eBay held a Town Hall Meeting on March 16, 2011, to let sellers ask questions about the Spring Seller Update eBay announced on Tuesday. AuctionBytes Contributing Editor Greg Holden tuned in and reports on what took place.
Editor's note: This is not a transcript, please note that many questions and answers are summarized/paraphrased. Apologies in advance for misspellings of people's names - we're happy to correct if notified.
Griff: Welcome to the eBay Town Hall. Lee Mirabal assists.
Focus will be on yesterday's announcements: changes to fee structure; new shopping cart; updates for new or below standard sellers; changes to fashions and parts accessories; and shipping international. "Huge room full of experts" from eBay available.
Todd Ludwak, Seller Experience.
Brian Soo, on Seller update
Seller standards: Mike Moffia
Communications: Yardley Ip (Sr. Product Manager, eBay Engagement team)
Shopping cart: Andrew Shearer (Director, Product Management: New eBay Shopping Cart)
Seller Standards: Christina Clausen
Also 600 employees in the room.
Todd: overview of what was announced. Highlights include fees: Buyers tell us they love free shipping, we wanted to create a platform where we incented sellers to offer free or low-cost shipping. eBay will begin charging based on fees and shipping. For sellers who don't have a store, we are moving to free insertion fees at any start price up to 50 listings per month.
Significant improvements to the buyer experience, he says. "Every change we make, we do in the spirit of improving the buying and selling experience." Want to improve "trust, value, and selection" for buyers.
Most comments coming from fee update, and from sellers who believe "not always correctly" they will be negatively impacted on this.
Let's read a few email comments:
Q. "Huge mistake basing FVF on shipping. "
Q. "This might put sellers out of business - I won't ship internationally any more, I can't afford the fees."
Griff says that is a misconception.
At the other end of spectrum:
Q. "Bravo, I will see a real fee decrease. "
Q. "New fee structure is not bad business."
Q. "Overpriced Chinese shipping will level the playing field."
Q. Caller on phone (Syracuse): I too love eBay and buying and selling since 2004. Been paying close attention to what was said. I don't understand what made the persons who make the decisions at eBay think we were charging way more. We are selling things for less money to stay visible. Most of us are not adding anything to the charges. When I sell and send it for free - I will make zip, I will make way less. Friend in San Diego ships paintings, will have to add fee to cover shipping charge.
A. A lot of the questions we get are about this. We have lowered the final value fees in our fixed price area and store auctions to accommodate a reasonable amount of shipping. We realize there is no such thing as free shipping. Look at our fee calculator and fee illustrator to see if you will be impacted negatively. Many sellers find they will be better off. People who provide cheap or reasonable shipping are going to be better off through this.
Q. Richard, Colorado: We sell lot of stuff at $3.99, $4 shipping. People say we will buy five items, and get them in one box for $4. If I list them now, I have to list every section at $7.99, so they pay $20 shipping.
A. Are you not using combined shipping rules?
Q. We have 1300 items in store. People buy 5, we use same shipping - $4 for each.
A. Brian: When you have multiple items sold to a buyer, you give them a combined shipping discount. We are only going to charge the FVFs on what the buyer pays for shipping. The $4 they will actually pay.
Q. If I sell one item you are doubling my fees.
A. Brian: That's true. It will be a price increase for you on that item.
Q. If I put free shipping on there, it's not going to sell, I'm not going to do it.
A. Griff: You've tried?
Q. It's not going to work.
A. Griff: It is never smart in any business to assume that something won't work. You have to test. Right gang?
Q. Brandon, Texas: I'm really unhappy with the new change. How can eBay charge a fee for services it does not provide?
A. Todd: This is similar to the call that just came in before. This has a lot to do with what buyers' expectations are. A previous caller mentioned that he charged a shipping cost that was in excess of the item's price. That's not what buyers want. More and more sellers have moved to free or low-cost shipping and we're working to make this happen. Roughly 30% of sellers on site charging free shipping.
Q. Tom, Illinois: I understand the desire to charge FVF on shipping. Why not allow a TRS discount on shipping and handling? And if we offer three shipping options, it sounds like the fee will be assess on Priority Mail is $5, I'm going to pay more based on what the buyer wants.
A. Brian: On the Top Rated Seller discounts, what buyers really expect today is free and low cost shipping. We're driving an incentive for our Top Rated Sellers to do free shipping, to maximize their 20% discount. We're hoping our Top rated Sellers will do more of that?
A. On the other question, you will be charged more on what the buyer pays.
A. International and domestic: If you're offering a one-day service or international service, we will charge you on your first non-domestic one-day service.
