continuing with my eBay blitz...... once again, consider PNLK in relation to this scenario--- for a quick read, scroll down to the ***
>>>On another note, I just reviewed the prospectus for the first time, with the intent to compare with OnSale, as a business. An interesting factor is that eBay posts their "Gross Sales" approx $243,000,000, as
actually just an informational line listing, because this doesn't represent revenue stream actually running through the company. The fees and commissions are the source of the $18 mil gross revenues (I am going by memory without this in front of me).
The importance of this is that eBay doesn't have responsibility for inventory (buying and selling) meaning working on a margin from cost of goods. eBay has no "cost of goods". The members who are selling have the'cost of goods"
OnSale will post approx. $250,000,000 in gross sales this year, but will not make a profit, even though they have that large revenue stream. The actual revenues they can use for operations will probably be 20-25mil, very close to eBay's actual revenue.
****Bottom-line to this convoluted comparison, is that eBay appears to have actually succeeded in taking advantage of the real value of internet commerce, operating without expensive real property and leases, and little or no inventory. This makes the profitability potential fantastic. <<<< |
