What do eBay Listings Mean Anyway?

All EBAY research analysts report listings as the metric with which to follow the health of EBAY’s marketplaces business week to week. They do this simply because listings are the only public piece of information that can be continuously monitored simply by looking up figures on the EBAY website. However, are listings really the key metric? The answer is obviously no.

The key metric of EBAY’s health is GMV (Gross Merchandise Volume) which captures the value of all goods and services that trade hands on EBAY. GMV drives the bulk of EBAY Marketplace and PayPal fees. GMV is a function of consummated listings and their average selling price. Consummated listings are complicated to calculate. They depend of the absolute number of listings (how many items are on the shelf), the trade velocity (how long items are on the shelf), and the average conversion rate (how likely an item is to sell).

Therefore, the absolute listings data we get every week is only part of the story. There could be a scenario where consummated listings are actually growing while the absolute number of items on the shelf remains constant. This would occur is either the conversion rate or the trade velocity were to increase.