Earn 10% in eBay Bucks on any qualifying item you buy or sell Expires Jun 16, 2017 11:59 PM PDT

HighGradeLegends

Earn 10% in eBay Bucks on any qualifying item you buy or sell.
Expires:

Jun 16, 2017 11:59 PM PDT

By invite only...

FYI to all those out there

addicted2ebay

I don't get why they would go from 2% to 1% then offer all these promos but whatever.

tbonewilly

Maybe they are planning another seller increase in costs , figure get buyers to keep buying stuff with a small discount, sellers add more inventory, then bam, oh, sellers, now it costs$$ to list and oh by the way, we are going to increase fees by % ....Wouldn't surprise me...

thunderdan

@addicted2ebay said:
I don't get why they would go from 2% to 1% then offer all these promos but whatever.

It could be a couple of things regarding eBay bucks (ebb). Sorry for being long-winded.

1) This is 1% change is only 6 months old and like many loyalty programs, you measure it over time and tweak as necessary. In other words, maybe they switch back to 2% with fewer eBay bucks promotions. Or maybe they don't. It probably all comes down to redemption rate and what they're having to accrue as a liability on their balance sheets for the eBay Bucks owed and especially what they are incurring as expenses with actual redemptions.

2) I was wondering the same thing so I did a quick calc making some assumptions (see below). Feel free to poke holes in it because we have imperfect (read: no) information on what the actuals in earned and redeemed ebb actually are, nor do we know the impact on GMV (sale) each quarter by juicing ebb with these nearly weekly ebb promotions (10% ebb, etc). The below shows the breakeven between 1 and 2% eBay bucks in terms of ebb earned.

a) At 11.11% growth rate (i.e. GMV on eBay grows on a quarterly basis by 11.11%) at the 1% ebb level (by pulsing 10 ebb promotions at an average of 8% per quarter). At this growth rate, the ebb earned is the same. 11% is a pretty strong growth rate for ebay with their current size, so I doubt they are growing this fast as they've been getting absolutely destroyed by Amazon, but I'm not a shareholder so somebody who is can correct me if I'm wrong. If the growth rate were less, the earned BB is less under 1% + extra ebb promos than under 2%. This is before even addressing redemptions.

b) The earned ebb isn't the only factor. Redemptions are what cost eBay actual money. Earned are only accrued (not spent).

Basically, there are a few reasons why 1% + extra ebb promotions COULD BE better for ebay such as.

--Earned ebb and redeemed ebb could be lower in 1% program vs 2% program levels. in example below, the growth rate in GMV could very likely be less than the 11% modeled. If it is, than the earned ebb is less under 1% than 2%.

--The redemption rate of base level 1% ebb probably have a lower redemption rate than 2% because the perceived value is so much less (i.e. 50% less). We don't know how many people take advantage of the offers. Many do on the board, but we're outliers compared to regular eBay shoppers. Maybe the reason they give so many is because they can afford to (i.e. not a ton of people earning the multiples and then redeeming them). If this is the case, take advantage while you can.

If either of the above were true, then eBay is seeing lower ebb earned or lower ebb redemption rate (or both) under new formula. Hopefully they are looking more long term at the average customer's LTV (lifetime value) to understand if the change alters a customer's purchasing behavior or profitability over time as this is the more accurate way of assessing the effectiveness of a loyalty program imo.

addicted2ebay

@thunderdan said:

@addicted2ebay said:
I don't get why they would go from 2% to 1% then offer all these promos but whatever.

It could be a couple of things regarding eBay bucks (ebb). Sorry for being long-winded.

1) This is 1% change is only 6 months old and like many loyalty programs, you measure it over time and tweak as necessary. In other words, maybe they switch back to 2% with fewer eBay bucks promotions. Or maybe they don't. It probably all comes down to redemption rate and what they're having to accrue as a liability on their balance sheets for the eBay Bucks owed and especially what they are incurring as expenses with actual redemptions.

2) I was wondering the same thing so I did a quick calc making some assumptions (see below). Feel free to poke holes in it because we have imperfect (read: no) information on what the actuals in earned and redeemed ebb actually are, nor do we know the impact on GMV (sale) each quarter by juicing ebb with these nearly weekly ebb promotions (10% ebb, etc). The below shows the breakeven between 1 and 2% eBay bucks in terms of ebb earned.

a) At 11.11% growth rate (i.e. GMV on eBay grows on a quarterly basis by 11.11%) at the 1% ebb level (by pulsing 10 ebb promotions at an average of 8% per quarter). At this growth rate, the ebb earned is the same. 11% is a pretty strong growth rate for ebay with their current size, so I doubt they are growing this fast as they've been getting absolutely destroyed by Amazon, but I'm not a shareholder so somebody who is can correct me if I'm wrong. If the growth rate were less, the earned BB is less under 1% + extra ebb promos than under 2%. This is before even addressing redemptions.

b) The earned ebb isn't the only factor. Redemptions are what cost eBay actual money. Earned are only accrued (not spent).

Basically, there are a few reasons why 1% + extra ebb promotions COULD BE better for ebay such as.

--Earned ebb and redeemed ebb could be lower in 1% program vs 2% program levels. in example below, the growth rate in GMV could very likely be less than the 11% modeled. If it is, than the earned ebb is less under 1% than 2%.

--The redemption rate of base level 1% ebb probably have a lower redemption rate than 2% because the perceived value is so much less (i.e. 50% less). We don't know how many people take advantage of the offers. Many do on the board, but we're outliers compared to regular eBay shoppers. Maybe the reason they give so many is because they can afford to (i.e. not a ton of people earning the multiples and then redeeming them). If this is the case, take advantage while you can.

If either of the above were true, then eBay is seeing lower ebb earned or lower ebb redemption rate (or both) under new formula. Hopefully they are looking more long term at the average customer's LTV (lifetime value) to understand if the change alters a customer's purchasing behavior or profitability over time as this is the more accurate way of assessing the effectiveness of a loyalty program imo.

That is some food for thought. Very interesting!

HighGradeLegends

well stated thunderdan

downtown

Picked this up using funds from selling bunt digital cards, and earned $3.49 eBay bucks!

divecchia

I just got it also.

Donato

HighGradeLegends

First time in a long time i did not get the offer. Those that did, enjoy!