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From the Editor – June 16, 2019

EcommerceBytes Editor Ina Steiner
EcommerceBytes Editor Ina Steiner

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.”

But on May 21, 2019, eBay updated its Payments Terms of Use, adding a “per listing” fee that is more complex and has the potential to be more costly for many transactions under the Managed Payments program. This is not a fixed fee per transaction – it’s a fixed fee per listing.

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.

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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.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
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.

One thought on “From the Editor – June 16, 2019”

  1. >>Ultimately it exposes the flaws inherent when trying to design “best match” algorithms.<<

    Well, I must be really dumb about designing searches. What is wrong with if someone inputs Red size 12 evening dress, does the search not return all those possibilities and if they don't find what they want, they add in some other parameters such as 'sequins' + 'beaded' or 'blue'?

    Earlier this year, I wanted to find some card making magazines. That is all I searched for and no matter what came upon the list, that is all I looked at, yet when checking out, what did they decide to show me as I should be interested according to their search? Muscle magazines, SI Swimsuit edition, and baseball cards! Why not something like more card making magazines that I may have missed or even showing the ones that I had spent more times looking at, except that was probably since it is so hard to find a description of what you are looking at since instead of the listing, you see ads for everything else. Makes me LOVE eCRATER so much. They show ads only at the bottom of the listing. Nothing to interfere with the listing itself.

    I don't know how much longer these companies can get away with treating buyers and sellers so shabbily. They are going to find all that lovely money that is coming in and they are scooping up with big shovels for the bigwigs' own personal slush fund, instead of finding some decent IT guys, The money will be gone along with their jobs. But that is okay since all it takes for most of them to earn enough at eBay in a year, they won't ever need to work another day if they don't feel like it. Unlike the regular sellers who will be left with inventory and scrambling for a place to sell it.

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