The remarkable revival of eBay

The internet’s flea market is back—and GameStop wants to buy it

The first thing sold on eBay was a broken laser pointer. In 1995 Pierre Omidyar, the founder, listed the item to test the idea of an online auction. A bidding war ensued and the pointer was sold for the princely sum of $14.83. From that humble start eBay grew into a vast bazaar. By 2005 it was worth almost $80bn, about four times the value of rival Amazon. That shine slowly faded as its customers left for bigger rivals and niche marketplaces. But over the past few years eBay has mounted a surprising comeback.

Consider its results for the first quarter. Sales grew by 17% year on year. The number of buyers, which had been falling, has stabilised at around 135m a year. Investors are pleased. EBay’s share price has jumped by around 150% since the start of 2024. So buzzy has it become that GameStop, a video-game seller beloved of retail investors that has lately been expanding into collectibles, has offered to buy it for $56bn.

EBay’s comeback started with a new boss. Six years ago Jamie Iannone, a former eBay manager who went on to work at Walmart, returned to take charge. Market share was being lost to rivals including Amazon and Walmart, which offered countless products and used their logistics networks to deliver them quickly, along with niche second-hand markets, such as the RealReal, a fashion-resale platform, and StockX, a marketplace for trainers.

Mr Iannone’s solution was to focus on what he calls the “heritage of eBay”, such as used, refurbished and out-of-season goods. That meant prioritising a small number of “focus categories”, including collectibles, fashion and car parts, which account for a third of the total value of goods sold on the platform. In these areas management worked to improve customer trust. Learning from rivals such as the RealReal, it rolled out ways of authenticating valuable goods. A set of Pokémon cards or a Gucci handbag can first be shipped to one of eBay’s experts to verify that it is real, for example. Some refurbished goods now come with warranties.

EBay has boosted its focus categories with acquisitions. It bought Goldin, a marketplace for collectibles, in 2024. The next year it snapped up Caramel, a car-selling platform. In February it acquired Depop, a second-hand marketplace, from Etsy.

It has also made buying and selling easier. Sellers rave about eBay’s international shipping service, which allows them to send foreign-bound packages to the marketplace, which takes care of the rest, including customs forms and tariffs. (The buyer typically picks up the tab.) Artificial-intelligence tools help to create listings. Expensive cards can now be stored in an eBay-run, climate-controlled vault in Delaware, so they can be exchanged without buyers taking physical delivery.

To help fund all this, Mr Iannone has been trimming costs across the business. In February eBay said that it would lay off 800 staff, equivalent to 6% of its workforce.

The turnaround has benefited from factors outside eBay’s control. A boom in the trading-card market, thanks in part to pandemic-era stimulus cheques, has endured. Demand for second-hand clothing is roaring, too, especially among Gen Z. Geopolitical uncertainty has sent the prices of gold and silver rocketing, helping sales of bullion and collectible coins.

Even so, eBay’s revival is impressive. Michael Morton of MoffettNathanson, a research firm, notes that online marketplaces are particularly hard to turn around: “When you start losing buyers, vendors look for other places to sell.”

Ryan Cohen, GameStop’s boss, has had a harder time reversing its fortunes of his company. Its revenue fell by 14% year on year in its most recent quarter, as e-commerce has continued to erode its business. Mr Cohen may hope that bringing the firms together would give GameStop a speedy way to expand its online presence while providing eBay with a retail footprint to lure in passers-by and act as a distribution network. But such a deal would be tricky to pull off: the proposed offer is nearly five times the current market value of GameStop. If Mr Cohen wants a bargain, he will have to look elsewhere. ■

Editor’s note: This article has been updated.