AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Thu Jan 31 2008 08:44:10

Doing eBay (Seller) Math to Compute Discount Benefits

By: Ina Steiner

Sponsored Link

I spoke to eBay PowerSeller Steve Grossberg last night. Steve heads the non-profit trade association IMA (Internet Merchants Association) and attended this week's Ecommerce Forum and had a chance to speak directly to eBay executives about the many changes the company announced on Tuesday.

Steve said he thinks the change to feedback are good, which is contrary to what I've been hearing from AuctionBytes readers. I'm intrigued, but I wanted to save further conversation for a podcast audio interview, so I'll be speaking to Steve again a few days from now and should have it to the website early next week.

Steve also made a really interesting point about the discounts that eBay is offering sellers. You can read about the discounts here. This is the gist of it:

If you are a PowerSeller and all four of your detailed seller ratings (DSRs) for the past 30 day period are 4.6 or higher, you qualify for a 5% discount on Final Value Fees

If you are a PowerSeller and all four of your detailed seller ratings (DSRs) for the past 30 day period are 4.8 or higher, you qualify for a 15% discount on Final Value Fees

Steve used an example of a seller who might push to get 4.8 DSRs and save $200/month with the new discount. He said that seller might instead raise his shipping and handling fee by 50 cents - forgoing the 4.8 rating (which is hard to attain anyway in the S&H DSR), and make an extra $1,200.

I don't know how realistic the specific numbers are, but I think the point is well taken. After I spoke with him, I thought about some of the other factors at play - eBay is favoring sellers with higher DSRs and low S&H costs in search. I'm sure Steve will have more to say on this topic, so keep an eye out for the full interview.

The conclusion I draw is that eBay has no real control over its sellers, and the carrot-and-stick approach it rolled out on Tuesday is not a guaranteed recipe for success.

As for sellers, it's going to be very uncomfortable over the next few months as they try to figure out how the new fees affect them and try to determine whether their listings are getting exposure in search. I hope to have lots of conversations with sellers and experts to share successful strategies with you.




Comments (35) | Permalink

Readers Comments

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: firemeg

Thu Jan 31 08:54:36 2008

Those 5% & 15% "discounts" will be applied to the new pricing structure, no?  Raising core FVF's in some tranches by 66% and SIF FVF's by 20% still means that PS's will be paying more in commission come the 20th.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: FPD

Thu Jan 31 08:56:07 2008

I'd like to hire the accountant that figured out this complex price schedule (to the benefit of eBay)- what's his name?

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Lori

Thu Jan 31 08:58:45 2008

I don't care what Mr. Donahue or ANYONE has to say .... PowerSeller with 100% Positive Feedback here (and we worked very hard to get it and keep it) .... after this new feedback policy starts, we will never sell another stinking item on eBay. Removing sellers' opportunity to leave negative/neutral feedback, but allowing buyers to continue to have the power is outrageous and unnaceptable. Goodbye eBay!

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: C.P.

Thu Jan 31 09:09:04 2008

All these changes are designed to make sellers fail in the feedback and DSR area. Once they do they are then forced to accept "A safe payment method" or paypal and with that you'll have to accept credit cards and the associated paypal fees. The efail system will of course also hold your money for 21 days. Thats what a lot of this is about, driving out the small or casual seller while making money off the massive amount of money that will be held by paypal. I smell a lawsuit.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: charlie.foxtrot

Thu Jan 31 09:13:38 2008

What are our viable alternatives to eBay?

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: virginia

Thu Jan 31 09:15:27 2008

As a seller, I will NOT pay Ebay any more fees - reduced or not - to be so abused!!!  Ebay needs to go back to school, and re-learn their basic business lessons.  SELLERS ARE THEIR CUSTOMERS.  Ebay is no longer a Capitalist website, but simply another overblown Corporate website.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: C.P.

Thu Jan 31 09:15:51 2008

Sorry but I forgot to mention that if you are a paypal user and dont accept credit cards with paypal you cannot have a link to paypal for payment   You cannot say in your listing that you accpet paypal either. That is why I think this is about holding your money for the interest.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: auctionwally

Thu Jan 31 09:22:51 2008

What is one of the first rules of commerce?

'Make things easy and convenient for your customers.'

It's very clear to see that eBay is going in the wrong direction on this FVF fee structure.

That said, I don't even think that people would resent a fee increase so much if it were not sold to us in a deceptive way.

