EcommerceBytes-Update, Number 136 - February 06, 2005 - ISSN 1528-6703     7 of 7

AuctionBytes Soundoff: Letters from Readers

Email This Story to a Friend

In every issue, readers soundoff about issues important to them. From feedback to payment services, from increased fees to posting policies, AuctionBytes Soundoff gives you a chance to air your views.

Re Last week's editorial that discussed eBay's announced fee increases http://auctionbytes.com/cab/abu/y205/m01/abu0135/s01

Hello Ina,
You hit the nail on the head with your newsletter comments regarding the new fees from eBay. We primarily sell rare books and art on eBay; we don't have an eBay store so the new fees barely impact us. A .10 increase in gallery photos and increase to .50 for BIN is not really significant for us.

But the dramatic fee increase for store final value fees, my belief that we will eventually face a similar increase for auction final value fees and our concerns regarding increasing buyer fraud (bidders with no intention of ever buying anything), selling fraud (fraudulent second chance offers), lack of service and shifting focus by eBay management has made it necessary for us to undertake a major strategic and operational change. As a result, we did not list this week and are launching a major overhaul of our web site, with an art gallery and book store.

We will also be changing our advertising strategy as well. In the past we marketed and directed traffic only to our auctions on eBay. We will now try to move traffic off of eBay and on to our web site. Our one to two year goal is to have no more than 20% to 25% of our sales through eBay (currently about 80%).

Is that achievable? Hard to say, and it will certainly be a challenge, but we think it is a worthy goal and one that we will spend considerable efforts and capital striving to achieve. In the long run this will make us a more viable and valuable company.

Related to our change in strategy, it appears that the focus of the upcoming PESA conference in Atlanta will concentrate on selling through channels other than eBay. PESA members, as I am sure you are aware, count for millions of dollars of sales on eBay every year.

I would have preferred to keep my life simple and continue to sell primarily on eBay, but the company actions and policies regarding fraud, price increases, lack of service for sellers and shifting focus outside of the US market, forces us and many others to think of and implement different ways to do business on and off eBay. I believe that eBay has opened a can of worms that they will never be able to close, especially here in the US.

Regarding your survey of eBay drop off stores, I really question the viability of this venture backed business model. As an example it has come to our attention through a client of ours that a fairly large drop off store is closing their doors. Their eBay name already shows the dreaded "no longer a registered user" tag. I would bet we see many other closings of these types of business during 2005.

Love the newsletter; keep up the good and important work.
Best regards,
Michael

********

Ina,
As more anecdotal info for you, we closed one of our two eBay stores due to their fee hikes. When we went to fill in the survey as to why, we got a message from their market research outsource saying that the "survey had enough recipients, thank you very much".... utterly bizarre.
Best,
Phil

********

Exceptionally well written insight into eBay's newest fee increases!
Thanks...

********

Ina,
Is anyone planning on giving ebay some competition?
Tim

********

Ina,
I have to tell ya, making adjustments to my eBay expense calculator was not easy for this recent fee increase. eBay had one simple structure for Final Value Fee (FVF), but now there are two different ones for auctions and Store items. That is causing a lot of anger, headaches, and confusion. eBay would have been better off keeping the same FVF structure and raising only the monthly store price.
Sun

********

Regarding Ebay's increasing fee structure. It was patently obvious to anyone who knows the working of the stock market and public companies, that as soon as Ebay went public the slippery slope of rising costs would happen. Why the surprise?

Non Ebay management came in without the ebay culture, with the sole purpose of keeping the investors returns high. That is what drives all successful public companies. As long as they can squeeze the seller they will continue to do so with the sole aim of paying big dividends and keeping the stock price high. Also to pay their own management outrageously high bonuses. Often these leeches ruin a company and then move on to the next sucker company to bleed.

The criminality of it is these new guys have never built a company, and probably never could, but are given a ready made tool to treat it as a sop cow to continually milk.

That's free enterprise and sometimes it leaves a bad smell.
Bryan

********

Good morning Ms. Ina -
Well, this fee debate is certainly interesting to watch!

I do take issue with something the Marketworks man, Mr. Lundy said, however. He was not accurate when mentioning the FVF:

"Paul Lundy, head of marketing for Marketworks, said, "I think anytime eBay raises fees it is a concern to the seller community and they react accordingly. Even though eBay did not touch the core fee structure for listings (with the exception of the B&I category) and FVF,"

Um, not sure where he was reading from, because the notice I got surely DID touch the FVF and core fee structure! I made a makeshift spreadsheet to get a realistic view of what they did.

