price of an item.

    In doing this, he can say GMV has increased when in fact the increase is largely accounted for by the fact that postage costs are now concealed as part of the selling price instead of being separated.

    Before eBay assessed the penalty fee on shipping costs (which can only be avoided by sellers when they artificially inflate the selling price of their item by adding shipping costs into the selling price of an item) eBay was unable to count shipping revenue as part of GMV. Now that eBay has coerced so many sellers into adding shipping costs into the selling price, eBay now counts shipping costs as Gross Merchandise Value because they have engineered it so that it is no longer possible to separate out those costs.

    If so many sellers were not avoiding the Final Value Fee eBay imposed on shipping costs, eBay would lose much of the artificial GMV growth they have been reporting, and investors would have a much clearer picture of eBay’s actual marketplace health.

  2. John Says:

    The fact is he is chasing away business for retailers with his policies. You have droves of ebay sellers now selling their inventory on their own websites and other venues. Mr Donahoe is attempting to lure huge retailers to ebay and he forgot one thing, a small business online has a much lower overhead and prices are cheaper on that small business website. Buyers are finding those sites and Mr Donahoe is having to bend the truth and continously raise fees on ebay to cover up his blunders.

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