Small Traditions LLC/SCANDAL UPDATE

[BobC]

Originally Posted by Lorewalker

What? If PWCC did 150 million in gross sales on eBay, what percentage of those sales do you think eBay kept? Let's say it was 5% across the board and that would be a very high number, I think. That is 7.5 million of eBay's over 10 billion in gross revenue. I would not call that a threat to eBay's bottom line...in the least. They already forgot he is gone.

The threat isn't necessarily that they take a large chunk of Ebay's business, the threat is that they are successful, which inspires more and more people and groups to think about taking things off Ebay. Ebay already has enough competition, and they aren't wilingly looking for more. They've been moving away from their auction format for quite a few years now. Talk has been they'd like to be more like Amazon for quite a while now with BIN listings seeming to outpace the auctions by 10X - 20X, at least for baseball cards. Will also be interesting to see if PWWC maintains an auction only strategy on their new platform, or also allow consignors to do BINs as well.

Don't forget, if PWCC can sell on their own platform they cut out Ebay fees. They can probably pass some portion of that fee reduction on as savings to their consignors/customers and lure away product from Ebay. And regardless of whether you like them or not, if PWCC can lure away the product, the buyers will follow. That could become a blueprint for other big Ebay sellers in different categories to possibly observe and mimic, a trend Ebay would not care to see start. Pure speculation though, but plausible.

[Lorewalker]

Originally Posted by BobC

The threat isn't necessarily that they take a large chunk of Ebay's business, the threat is that they are successful, which inspires more and more people and groups to think about taking things off Ebay. Ebay already has enough competition, and they aren't wilingly looking for more. They've been moving away from their auction format for quite a few years now. Talk has been they'd like to be more like Amazon for quite a while now with BIN listings seeming to outpace the auctions by 10X - 20X, at least for baseball cards. Will also be interesting to see if PWWC maintains an auction only strategy on their new platform, or also allow consignors to do BINs as well.

Don't forget, if PWCC can sell on their own platform they cut out Ebay fees. They can probably pass some portion of that fee reduction on as savings to their consignors/customers and lure away product from Ebay. And regardless of whether you like them or not, if PWCC can lure away the product, the buyers will follow. That could become a blueprint for other big Ebay sellers in different categories to possibly observe and mimic, a trend Ebay would not care to see start. Pure speculation though, but plausible.

I feel this is oversimplifying what it takes to move to your own platform. I doubt most sellers on eBay would want to take on the responsibility on maintaining what it takes to drive traffic to them while still being able to focus on their primary purpose of being in business. Going to take much more than being inspired. If it didn't then many sellers would have done it long ago. I am not defending eBay as a great venue or well run business but I doubt many sellers would have the ability to sustain their businesses without eBay.

[BobC]

Originally Posted by Lorewalker

I feel this is oversimplifying what it takes to move to your own platform. I doubt most sellers on eBay would want to take on the responsibility on maintaining what it takes to drive traffic to them while still being able to focus on their primary purpose of being in business. Going to take much more than being inspired. If it didn't then many sellers would have done it long ago. I am not defending eBay as a great venue or well run business but I doubt many sellers would have the ability to sustain their businesses without eBay.

Oh, I'm not saying it is or would ever be easy, but if someone the size of PWCC could take a stab at it, who's to say they couldn't in the future branch out to other sales areas/categories as well, and slowly take away more and more business from Ebay. Don't we often see posts about how many people dislike Ebay and the latest thing they've done that no one wants or likes? So what if someone like PWCC sets up something that many see as similar to, but cheaper and better than Ebay? I could see them maybe adding more categories of items to be selling over time, and slowly start to take more and more business from Ebay. It is always a possibility, and one I wouldn't be surprised if Ebay took very seriously.

[Aquarian Sports Cards]

Originally Posted by BobC

Don't forget, if PWCC can sell on their own platform they cut out Ebay fees. They can probably pass some portion of that fee reduction on as savings to their consignors/customers and lure away product from Ebay.

There is no way they are saving money using their own platform over the sweetheart fees they had with ebay. The costs are tremendous.

No design, no maintenance, no hosting and on and on.

[Gorditadogg]

Just to make sure we all understand the scale.

ebay had $5.3 billion of revenue the first half of this year and $1.5 billion of operating income. PWCC's contribution to ebay's revenue was about $0.007 billion and maybe $0.002 billion to income*. A drop in the bucket.

*PWCC reported $150 million of sales for the first half of 2021. ebay was charging PWCC fees of less than 5%, according to ebay, which would about $7 million at the most, and probably a lot less. At a 28% average margin to revenue, ebay's operating income on PWCC business would have been about $2 million (or $0.002 billion).

Bottom line: ebay doesn't give a flying fig about PWCC.

[Johnny630]

Originally Posted by Gorditadogg

Just to make sure we all understand the scale.

ebay had $5.3 billion of revenue the first half of this year and $1.5 billion of operating income. PWCC's contribution to ebay's revenue was about $0.007 billion and maybe $0.002 billion to income*. A drop in the bucket.