I have posted a notice to our customers in my own storefront about the possibility of closing the store and moving off site. Will we leave eBay entirely? No. Unlike the eBay management, I don't intend to leave the one who brought the best exposure. However, we are not a B&M store. In fact, we opened a store this time because it was an effort to raise a little revenue to pay for our internet costs and for our supplies. I've not been able to work outside the home for about a year now, so this seemed like the perfect venue to allow me to help contribte to our income, or at least cover my own expenses! (Shhh - my husband got back to work a couple months ago, so now I seem to shop as much as I sell!) Other than our handmade items, we don't offer high-ticket products. Therefore, the fee and store "rental" increases will pretty much suck up any profit margin we had.

I think the most irritating part of the fee increase on the stores, is that this was NOT across the board. Only the "little guy" - the basic store subscription folks, got hit with this large increase. The Big Dogs (as I lovingly call them) did not get an increase in store subscription fees. I think it should have been a much lower percentage, and spread out evenly among all the store levels. The larger ones can afford a smaller increase much more than the small stores can foot a big increase. It showed the sellers that once again, eBay was not really listening to their concerns, and was not truly interested in what their needs were. On the boards, some have said they felt eBay was trying to "weed out" the smaller sellers entirely. While I don't know how accurate that would be, it does seem to look as though they truly are not too interested in our feedback to them! Too bad we cannot leave feedback for eBay! Ha!

We have already opened a direct URL storefront. I've been looking and considering one for quite some time now, but this price increase was the incentive I needed to get out there and actually DO it. I just started it up, so it will be a big process to move inventory and images over. However, the move will be much more cost-effective for us. We had to pay a year in advance, but in doing so, got a great rate on a site with an integrated shopping cart. Stand-alone shopping cart programs are quite costly. In addition, once everything is moved, I can cancel my monthly photo host, which is an additional savings. I don't think eBay realized many of us could "do the math". For our particular store, we ran between 150-200 listings at any given time (and I had a lot more to list, just never got them listed yet. I would have easily run 300 items, at 3 cents per listing per month until sold). That was, say $6.00. The store is going to $15.95. I pay $6.99 for a great photo host for my auction pictures rather than using eBay's photo services. That comes to around $28/month without any FVFs added in. By contrast, my own store with a full shopping cart and complete photo host room, has cost us $7.50/month. I'd say that is a very appreciable difference!

I'll still run some auctions on eBay, and still shop there as well. I have my favorite sellers too!

But, unless they make a drastic change to the fee structure, we will be among the many smaller volume sellers who are better off finding other pastures, and just using eBay as a small part of marketing. Sure, I am aware that people have to FIND our store, but loyal customers will come over, and new ones will come by word of mouth, search engines, and linkage. I'll miss some of the features, but won't miss the frustration and paying so much each month.

I wonder if the photo hosts have thought about the impact that this will have on their services? If sellers close their stores, they might not need the photo hosting any more. Most sellers that I knew used a paid service for reliable hosting on store items. Also, most of the free hosts did auto-deletes after a certain time frame, which was not good for store items which often could run for months at a time. Hmm..... there is a definite trickle-down to all the other companies who provide services directly related to the auction sites.

Thanks again for being on top of all the auction news!
Beth

********

In my opinion, eBay is leveraging the higher fees, and using the money to pump up their international auction venues which don't generate anywhere close to eBay US in fees. I think eBay is missing the boat once again - it's the US sellers making them the money and they're not giving any of it back to us as incentives i.e. where's an increase in eBay ads that they promised a year ago? A few sporadic ads here and there just isn't enough.

I truly believe in and support the Feb. 18th seller no listing day to hit ebay in their fat-cat wallets! In fact...I'm not listing the 18th and 19th to maybe get the point across to them. Will it help? Probably not, but I'll certainly feel as if I am supporting the cause.

On the flip side, I happily wave bye-bye to my competition with less feedback and relish the thought of less competition in my niche sales avenue on eBay. I'm not leaving eBay, just being a little smarter in my listings to get the full entire value. I take full advantage of eBay keyword program and I can tell you, very few sellers are taking advantage of this virtually untapped resource on eBay. Sure, it costs money, what advertising doesn't?

If you're going to run a business, expect rising costs, pass them along to the consumers, quit griping and consider it a cost of doing business. The next thing we'll be charged for are 7 day listings - as is evidenced by the words - no surcharge that pop up on 7 day listings rate info.