This punishes only the people who actually have a good sell through rate, and rewards those who list items that don't sell.

To institute a fee increase and try to market it to us as a fee decrease is an insult to our intelligence.

Don't pee on my foot and tell me it's raining.

eBay has always had a big communication problem with it's sellers, but now it's gaining a credibility problem.

With the new feedback scheme, I'd like to know if Steve G. listed above has considered the the problem of feedback sabotage among highly competitive sellers.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Lyn

Thu Jan 31 09:48:25 2008

What, are you folks on ebay's payroll now? Wednesday's editorial is infuriating. There is nothing and I mean nothing positive about the changes ebay has announced. PayPal and ebay will collectively cripple and very shortly kill off large and small honest sellers alike, since nobody will be able to maintain a high enough feedback rating now with buyers free to run roughshod over them (assuming buyers can even find anything they want now on ebay). Gone almost immediately will be the small sellers of unique items of about $25 or less. You folks seem to dismiss that huge  huge market as being something insignificant and better dead anyway. Are you nuts? Well, the positive side of mass buyer and seller desertions from ebay (and don't fool yourselves into thinking that this will just blow over) is that change equals opportunity. Up and coming sites will do well to implement an intelligently modified and not greed-driven model of ebay's original great idea, and the first one to do it well and also ADVERTISE in the mass media that they are the new old ebay will be the winner. It won't be Amazon.com, which is just a big online WalMart and a heck of a lot better managed than ebay ever will be. So bottom line, if ebay wants to be Amazon, let them do try. It is a huge tactical error on their part. I'm typical of my "class" of sellers AND buyers (I do both in equal share in my niche)...out of ebay, looking for a new home. Why don't you folks spend more time talking about what other online auction sites can and are doing to take advantage of this huge opportunity and less time trying to keep ebay's stock from tanking further? They're dead. Move on or keep insisting that the ship's watertight doors make her unsinkable. Better brush up on the tune...it's "Nearer My God to Thee."

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: F. Natteri

Thu Jan 31 10:01:59 2008

I think this article is very biased with eBay.

How in the world this new fee structure can be good for sellers? Leave alone the new (?) feedback system, which I am more than sure that will bring more problems to eBay business.

It is a real shame... I wonder who propose these ideas (?) at eBay.... he/she/they should be fired right now...

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Carol

Thu Jan 31 10:37:47 2008

I went to a small town school but my math skills are still better than the people at ebay.  I left in 06 and couldn't be happier.

Charlie.Foxtrot - There are quite a few alternate sites that have been around a few years and there are some popping up overnight so to speak.  I personally love eCrater.com and no they don't have the traffic of ebay but I don't have any of the headaches either and I do make sales.

You can go to PSU and find a large list of alternate sites, Auction types and Store types.  If all else fails just Google it and you can find them.

Luck to all ebay sellers!

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Upset

Thu Jan 31 10:45:42 2008

Stop putting the SPIN on it. the discounts to the FVF are for the POWERSELLER ELITE, not the every day seller. I'm an every day seller who has been selling for 11 years. I was a Powerseller for 5 of those years when it meant nothing other than you had the ''rights'' to display a logo. My feedback is 100% positive with 3600 entries. My DSR rating is currently 4.8 averaged across the four categories. My don't I qualify for a discount? I'm some lower form of life? My money isn't green enough? Why is eBay giving it's elitists (many of whom are high volume crap and drop shippers) the unfair advantage? EVERYONE, and I do mean EVERYONE ought to qualify for those discounts if they meet the right criteria. No matter how I run the math, my fees are going up an average of 40%. There is no spin or double talk on that. That's the reality.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: AG

Thu Jan 31 10:48:33 2008

It IS a fee decrease to ebay because they will receive less overall revenue.  It's certainly a fee decrease for me and my model.

I am thrilled with the new feedback system.  The only sellers that are whining about it are those that either have to change the way they do business or they are out the door. Good sellers such as myself are thrilled. These changes equate to less bad sellers plus more customers equal great sales for the good seller!  This is the best thing that has ever happened to eBay!

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: vanman

Thu Jan 31 11:10:26 2008

Ebay free gallery really not a discount at all since if your using firefox and ebay toolbar you get to see gallery pic even if seller did not pay for it. I think ebay realized this so could not keep charging for it if buyers can already see if for free. They spin it so it looks like a discount for people who do not already use the toolbar.  

