PayPal pushes eBay earnings
Sticking to its knitting
eBay is celebrating a 20 per cent jump in profits in the last quarter, thanks mainly to its payment system PayPal.
The online tat bazaar grew net revenues in the first quarter of 2011 to $2.5bn, up 16 per cent and net income was up 20 per cent to £398m.
eBay's chief executive John Donahoe said 2011 was off to a strong start thanks to eBay's growth in the US and strong global growth by PayPal.
Now that it is rid of Skype, which provided $125m via the repayment of a note in the period, eBay's business is split between marketplaces and payment services such as PayPal and BillMeLater.
In the three months up to 31 March 2011, eBay's markets made revenues of $1.55bn and its payment services made $992m.
By geography the US accounts for 45 per cent of this and international the remaining 55 per cent.
In terms of active users eBay claims 95.9 million active auction users, up five per cent year on year. Its payments services claim 97.7 million active registered users, up 16 per cent year on year. Net payments in the quarter were $424.6m, up 26 per cent.
In the second quarter eBay expects net revenues in the range of $2.55bn to $2.65bn.
forcing the use of paypal and charging fees for both = profit
forced to use paypal
Its not suprising they are making more money from paypal as you are pretty much forced to use paypal when you list something on ebay, If you put in your listing that you even offer rival payment services such as google checkout as a way to pay your listing will get flagged.
If you try selling low value items (£2 or under) by the time you have taken in ebays listing fee, final value fee and paypal fees there is hardly anything left in profit.
I've tried listing on rival services such as ebid but there just arent enough people using them at the moment to make any decent money from sale on there. It needs a Microsoft, Apple or Google with deep pocket to buy one of the rival services and spend money on marketing to get more people visiting them
apparently, if you sell something on ebay and the buyer specifically requests the cheapest form of postage, which takes forever and has no tracking, then complains that the item hasn't arrived, paypal considers you entirely evil and responsible and steals the money back from your account - even if that means putting it into a negative balance. even if you've never had any kind of negative feedback as a seller before.
that sure is a good way to make a profit...in the _short_ term.