A. eBay staffer asks: What do you sell? What's the average price of what you sell?
Q. $11-$12, I charge $2.95 1st class, $5.95 priority mail.
eBay: Griff asks: have you considered adding the cost of the shipping into your item cost?
Q. No, because people see me as charging a reasonable price.
eBay: The shopping cart will give us the chance to offer discounts like this (for multiple purchases from the same buyer).
Q. (email): What happens in this scenario: buyer puts item in cart. Seller wants to make change to listing. Can a seller make change while it is in cart?
A. When a buyer adds an item to a shopping cart it is not the same impact as clicking Buy It Now. Seller is not obligated to reserve that item. Yes, a seller can make a change to a listing. If this happens, an alert will appear that the buyer will see letting them know a change has been made to the listing.
[Phones ringing off the hook, Lee remarks.]
Q. I'm a small time seller, no store, how can eBay add a shipping fee to my sales fee and charge me a percentage off of that? I don't make anything off of shipping. They make a ton off of my sales already. How can they do that? They don't provide a service for shipping. How can they get a percentage of my materials cost and handling cost.
Griff: What I'm hearing is, How can you do this? Is this legal that you do this?
Brian: There's a lot of precedence for this, there are other marketplaces that do the same thing, Paypal, Half.com, Amazon, they all do this. It has become industry standard. We're slow to adopt it. To the comment, this feels like a price increase for me, you're not a store subscriber, if you are selling fixed price, fees coming down; if you sell at auction, fees are being taken away at the front end.
[Lee mentions that tomorrow, you can speak to someone at eBay, 10:30 Webinar.]
Q. Suzanne, PA: It's naive for all the people calling in, asking why is eBay charging fee, eBay wants to make more money, and they want people to go to fixed price, and why bother to call yourself an auction site any more. You're all getting too big for your britches. I don't think there's any reason for us to ask, "Why do you do it?" because you've already done it, like so many other things. Also, how many times have you searched for your item, and you don't see it come up at all, even if you put in words that you know are in the title. You have paid advertisements for wetsuits and other items at the top. It's all about the money.
A. Griff: I want to disabuse this notion that eBay is trying to get rid of auctions. If we were trying to get rid of auctions we would shut them off. We have made them free up to 50 per month.
Other eBayer: This is the single largest step we've taken in favor of auctions. We are indifferent at eBay. We are a marketplace. We're doing to this because this is what buyers are telling us to do.
Q. Laurie, NY: I have no store, small seller, shipping calculator, I charge actual shipping to my customers. I'm feeling the way this is set up is unfair, it is affecting people differently based on where they live. People buy from West Coast. I don't feel it's fair that people should live close to me because I'll pay less in fees compared to California.
A. Griff: Have you considered moving shipping into cost of item?
Q. I would have to calculate the shipping to the farthest point and that would not be fair to buyers close to me.
A. Most will take the average shipping price.
A. Go back over last 12 months, determine average shipping price, and see what the outcome is over different periods. That's what every business does. [cuts her off while she is trying to speak.]
Q. Paula in CA: I'm a seller on eBay for 10-12 years. I'm upset about this on so many levels. I live on West coast and sell wide variety of antiques and collectibles can weigh 2 to 12 lbs. I price by taking shipping into account. Now I won't be able to do heavier items because it would be ridiculous for me to do FVF based on the shipping.
Griff: You won't get a refund for FVF on part of the shipping if you …if you offer shipping discounts in the form of a refund back to the buyer, you won't get a refund for your fee.
[Griff invites everyone to email him, and try it out. ]
Q. How is eBay going to handle the price increases with the post office - eBay will make money every time the P.O. increases fees.
A. Griff: Fees go up generally. I want to disabuse the notion where there were a bunch of us rubbing our hands and thinking, how can we make more money. We want buyers to come back to us and keep thinking of us first.
A. (Yardley?): eBay makes more money when our sellers make more money and when they are successful. They are more successful when they offer what buyers are looking for. Sellers, previously, wouldn't do this because they would pay higher fees. We have tried to remove the disincentive.
A. Todd Lutwack: We have run the fee illustrator for every seller on eBay. The majority of sellers will experience a fee decrease or no impact on the business.
Q. How clear would it be to buyers using the shopping cart that they are buying from more than one seller?
A. Andrew: We made the decision to organize the shopping cart by Seller ID. It's very important to us that buyers know who they are interacting with. From there, everything happens the same way it does today.
Q. Beverly, CA: Suggestion for future town halls: Lot of the same complaints over and over again. Prescreen the calls?
A. They may say something different than what they said to us when we screened them.
A. This is a hot topic because it affects peoples' money. In the next week or two, more and more questions will come up, so keep listening.