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Matt Price

Thu Jan 31 11:12:00 2008

"Steve used an example of a seller who might push to get 4.8 DSRs and save $200/month with the new discount. He said that seller might instead raise his shipping and handling fee by 50 cents"

Under eBay policy, this would be considered excessive shipping and fee circumvention.

The reason I know, is because UPS charges me 2.65% surcharge on shipping due to fuel.  When I adjusted my rate on those items, eBay pulled the listings.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Henrietta

Thu Jan 31 11:51:20 2008

I don't have a problem with the fee increase. I sell under $25 items for the most part and don't use gallery so for me it IS an increase.

The seller feedback restrictions are OUTRAGEOUS and the first negative I get from a buyer will also be the last.

I do have a problem, like Upset, with the discount system. I am not a PS although under the new devalued system I could be simply by putting a bunch of 99c garbage listings up. I will run the math on that this week.

I know that in the almost nine years I have been selling I have seen a fair number of super star PS arise and then crash & burn. I am still here, listing less than I was before each time eBay poops on me, but still here. I DO know that there are/were many more sellers like me out there than PS. So evidently I am 'chopped liver' on eBay now and I am taking the hint.

Well, what to do?

I am going to Amazon, drop a few listings on Overstock and check out some of the smaller startups. I will keep a small presence on eBay, close my store there as planned last year and watch with interest to see how it pans out.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Laura

Thu Jan 31 12:08:08 2008

Did anyone read Ina’s Blog this morning?

Seems to me that raising shipping on all your products to offset the cost is the perfect solution.  According to Ina’s Blog interview of eBay’s PowerSeller Steve Grossberg:

“Steve used an example of a seller who might push to get 4.8 DSRs and save $200/month with the new discount. He said that seller might instead raise his shipping and handling fee by 50 cents - forgoing the 4.8 rating (which is hard to attain anyway in the S&H DSR), and make an extra $1,200.

This works in a number of ways.

1 It will help and empower all sellers not just Powerseller.  We control our discount level.

2 Ebay is trying to force unrealistic constraints on us to improve the buyer experience. The buyer’s main complaint is shipping. So by not budging on shipping, this will make it so Ebay will NOT be able to achieve their corporate goals at the seller’s expense. Although I don't think ebay has this goal to help buyers but their own profits.


Personally, I have bought more then I have sold on ebay, and as a buyer, I can tell you that I know what the shipping is prior to bidding. If I bid, I have agreed to those charges. I also don’t take into consideration a Seller’s feedback score on shipping before I bid. I do care about the sellers other feedback scores though.  However, I don’t think it’s justified to have $99 shipping on a .01 auction. I view those sellers as cheats and I would not want to do business with them anyways. But a few dollars extra on shipping is more then understandable.

So, just raise your shipping if you don’t sell enough to qualify for Powerseller status or you lose your Powerseller status due to not being able to get the 4.8 DSR on shipping no matter how hard you try, or you competition neg’s you out.

Because, as someone with 100% positive feedback but without the volume to qualify. I will make my own discount.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Honey

Thu Jan 31 13:03:54 2008

Ina, next time you talk to Steve, ask him about the difference between http://imamerchant.org/blog/looking-at-ebays-dsrs-i-am-concerned/ and now. His perspective seems to have done a 360.

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Beady Eye Guy

Thu Jan 31 13:12:57 2008

I have 4.8s across the board and am a powerseller.  When I saw the craziness happening with DSR, I started sending more email to my customers (communication went from 4.8-4.9) and made my additional item shipping costs lower.  My shipping is the best among my category of sellers and I have had a 4.8 from a 4.7 months ago.  

I will say it wasn't easy, but I saw this coming and I welcome it.  I am sorry others are hurt by it but some media sellers (for example) think dropshipping is the way to making money and they are being proven wrong.  

Doing eBay (Seller) Math to Compute Discount Benefits   Doing eBay (Seller) Math to Compute Discount Benefits

by: Juli

Thu Jan 31 13:20:40 2008

I'm a powerseller and have been so for a couple of years.

Sure, you can skip the 4.8 goal for the better pricing on FVF and raise your shipping a bit.

But if that drops your DSR for shipping, won't you possibly be disadvantaged in search?  If that's the case, won't you possibly lose money that way.

I want a level playing field.  Forget best match and priority in displayed listing.  Sure - I would benefit as a seller, but I don't think it's fair.  Nor, as a buyer, do I like it.

Click to view more comments
1 2  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.