Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Jan 3 2013 22:25:07

eBay Subsidizes Sellers in Consignment Pilot Program

By: Ina Steiner

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eBay is dipping its toe in consignment selling, and one might ask just how far is eBay willing to go?

eBay has manned "eBay Selling Assistant" vans with its own drivers who visit people in their homes to pick up items they wish eBay to sell on its marketplace on their behalf. The program is in pilot testing in San Jose, California, and Topeka, Kansas, as described in Thursday's EcommerceBytes article.

Today I spoke with the eBay drop off store owners who are participating in the program. eBay drivers drop off consignors' goods at their stores, and Karen Blankenship in San Jose (KbeeTradingPost), and Kevin Bittner in Topeka (iSold It), list the items for sale on eBay - see Friday's newsletter for details.

Karen and Kevin are in the position of training eBay's pickup staff - the drivers and people staffing the call centers - on the types of items that will do well.

A whole chapter could be written about eBay's decision to price its service at 25% of items' selling price. When you consider that sellers must pay eBay and PayPal fees, which can easily add up to 15% of the selling price, that would only leave them with 10% to pay overhead and other expenses.

No one I spoke with today thought 25% was a reasonable fee. Linda Miller of ConsignmentPal said 50% was the industry norm. Sure enough, eBay is subsidizing the two participants in the pilot program so they receive their normal fees. But eBay still gives consignors in the Selling Assistant program 75% of the item's selling price.

Could eBay be considering opening stores of its own in local markets rather than working with drop-off stores and Trading Assistants to help power its pickup service? If we've learned anything about eBay drop off stores, it's that it's a notoriously difficult business model.

I asked eBay spokesperson Johnna Hoff if eBay would consider opening its own stores. She said she knew of no such plans and wouldn't want to speculate.

What do you think of eBay's Selling Assistant pilot program. Would you be willing to speculate on just how far eBay will take its consignment program?




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Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Sales Smith

Thu Jan 3 23:12:15 2013

It would be interesting to see ebay take a crack at it. Perhaps doing so would help them understand how difficult selling on ebay has become.

They will probably realize it's better to rob the sellers than become one.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: pace306 This user has validated their user name.

Thu Jan 3 23:14:13 2013

Problem .. low revenue(s) ...

Solution ... we need more sellers. We are even going to waste money on personel & vans ....?

STUPID EBAY - YOU HAD ALOT OF SELLERS - YOU JUST CHASED THEM AWAY WITH YOUR SILLY, ILLEGAL, IMMORAL RULES ...

pst - I need to move a desk - can I borrow the van on Tuesday ?

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Philip Cohen
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Thu Jan 3 23:29:44 2013

The gimmicks eBay is now coming out with to try to stem their obviously atrophying revenues are becoming simply comical: now they are going to arrange to pick up items from casual sellers for delivery to eBay Selling Assistants … And eBafia wants to take 25% of the selling price, before their FVF and PreyPal  … This bit of nonsense wont last long; however you look at it eBay’s/PreyPal’s 45% cut, and the consignment shop’s cut, of a 99c selling price will not go far … Should be some cheap vans for sale soon …

They surely have got to be joking, or maybe the stress has caused them all to become utterly delusional, who knows. By the time all the middlemen take their cut out of such sales there will be little left for the casual seller; the “donor” may as well donate the item to a charity shop, or leave it on the footpath for the council cleanup …

Remarkable. After spending five years driving away small sellers and referring to them as “noise”, eBay is again appealing to individuals to sell their stuff on eBay. Surely, this appeal is simply one more sign of eBay’s now utter desperation. Indeed, I suspect that the “rattling” noises that of late have been emanating from the eBay Dept of Spin sound very much like an entity approaching its final death throes …

“… a way to keep up with and hopefully surpass Amazon.”
Mr Wenig, too, is delusional, of course …

Unbelievable! How much more desperate, or delusional, can the eBafia and its gaggle of managing headless turkeys possibly become …

And who does eBafia think they are kidding? The rusting old scow is taking on water faster than PreyPal can pump and PreyPal’s capacity to pump is atrophying along with the eBay marketplace ... Regardless, a few extra casual sellers are not now going to make any difference …

Frankly, even if they stuck the chief headless turkey’s head on a pike and paraded it at the next eBay whatever, it would make no difference; it’s too late … It should be clear to any intelligent analyst (eBay shills always excepted, of course) that too much damage has been done and that the eBafia marketplace has been mortally wounded …

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: EssexEstateServices This user has validated their user name.