*PWCC reported $150 million of sales for the first half of 2021. ebay was charging PWCC fees of less than 5%, according to ebay, which would about $7 million at the most, and probably a lot less. At a 28% average margin to revenue, ebay's operating income on PWCC business would have been about $2 million (or $0.002 billion).

Bottom line: ebay doesn't give a flying fig about PWCC.

Exactly they don’t. PWCC needed Ebay, Ebay didn’t need PWCC.

[BobC]

Originally Posted by Aquarian Sports Cards

There is no way they are saving money using their own platform over the sweetheart fees they had with ebay. The costs are tremendous.

No design, no maintenance, no hosting and on and on.

Don't disagree at all Scott, but then why would PWCC have been working on their own platform already? If they had such a sweet deal with lower Ebay fees in the first place, and costs for setting up and then running their own platform would be so exorbitant, why would they have ever thought of operating outside of Ebay? If it ends up costing them so much more to operate their own platform, one would think they would have to charge more to their consignors to cover their costs then, or end up settling for making less money.

And you know how some people/consignors can be when it comes to even a slight increase in costs, they immediately start looking for a cheaper alternative. I don't know if Probstein has the same sweet deal PWCC did regarding Ebay fees. But if PWCC does end up having to charge more to their consignors going forward to cover the operating costs of their own online platform, couldn't this possibly cause some PWCC longtime consignors to maybe start consigning to Probstein, or others who sell on Ebay, instead?

That's why I was thinking PWCC may have figured out a way to operate their own platform at a more reasonable cost than Ebay. I know it isn't cheap to operate their own platform, but PWCC is not ignorant when it comes to running their business. Of course they weren't expecting the boot from Ebay, so maybe that has screwed up their plans on how they were going to run their new platform more than we'll ever likely know. Will be curious to see how PWCC's new platform will actually operate. Will it be like Ebay auctions or more like an online store with mostly BIN pricing, does anybody really know yet? I guess time will tell.

[steve B]

PWCC would also have more control over their platform, who is on, and what information is available especially closing prices.

All of that would mean they could limit how much people examine the cards and bidding patterns.

I don't think they would be a threat to Ebay even if they were successful, which is doubtful.

Ebay has a fairly large direct competitor in stamps, the former Stampwants now HipStamp/HipPostcard which has been through a name change and been sold at least twice. It's mostly supported by several large dealers who are also on Ebay.

[perezfan]

Despite all of the variables and "theories" being bandied about here, one thing is certain...

Ebay felt that their liability/culpability in harboring a company involved with shill bidding, selling altered cards and undergoing FBI Investigation was far greater than any benefit they derived from the 5% commission.

My belief is that they were tipped off, and chose to wash their hands of PWCC. Cutting off their association would be viewed as a positive, should PWCC eventually drag them into the mud of legal proceedings. Sure, eBay knew of the shill bidding much earlier in the game, so a tip-off or FBI intervention likely stimulated eBay to make its decision.

[Aquarian Sports Cards]

Originally Posted by BobC

Don't disagree at all Scott, but then why would PWCC have been working on their own platform already? If they had such a sweet deal with lower Ebay fees in the first place, and costs for setting up and then running their own platform would be so exorbitant, why would they have ever thought of operating outside of Ebay? If it ends up costing them so much more to operate their own platform, one would think they would have to charge more to their consignors to cover their costs then, or end up settling for making less money.

And you know how some people/consignors can be when it comes to even a slight increase in costs, they immediately start looking for a cheaper alternative. I don't know if Probstein has the same sweet deal PWCC did regarding Ebay fees. But if PWCC does end up having to charge more to their consignors going forward to cover the operating costs of their own online platform, couldn't this possibly cause some PWCC longtime consignors to maybe start consigning to Probstein, or others who sell on Ebay, instead?

That's why I was thinking PWCC may have figured out a way to operate their own platform at a more reasonable cost than Ebay. I know it isn't cheap to operate their own platform, but PWCC is not ignorant when it comes to running their business. Of course they weren't expecting the boot from Ebay, so maybe that has screwed up their plans on how they were going to run their new platform more than we'll ever likely know. Will be curious to see how PWCC's new platform will actually operate. Will it be like Ebay auctions or more like an online store with mostly BIN pricing, does anybody really know yet? I guess time will tell.

Don't underestimate the money to be made in an opaque setting where nobody can access your data without a subpoena. This doesn't make the expenses less, it just makes the upside greater.

[BobC]

Originally Posted by Aquarian Sports Cards

Don't underestimate the money to be made in an opaque setting where nobody can access your data without a subpoena. This doesn't make the expenses less, it just makes the upside greater.

LOL

Point taken!

We're just all speculating at this point. As time goes by and things happen (or not), we may eventually learn more facts and details we're only guessing about for now.