Q. How is the checkout going to work? We have adopted free shipping. However, we sell big and small items. With offering free shipping for jewelry under $10, will the checkout look at the one person who bought three items and take that as one payment?
A. Great question. I hadn't thought about it.
A. Fundamentally, the process of buying three items from a single seller doesn't change in shopping cart. You pay for all three items at the same time.
Q. Richard, WV: I'm disgruntled over changes, I am TA, I sell collectibles, I realize this will charge me double what I normally pay in fees. Thinking of leaving eBay. Average sale $10 or $11. I'm going to get hurt, dramatically hurt, by the new fees. $2.75 for handling fee. I consider that reasonable; most of my customers do too. Most buyers don't understand shipping, especially from the east coast to the west coast.
A. Is the bulk of stuff you sell on eBay consigned to you? Yes. Consignors pay all fees for selling? Yes, I charge an additional 10 percent. Are you charging your consignors, are you deducting the proceeds, the cost to sell, including fees on eBay. Will eBay consider in future, since you are charging us a fee for shipping, will the add'l cost towards becoming a PowerSeller?
A. You might be able to try, the advice if you're not yet TRS, and what has been holding you back is shipping, best thing you can do is charge free shipping.
A. That's something we're contemplating right now. If you put shipping into your item, you would do that.
A. One of the best practices is not to charge handling fees any more. This is not what buyers expect.
Q. Joel in PA: Sounds like you guys are serious about this and you feel this incentivizes us. How does it save me on fees if I offer the customer a better shipping option. If seller selects upgrade to priority mail, and I am already charging free shipping, I pay more, and you guys are going to tax me 11% on top of that.
A. What is the average selling price of items you sell on eBay?
A. We have lowered the FVFs in all categories. This seller would save and go from 12% to 10% fees on all items he sells on eBay. …his answer is that on average, he will come out ahead because buyers only request upgrades 6 percent of the time.
Q. Nat in PA [This guy is angry]: OK, I have been selling for a living since before there was an eBay. This whole new deal is an insult to my intelligence. Telling me that somehow I will benefit from this is ridiculous. My shipping is three tiers: one for small items - flat paper items. One is a small cardboard mailer I pay for, I charge $2.75, that includes first-class shipping, the cost of the mailer, delivery confirmation. (charges $4 to $7 in retail for those items)
The next level for $4 is a large cardboard mailer, merchandise is generally $8-10.
And the third flat rate priority mail envelope $11 and $15 costs me $5.65 fees exactly. There is no way I can build any of these into my item price.
A. You've tried it?
Q. Telling me that somehow I should raise my prices - I know sellers that have charged free shipping and got low DSRs for shipping. And when they went back to charging it adjusted.
A. But that's not possible, because if you offer free shipping, no one can rate you anything on your DSR except a five.
Q. Let's not argue about that. I've got an item that is $11.95, something I've been selling for the past 28 years. I know exactly what the market is for this. It weighs 13-14 oz. I cannot send it first class. For $5.65 in a flat rate envelope do you want to tell me seriously to add this $6 into my price?
A. You've tried it?
Q. I know better than to try it, I've been doing this for 30 years.
A. There's always room for trying and testing and changing.
Q. No one will buy it! There's room for you telling me something that insults my intelligence …you somehow know something more about my business than I do.
Q. Mary, Massachusetts: I need some advice. I sell a handmade product. I am a small time seller, I ship all over the world, unfortunately my item is first-class everywhere, I put in fixed price - GTC. Usually people come in, buy one item, put it in a polybag, ship it. Some people buy 4-5 items, I say in my listing, please request a total when you're buying multiple items. Very rarely do I ship anything over 13 oz. so everything goes 1st class. How will this affect me with the Good 'Til Cancelled? Sometimes people buy 4-5 or 6 items and pay the for all 6 items - I have to weigh them and refund the difference in the shipping, and I know that's going to impact me. How do I change my platform so this doesn't happen? I can't afford a store.
A. I'd love to know what this seller is paying and charging for shipping in aggregate. How much of those shipping prices should they build into their sale price? I'd love to see an experiment to offer free shipping.
A. You're providing combined shipping, but you're not using any of our combined shipping tools.
A. Having a store or not will not affect your shopping cart. You have access to the cart regardless.
Todd: The reason why we made the changes we are making is we think it will bring more buyers to the site, who will buy more items.
About the Blogger:
Greg Holden is AuctionBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website (GregHolden.com), which includes his blog, a list of his books, and his fiction and biographical writing.