ebay-revenue

eBay Revenue

In 2022, eBay generated $9.79 billion, compared to $10.42 billion in 2021. A 6% decrease year-over-year.

Key Statistics

  • The number of buyers on eBay increased from 179 million in 2018 to 185 million in 2020 before declining to 134 million in 2022.
  • Revenue increased from $8.6 billion in 2015 to $10.74 billion in 2018, then declined to $7.43 billion in 2019 before increasing again to $10.42 billion in 2021. Revenue declined slightly to $9.79 billion in 2022.
  • Net income or losses improved from a net loss of $1 billion in 2017 to a net income of $2.53 billion in 2018, then decreased to $1.78 billion in 2019 before increasing significantly to $13.6 billion in 2021. However, the net income turned to a net loss of $1.27 billion in 2022.
  • The trend of the number of buyers shows steady growth until 2020, but a decline in 2021 and 2022, which may be a concern for the company’s future growth.
  • The trend of revenue shows a consistent increase until 2018, followed by a decline in 2019, and a slow but steady recovery in 2020 and 2021, with a slight decline in 2022.
  • The trend of net income or losses shows significant improvement in 2018 and 2019, followed by a massive increase in 2020 and 2021, but turned into a significant net loss in 2022, indicating some volatility in the company’s profitability.
  • The take rate increased from 8.97% in 2018 to 13.25% in 2022.
  • The take rate increased steadily from 2018 to 2020, with a CAGR of approximately 2.5%.
  • The take rate then increased significantly from 2020 to 2021, with a year-over-year growth rate of approximately 18%.
  • The take rate continued to increase in 2022, indicating that eBay is earning a higher percentage of revenue from transactions on its platform.
  • The increasing take rate may suggest that eBay is implementing more successful monetization strategies or that the company is charging higher fees to sellers.

Related Visual Stories

eBay Business Model

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eBay’s core business is a platform business model that makes money from transaction fees through its marketplaces. In short, eBay primarily makes money by charging fees on successfully closed transactions. For instance, in 2021, on an $87 billion worth of gross merchandise value sold on eBay, the company generated $9.77 billion in transaction revenues at an 11.19% take rate (fee).

eBay Revenue

ebay-revenue
In 2022, eBay generated $9.79 billion, compared to $10.42 billion in 2021. A 6% decrease year-over-year.

Is eBay Profitable?

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In 2022, eBay reported a net loss of $1.27 billion, compared to a net profit of $13.6 billion in 2021.

eBay Revenue Breakdown

ebay-revenue-breakdown
In 2022, eBay generated $9.77 billion in transaction revenue and $650 million in marketing services revenue.

How Much Does eBay Take?

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In 2021, eBay’s take rate was 11.19%. It means that eBay takes a cut of over 11% for each transaction happening through the platform. For instance, in 2021, on a total of over $87 billion in gross merchandise value on top of the platform, the company generated almost ten billion in transaction revenues.

eBay Bidding System

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eBay bidding is a way for buyers to bid on a product whose sale price is decided by auction. The bidding process itself is automated, with eBay acting on the buyer’s behalf.

eBay Organizational Structure

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eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

Etsy vs. Ebay

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eBay vs. Amazon

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In 2021, Amazon generated almost $470 billion in revenue, vs. eBay’s over $10.4 billion. In comparison, looking at revenues, Amazon was 45x times larger than eBay.

Amazon Business Model

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Amazon has a diversified business model. In 2022 Amazon posted over $514 billion in revenues, while it posted a net loss of over $2.7 billion. Online stores contributed almost 43% of Amazon revenues. The remaining was generated by Third-party Seller Services, and Physical Stores. While  Amazon AWS, Subscription Services, and Advertising revenues play a significant role within Amazon as fast-growing segments.

Amazon Revenue By Country

Amazon Revenue By Country
In 2022, most of Amazon’s revenue came from the US, with over $356 billion in revenue, followed by Germany with $33.6 billion, the UK with $30 billion, Japan with $24.4 billion, and the rest of the world generated almost $70 billion in net sales.

Amazon Cost Structure

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Both the North American and International segment of Amazon are running at negative margins. Indeed, in 2022, for the North American segments, of almost $316 billion in revenue, Amazon spent almost $319 billion in operating costs to run it, thus it generated $2 billion in operating losses in 2022. For its International segment, of $118 billion in revenue, Amazon spent almost $126 billion to operate it. Thus, it reported a $7.7 billion operating loss. While for AWS, with $80 billion in revenue, Amazon spent $57 billion to operate it, thus generating almost $23 billion in operating income. The high operating costs are primarily due to the high cost of running Amazon’s inventory and fulfillment infrastructure behind its e-commerce operations. Indeed, Amazon is as much as a physical player as a digital one.

Is Amazon Profitable Without AWS?

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Amazon was not profitable once AWS was removed in 2022. In fact, Amazon, without AWS generated $10.6 billion in operating losses. While Amazon, without AWS, generated $12.2. billion operating income.

Amazon Profit Breakdown

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Amazon is subdivided into three operating profit segments: North America, International, and AWS. Amazon AWS is the most profitable segment, with almost $23 billion in operating profit in 2022. While Both the North American and International segments run at negative operating losses, with $2 billion and $7.74 billion in operating losses, respectively, in 2022.

Amazon Revenue Breakdown

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Amazon Revenue Per Employee

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Amazon Mission Statement

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Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Customer Obsession

customer-obsession
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!

Amazon Revenues

amazon-revenue-model
Amazon has a business model with many moving parts. The e-commerce platform generated $220 billion in 2022, followed by third-party stores services which generated over $117 billion; Amazon AWS, which generated over $80 billion; Amazon advertising which generated almost $38 billion and Amazon Prime, which generated over $35 billion, and physical stores which generated almost $19 billion.

Amazon Cash Conversion

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Working Backwards

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The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

Amazon Flywheel

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The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

Jeff Bezos Day One

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In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

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