eBay Sellers Squeezed with Auctiva's Move from Free to Fee
By Ina Steiner
Auctiva, one of the most successful eBay service providers, will begin charging fees to sellers in July, four years after it had gone to a free model. The move will affect the profit margins of eBay sellers who currently don't pay for Auctiva's listing tools. In a letter to customers, Auctiva CEO Jeff Schlicht wrote, "We did not come to this decision lightly. This adjustment was difficult for us to imagine after four years of being a completely free service. We strive to provide you with the best service for your hard-earned dollars. The e-Commerce landscape is constantly evolving, and it has always been our promise to you to provide a full e-Commerce solution that will meet your needs today, tomorrow and in the future. As a result, we will have to begin charging for some of our services. " One factor that likely played a role in his decision was eBay's changes to its affiliate program.
Auctiva calls itself "eBay's largest third-party Certified Solutions provider," and says about twenty percent of the listings on eBay utilize an Auctiva feature. It's estimated over 1 million people use Auctiva tools, which include free eBay listing tools, image-hosting, templates, counters, and Auctiva Secure Checkout, which is seamlessly integrated with eBay.
It's a big question as to whether sellers, many of whom have said eBay's policy changes have already squeezed their profit margins, would pony up the money for previously free features. Schlicht said he is counting that they will, and guesses about 70 percent of Auctiva customers will stick with his company's tools.
Auctiva is instituting a number of fee options for sellers, from pay-as-you-go plans, to monthly subscription fees with or without commissions. The company will recommend plans to sellers based on their last 3 months of activity. The Scrolling Gallery will remain free, and Sellathon will not be affected.
When Auctiva moved to the free model in June 2005, it explained that it was able to offer free services by partnering with third-party companies who provided complementary services to shoppers who bought from its seller base. It also obtained shipping insurance at a discount that sellers could offer to buyers in exchange for a share of the revenue. Auctiva also earns revenue through its participation in eBay's Affiliate program, which has undergone changes in the last few years as eBay moved the program in-house.
Given that the free model worked for Auctiva for four years, what has changed? When asked if eBay had changed its affiliate program, Schlicht replied, "We don't comment on speculation."
However, when we asked eBay whether there were any changes to its eBay Partner Network affiliate program (ePN) that might account for Auctiva's shift to a paid model, the company confirmed it was making changes to ensure it worked like traditional affiliate programs - that is, that affiliates drive incremental traffic from people who aren't already engaged on eBay.
eBay wants to make a clear distinction between the seller tool model and the affiliate program, it told AuctionBytes. However, eBay said seller tools providers are welcome to use traditional affiliate marketing methods to generate revenue, and then use that revenue to fund their seller tools.
eBay said seller tools providers such as Auctiva, Vendio and several other smaller vendors are still welcome to use ePN through programs such as Dealio and KickItBack, as long as they use the traditional affiliate approach. eBay spokesperson Pluhowski said eBay continues to invest in the eBay Partner Network. "The program drives strong traffic from across the web to eBay that results in incremental buying activity on the site. Affiliates who drive this incremental buying activity will profit from eBay Partner Network, and sellers will benefit from our commitment to and continuing investment in the affiliate marketing channel." (See related story.)
In a letter going out to customers on Thursday, Auctiva said, "We want to make this transition as easy as possible for you. We will begin implementing the necessary changes on our site to accommodate our new pricing structure during the first week of June. As a valued customer, you'll have 30 days to evaluate and select a pricing plan, and we�ll even help identify your best plan choice."
Auctiva is offering a "Free Marketing Tools" plan that includes the Scrolling Gallery, 1 MB of image hosting, Sellathon counters and auto-marketing emails.
The Professional Seller plan will cost $34.95/month plus 12 cents/listing, with zero transaction fees. It includes a free Auctiva Commerce store, and fees are capped at $250/month. A High Volume Seller plan costs $24.95/month with zero listing fees and a 1.75% transaction fee - Auctiva said this is good for sellers with high listing volume and low average sales price.
The Part Time Seller plan costs $9.95/month plus 6 cents/listing and a 1 percent transaction fee. It includes an Auctiva Commerce store for $4.98/month.
The "No Monthly Fee" plan for casual eBay sellers costs 12 cents/listing and a 1.25 percent transaction fee.
Auctiva's Image Hosting plan will be free for the first 1 megabyte of storage, and $1.95/month for between 1 - 5 megabytes of storage up to $34.95/month for over 250 megabytes of storage. There's also a Big Ticket Seller plan. Auctiva said templates come free with all plans, but cost $4.95 for people who do not list with Auctiva and do not want to select any of its pricing plans.
See Auctiva's website for up-to-date details on its various pricing plans.
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 email@example.com.
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