Thu Jan 3 23:32:48 2013

We have been operating a consignment model for the past 15 years. Ebay was our main venue for selling until the fees started going up, the selling requirements increased and things like TRS, DSR and 14 day return policy became the norm, or requirements.

Now, due to ebay changing and pushing us, we only have about 25% of our revenue come from ebay (they used to have 100%. )

One has to remember that ebay and Paypal fees are 10-12% on items that have sold. Not factored into those fees are unsold items that still have insertion fees and other misc ebay charges. Also not included are packing materials such as boxes, peanuts, bubble wrap, labels, tape and other fixed costs such as internet, phone, paper, printer ink, etc.  

Then there is the labor to list photograph and manage auctions or listings as well as customer service inquiries from buyers and monthly/quarterly accounting back to consignors.

Our annual eBay fees alone are 25% of the ebay revenue.

If someone wants to talk to me about a consignor model, especially serving downsizers or estate items, feel free to contact me. Forbes magazine used our model as an example for an article last year.  

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Philip Cohen

Thu Jan 3 23:34:46 2013

PS: Where does the "subsidy" for sellers come into this arrangement?

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: comet This user has validated their user name.

Thu Jan 3 23:49:36 2013

ESSEX---I might just take you up on that offer!

I have sold stuff on ebay on consignment.  And because I was helping friends or local fund raisers out I was NOT looking to maximise MY share of any "profits".  That said---I doubt that on TODAYS ebay I could manage to make ANY profit for these good people.

I took on a limited edition portfolio of Mozarts works culled from antique sources all over the world and housed in gorgeous hand made boxes.  I was given this to sell to raise money for a musical effort my son was involved with. The consignee---who SHOULD have done his homework!!!!---Thought this would bring $150.00.  I looked around and priced it at---$1500 or Best Offer and SOLD IT for $1300.00.  The person who received it was SO impressed she then DONATED more money to this project!  

Now heres the thing:  That was then.  There was the possibility of getting Negative Feedback IF the item had NOT been what I adverted it as.  BUT there was a very very SLIM chance of this.  And there was also a very slim chance of the buyer reporting it as "Not As Described"  or "Not Received" and having Prey Pal HOLD or CONFISCATE the funds   and me getting a BRICK back in a box.  I also received payment as a CHECK---remember those lovely things????---and I had NO PREYPAL FEES TO PAY.  And the FVF was--minimal.  

Today I would think long and hard about doing this even for such a good cause.  And that is VERY SAD.

I now have the opportunity to work with a local antiques dealer who has pretty much retired and wants ME to sell his stock for him--on ebay!  I know he knows his stuff--he knows I know my stuff---but I would be SCARED to sell FOR someone and RISK him losing his items AND his money.  

This to me is at the very heart and soul of what ebay WAS and what ebay has BECOME.

I miss the olde ebay.

Would I use a consignment service sponsored by ebay?   You couldn't PAY me enough.  

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Bloggo This user has validated their user name.

Thu Jan 3 23:50:39 2013

''Karen and Kevin are in the position of training eBay's pickup staff''
You'd think that someone at ebay would have a clue as to what sells and how to do it. Apparently not.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Bloggo This user has validated their user name.

Fri Jan 4 00:04:56 2013

ebay is going to pay people with no expertise to drive around in an ebay van to pick up random stuff which may or may not be of value. I thought their "get paid with ebay credit" was their dumbest idea yet. I was wrong.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: forevervinyl This user has validated their user name.
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Fri Jan 4 00:21:49 2013

What a great idea, ok, not a great idea but I do like the advertising that Ebay is doing alerting customers that they can sell their items on consignment. I run into a lot of customers that never had a clue they could do this. Now if only I could get Ebay to add 30 seconds to the end of each auction everytime they get a bid, I might make some nice money.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Ed This user has validated their user name.

