On January 31, 2018, eBay announced its plans to take over payments and explained: “Most sellers can expect their costs of payments processing to be reduced after they transition to eBay’s intermediated payments model, and benefit from a simplified pricing structure and more predictable access to their funds.”
As an eBay moderator explained, “If two items are purchased from you for a single listing, one payment listing fee is charged of $0.25. If two items are purchased from you from different listings, two payment listing fees are charged of $0.25.” (And of course, eBay charges a variable fee as well.)
Other payment processors have a flat-rate transaction fee – for example, PayPal charges a 30-cent transaction fee plus a variable fee. eBay’s move to a “per listing” fee instead of a transaction fee is the opposite of the more simplified pricing structure it had promised.
Experience tells us eBay will run into some technical “challenges” when implementing managed payments. What would make the bitter pill easier to swallow is the savings eBay had promised to sellers. Buckle up, it may be a bumpy ride.
Etsy, which already took over payments intermediation on its marketplace, is working on a strategy to improve search by implementing a “cushion-to-couch” search strategy.
Should Etsy give more weight to lower-priced goods (the “cushion”), since that would boost conversion rates? Or should it give more weight to higher-priced goods (the “couch”), since that would boost gross sales? This AuctionBytes Blog post explains the strategy described by Etsy CEO Josh Silverman. Ultimately it exposes the flaws inherent when trying to design “best match” algorithms.
In a recent post, the International Council of Shopping Centers (ICSC) said the notion of renting rather than buying used to be viewed as an option for the low-income consumer, but now younger people are choosing to rent everything from clothing to coffee tables to Dyson vacuum cleaners. “Rental companies offer customers the option to wear clothing and use items they normally could not afford to purchase outright.”
The ICSC pointed to Crate & Barrel, Rent the Runway, Fernish, American Eagle Outfitters, Express, Rebecca Taylor, REI, Vince and Urban Outfitters as capitalizing on the trend.
Is it possible for online merchants and marketplace sellers to do the same?
Mobile apps like Poshmark and Facebook Marketplace help people find items and then resell when they’re done using them. While it’s not “renting,” it is fulfilling people’s desire to own nicer things than they could otherwise afford.
The lower-than-retail price of used goods is one appeal, but how you merchandise products can help capture the attention of young people who want nice things that have the “feel” of new.
In today’s issue, we have an interview with a seller who knows all about making pre-owned goods appealing. This spring, she sold a minority stake in her business to Neiman Marcus, and she shares some tips with us on branding, which she learned when she got her start on eBay.
Also in today’s issue, a look at next week’s postal rate changes impacting large, lightweight goods, and we publish six tips on how to improve shipping operations to save money and become more efficient.
Today’s Collector’s Corner column covers hand tools for mechanics, and we end with letters to the editor.
Thanks for reading.