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EcommerceBytes-NewsFlash, Number 1726 - February 13, 2008 - ISSN 1539-5065    2 of 5

The Minority Report: Sellers Who Favor eBay Changes

By Ina Steiner
EcommerceBytes.com
February 13, 2008




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AuctionBytes surveyed sellers on eBay's five major changes around fees, feedback, Best Match search, seller standards and PayPal Protection and found the majority of sellers felt fee and feedback changes would have the biggest impact on their businesses. A minority of sellers said their fees would go down under the new fee structure (13%), and a minority of sellers said they believed eBay feedback changes were good (5%).

Respondents who said their monthly fees would go down and those who felt feedback changes were good skewed toward higher-volume listers with higher annual GMV compared to the average of all respondents.

The average Sell Through Rate (STR) for those who said their fees would go down under the new fee structure was lower than the average for all respondents. (eBay's new fee structure makes it cheaper to list and charges a higher commission when items sell.) The average STR for those who thought feedback changes were good was the same as the average of all respondents.

For example, 30% of the people who took the survey had a Sell Through Rate higher than 66%, but only 16% of the people who said their fees would go down had a Sell Through Rate higher than 66%.

  Total Respondents Those who said their fees would go down Those who said overall, feedback changes are good
List greater than 75 items/week 32% 46% 45%
Greater than $100,000 annual GMV 11% 16% 17%
Greater than 66% STR 30% 16% 29%

Will Beneficiaries of New Fee Structure Change their Businesses?
13% of respondents said that under the new eBay.com fee structure, their monthly eBay fees would go down. Of those, 30% said they would list more on eBay, and 22% said they would make no changes.

Others had answers that might seem counter-intuitive if one did not consider the fact that eBay is making significant changes to the site in addition to fee changes: 26% of those whose fees will go down said they would list fewer items on eBay; 7% said the would stop selling on eBay; 37% said they would list more on other sites; and 19% said they would sell more through offline channels. (Answers were not mutually exclusive.)

Lower Fees, Less Pessimism
We noticed a correlation between fees and attitudes about feedback. Of the respondents who said their fees would go down under the new fee structure, fewer of them thought the changes to feedback were bad. And of those who said their fees would go up, more of them thought the feedback changes were bad.

Overall, what do you think of these changes to the feedback policy? # Respondents Feedback Changes Are Good Feedback Changes Are Bad
Those who said their fees would go down 213 15.1% 74.1%
Those who said their fees would go up 1123 2.3% 93.7%
Total 1640 4.7% 89.7%

Interestingly, a greater number of those who said their fees would go down felt Best Match search visibility changes would have the most impact on their business (26% versus 16%). However, of those, 59% felt Best Match would have a negative impact, while 41% felt Best Match would have a positive impact on their business.

In Their Own Words
Here's a comment from one of the only 76 sellers who said that, overall, feedback changes were good. He/she sells in the collectibles category with an annual GMV of between $10,001 - $25,000 and a high Sell Through Rate:

I was upset at first, but ran the numbers and found that since I won't have to pay for gallery (which has been a necessity in my category), I'll be saving about $200 a month. The feedback change won't affect me much because I currently leave it immediately after the buyer pays, so there's never a threat of retaliation from me anyway. I'm SICK of seeing sellers leaving bad feedback because buyers were honest in leaving their own feedback! I hope this works and buyers feel more secure.

Here are more comments from the minority viewpoint that felt, overall, feedback changes were good:

eBay should be more proactive in protecting sellers from bad buyers. Listing fees for NPBs should be refunded, and no feedback should be allowed for the buyer until the item is paid for.

As much as I'm not thrilled that my feedback record will inevitably be impacted by the upcoming change, if it makes eBay a more appealing place to shop and increases the number of bidders then I'm willing to keep an open mind and see how it goes. On the issue of fees, I've decided that the store fee increase was too significant to justify keeping a store open, so I will be closing my store as of 2/19/08. Instead, I plan to take advantage of $0.15 listing fees to list $0.99 starting bid auctions, and will be more selective with what I list.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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