It seemed to be a match made in heaven. The online market eBay and the online payments giant had previously been completely inseparable. Despite pressure to split from both internal and external sources, eBay and PayPal had remained resolutely as one ever since eBay purchased PayPal back in 2002 for a cool $1.5 billion (about £963 million).
That is all to change, however, as eBay announced in late September 2014 that eBay and PayPal will be splitting into two separate companies. The split looks set to be completed in mid to late 2015. But what will it mean for those who sell online via eBay, or who accept PayPal payments on other e-commerce sites such as Etsy?
Firstly, do not worry: this news does not mean that people will now be unable to pay for items on eBay using PayPal. You probably won’t notice the difference in terms of the look and layout of the site. However, the split into two companies will increase conversion rates on eBay and will make both companies much more successful. As an online seller, this can only spell good news.
Splitting enables both companies to play to their strengths, and to become more profitable. PayPal’s profits were growing two times as quickly as eBay’s in 2014, and this made it impractical to continue running the two companies as one. The new head of PayPal is Dan Schulman, who was previously at the helm of American Express.
When shareholders and other interested parties got wind of the split, there was an almost instantaneous positive effect; eBay’s shares rose by 7.5%!
As eBay and PayPal grow ever stronger, now is definitely the time for online sellers to make the most of the favourable environment. If you were thinking about creating an eBay or Etsy page for your store or your products, for instance, make sure that 2015 is the year that you do so.
In this atmosphere, it is crucial to have a high quality parcel delivery solution in place. You are likely to find yourself selling more and more items as the new year progresses.