Just my humble opinion.
Mindy

********

Hi Ina,
FYI: The same day I read about the outrageous fee increases, not to mention the chunk PayPal takes, I stopped selling on eBay and won't be back, despite having 2 seller accounts and over 800+ feedbacks. I'm now selling on an antiques website.

********

Re: previous request for reader tips and tricks on eBay sales data http://auctionbytes.com/cab/abu/y204/m12/abu0132/s06#s05

I have been selling on Ebay for a few years now. I have noticed some trends, tips and tricks that I have learned by accident and the hard way.

a) Always end auctions about 5pm on Thursday's and Friday's. People are getting ready to head out of the office around that time and they use a little company time to check their favorite item on Ebay before they head home.

b) Friday and Thursday auction ending dates and times are also good for the reason that the buyers are usually paid those days, people have money on payday and are more ready to spend the hard earned dollars.

c) Don't end auctions on Saturday Days or Sunday Days, people are out doing things and are not at home during the day on weekends. Ebay browsing time is done during the week and late Sunday night.

d) If you want most of your packages to ship to the eastcoast end auctions at 5pm eastern standard time. I could not believe one month that all my packages were heading to California Oregon and Washington State, then I checked my ending times and those ending time were 5pm Pacific Standard time.

e) Check the forecast. Rainy weather, snowy days equate to great sales. Bright Sunny days forget it. Weather matters.

f) Summer Selling forget it, the May 1st through August 30th are bad months to sell on Ebay. But a great time to buy and get deals. Can't give the stuff away during the summer. A rare China vase could not sell for a dollar for me through the summer. Sold the same vase in the winter made $247 on it first time out listing. Could not sell it for a dollar in the summer.

h) Start all bids at 1 cent. Getting two or four bidders creates competition and excitement. Attracts other bidders because they are curious about what all the hub bub is.

g) The $19.95 Featured Plus is worth every penny, put ten items on, use Featured Plus on one ad, this gets you recognized and traffic gets heavier on your other listing.

Hope this helps.
Thanks,
Ted Van Pelt
Ebay Seller: Bantam10

********

It may not seem like a big deal that eBay made a billing "error" with their pro-rated stores, but when you think of the millions of dollars they will get a month early and the interest they can draw on it, it becomes significant. I don't think it was a mistake.

It has come to my attention that eBay is not properly crediting insertion fees when something sells the second time around. This is especially a problem for those sellers who use SpareDollar. I have been very carefully tracking my auctions for 4 months and have noticed a significant problem.

More than 2/3 of my auctions were not credited properly when I relisted using SpareDollar's relist feature. When I emailed eBay's customer support, I was initially denied a credit and given all sorts of run-arounds. I was told they are NEVER wrong and that there has never been a problem reported, so it must just be me that is having a problem - thereby implying the fault was with my bookkeeping. After several days, and mentioning that I now understood why they had been sued over their customer support, or lack thereof, I was given a "one-time courtesy credit."

On the SpareDollar community board, one member claims that even when using eBay's site to relist, the error rate is 30%. I do not have any figures to back that up, but I still think this is a very large problem and a subject that your readers would have a great deal of interest in. Thank you,
Lisa

********

Re Newsflash article, "eBay Drop-off Stores Threaten Newspaper Classifieds" http://auctionbytes.com/cab/abn/y05/m01/i25/s03

Good Morning, Ina,
Just read the piece about the Oregonian - how about a bit closer to home - We tried an online auction last fall (and may try again in the spring) and were refused a classified ad in the WantAd rag - go figure.
Lee

********

Re: Malicious bidding activity and BIN Bandit fraud http://auctionbytes.com/cab/abn/y04/m11/i23/s01

Hi Ina,
I am shocked when I see this is still happening: http://www.ebaymotorssucks.com/waitebe.htm

********

Dear Ina:
I just want to pass on to you that I love your email, and all of the facts and coverage that you offer us out here in never-never land! Thank you for your time and patience in creating this wonderful site. Sincerely,
Nancy

********

David:
I enjoyed your roundup article of reactions to eBay's latest price increase. Funny the guy from Marketworks would have much to say about the increase since they just jacked up their prices from $14.95 a month to $29.95 a month for the same service. eBay is not the only one concerned about the bottom line.
Thanks!
Craig

********

Hi,
I just wanted to thank you for a job well done on your ebay dropoff store survey. I will be opening a store soon and that information is just what I needed. I enjoy your site very much, keep up the great work! I sure compliments are few and far between complaints in running an online publication so I just wanted to let you know someone out there is very thankful for your service!
Take care,
Andy


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.


You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.