So eBay had their earnings call this week and it went ok considering all the HORRIBLE downtime and tech issues they had in Q4 (anyone remember the total Cluster-F of October when they decided to block listings for Item specifics and killed everything !)
But one of the things eBay keeps harping on is internet sales tax. So first, let me be perfectly clear, I live in a Nexus state. So in a Nexus state, it operates like it did before the Supreme Court allowed all these money grubbing states to expand their reach. I only collect from people who also live in my state – because we all have a Nexus in that state so we are required to collect and pay sales tax. Before the Supreme Court decision, that was that. Now, certain states have extended their reach stating that even though I don’t live in California, I must collect it from the good people of California who buy from me and give it to the greedy state of California. So companies like Etsy and eBay and others collect that on the behalf of sellers (for various reasons, one being so they don’t have a liability for it!) And they are not alone, lots of states are doing it because they love the extra money because politicians cannot control their love of spending. Politicians are like crack whores when it comes to money. So this WILL NOT CHANGE unless the law is changed so eBay is trying to spin a story — when the story has already been told and it is a done deal. Just collect the tax, take your commission and quit blaming the eBay failings on sales tax — because that is just not why eBay isn’t doing well.
So eBay are bitching about something that has already happened. The horse has already escaped the barn and has been run over by the car — quit complaining about it. IT IS DONE.
And every other tech company is dealing with it and consumers are paying the price — not eBay.
GET THAT — YOU AS A CONSUMER PAY IT — NOT EBAY. They are only the collection mechanism and in a lot of states, the collection mechanism pays a commission. So they are not “losing money” They are charging fees to their sellers for the transaction, they are probably getting a commission for the collection from most states and ultimately, the BUYER IS PAYING THE TAX. So eBay bringing it up in their earnings is a SMOKE SCREEN.
It is a smoke screen because they want to blame the sales tax — everyone hates taxes – for their crappy earnings. And they want to bake in any future crappy earnings with a “must be the sales tax” story. IT ISN’T THE STORY.
What is the story is that eBay are in decline. They are in decline from years of chasing Amazon and losing. They are in decline from not liking the very thing that made them unique (auctions, collectibles, the used market) and wanting to be something else. They are in decline from years of poor management. They are in decline from years of treating sellers poorly (and those sellers leaving for other marketplaces and those sellers were also buyers) They are in decline from years of not having a way to block bad buyers who abuse sellers and steal and defraud. They are in decline from other marketplaces (such as Etsy, Mercari and Amazon) gobbling up the used market because eBay treated it like it wasn’t worth anything. They are in decline from focusing on program that nobody wants (Guaranteed Delivery, Managed Payments, Seller Hub) and devoting programming resources there while not focusing on core things like uptime, payments being able to be processed and listings being seen and searched effectively.
I could go on here but in business, you have to maintain your core, even if it means pulling back from your pie in the sky for a little bit and eBay haven’t been good at doing that.
Sales Tax has NOTHING to do with their failures. And if you still think it does, consider this. Why isn’t it affecting Amazon in the same way when they are expanding and growing. Goodness, they haven’t even finished their new warehouse and they just announced another one that is coming later this year for 1million square feet. So yeah, sorry eBay, nobody believes your story. Go focus on business basics and let’s see what you say next quarter — hope it is more honest and realistic than “the sales tax did it” because that is about as believable as “the dog ate my homework”