GameStop CEO Ryan Cohen's $56B Plan to Take Over eBay

Ryan Cohen: The real competition was always Amazon and they were world class when it comes to supply chain. So negotiating very fiercely with suppliers to get the best product costs. And that meant getting to scale and going from buying pallets of dog food to truckloads of dog food and moving from distribution to direct and buying generally, the more you buy, the lower the prices are going to be. Operating efficiently in the warehouses. And so labor optimization, warehouse management optimization, getting competitive prices with shipping carriers. It was a game of pennies and we were, the goal was to grow quickly and establish market leadership. And the difference between failure and success was, pennies in the red is failure and pennies in the black is success.

Ryan Cohen: I look for will over skill and I had a woman that was running customer service, as an example, and she came from, she was working in like an old people's home. And she applied for the job many times and we just, we didn't think she was qualified. And we looked over her resume and she kept on applying. She was relentless. So on paper, she didn't necessarily have the right experience, but she had drive. She was motivated. She wanted to work. And she ended up being incredible. So I mean, it was in general, it was finding people that are diehards that are just willing to put everything in, go all in, no pun intended. and basically be as psychotic as me. And that was the team that we put together. It was just a bunch of fellow psychopaths. And psychopaths attract psychopaths and the engine is running at that point.

Ryan Cohen: I look at basically the marketplace model where they had first mover advantage. So their ability to have first mover advantage and really be the like de facto marketplace online, including against Amazon, was significant. So that was really helpful. I wouldn't say that if you look in general at the growth in e-commerce and you look at Amazon as an example that basically took the marketplace model, but also took taking possession of first party inventory along with growing their marketplace and like they ultimately scaled it and they essentially did what Walmart was doing, but they did it online and at scale. I mean, obviously you can't compare the two. But their focus on building a marketplace gave them a moat and staying power. But I wouldn't say that their execution was great. In the early days, it was great when it was founder operated. But since then, if you look at how much e-commerce has grown and how much market share they've given up to the likes of basically everyone, new competitors in the space, that are very category-focused. Live shopping competitors picked off significant share from them. Shopify, social commerce, Amazon. eBay's been able to maintain a revenue base and generate earnings. but they haven't grown along with the rest of e-commerce. So, and if you look at how they've done most recently, I mean, they've basically, the business has stagnated up until the last few quarters and their operating expenses are up significantly. So, it's not to say, you know, they've, they, are the de facto marketplace online, especially in certain categories, but that business should be significantly larger.

Ryan Cohen: I would not be interested in taking in first-hand inventory. I like the marketplace model and the categories where eBay is doing well are categories where GameStop is doing especially well also. But going head-to-head against Amazon is, it's not the most attractive business. I like focus. So them focusing on core eBay makes sense. I mean, my strategy at Chewy wasn't creating all these other sub-brands for different geographies. It was always focusing on Chewy. So the focus is helpful.