Fri Jan 4 00:29:19 2013

Good Luck and don't worry about the Free Shipping and the DSR that will take your profits no matter how hard you work. Maybe ebay will learn that not every thing will fit in a FLAT RATE BOX and that shipping is not FREE.

The poor people that use that service will would have been better off putting an add on craigslist and keep all the profits.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Sierra This user has validated their user name.

Fri Jan 4 00:48:19 2013

Yep, another stupid idea from eBay. First they chase away most of the casual sellers (and even some not-so-casual sellers) in favor of big-time corporate sellers ... and NOW they try to get them back with this flakey ill-thought-out scheme (or is that scam?).

Personally, I *have* dipped my toe back into the eBay pool recently. I sold $170 on the site last month. Being unemployed, I'll take what I can get. No listing fees, 9% to eBay, another 3% (and change) to PayPal. That's maybe 13-14% total commission (when you include PayPal's $.30 fee). Most of what I'm currently selling is handmade items. If I were to sell wholesale (my preference), that would be at a 40-50% discount. If I sold on consignment (if I could find a crafts consignment store ... haven't seen those in several years!), they would charge between 25% and 40%.

I'm also selling on Facebook groups where there are NO fees, and doing quite well there, thankyouverymuch!

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: xcergy This user has validated their user name.

Fri Jan 4 01:25:39 2013

eBay/pp fees are just too dang high for consignment sales; along w the SNAD claims, there is no profit for the casual seller, or the lister.

eBay forgot how to cater to Main St.  They only care about Wall St.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: nsc This user has validated their user name.
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Fri Jan 4 01:46:59 2013

"ebay is going to pay people with no expertise to drive around in an ebay van to pick up random stuff which may or may not be of value. I thought their "get paid with ebay credit" was their dumbest idea yet. I was wrong."

ROFL,nicely put, bloggo.

This is another sign that ebay is simply thrashing around. "Waaah, 10 years ago we were one of the biggest success stories on the Internet, now we don't even make the Top Ten list" would be a more honest expression of the sentiment.

ebay wants to join up bricks and mortar stores to craigslist and sell through ebay and GSI services somehow. It would help if they knew something about retail. But they don't, and they don't think they need to. Surely another software or marketing gimmick will do the trick!

When the only tool you have is a hammer...you know the saying, I'm sure.

If I see ebay reinstate the seller liaison groups that Donahoe got rid of, then maybe I will think they are getting a glimmer. But no sign of that.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Philip Cohen
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Fri Jan 4 02:03:16 2013

@ xcergy,

When it comes to realizing the maximum cash profit possible from the disposal of those bonus shares, Wall Street is the only thing that counts in the short term. And I doubt these guys have ever given the long term a second thought … Certainly, the stock holders have never received a cash dividend … And then you have to consider that five years ago both eBay’s and Amazon’s share prices were ~$40. eBay’s stock price may be up a bit at the moment but don’t kid yourself, Wall Street recognises that eBay is going nowhere …

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Philip Cohen
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Fri Jan 4 02:13:10 2013

And don’t forget, Donahoe is now entering the sixth year of his failed three-year turnaround … He and his fellow headless turkeys have got to keep throwing stuff at the wall; who knows, one day something might eventually stick …

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: used2luv2sell This user has validated their user name.

Fri Jan 4 02:25:14 2013

I was just wondering who in the world they could hire to drive a van that has the words EBAY painted all over it!  I'd be fearful of an angry mob when Ebay makes their next stupid decision.
 
I would consider following the van for a few days and warning all the new customers that it's not a good idea to do business with Ebay, but I doubt that van will be too busy. They don't want the people who have proven they want to sell for years, but now they want a bunch of newbies, perhaps because they don't know the rules, won't want to be educated, and therefore are easy targets.

Will Ebay warn these people that they may end up giving their item away free if the rep selling doesn't describe properly?  What a can of worms......

Let the fun times begin.  If nothing else, it should make for some good entertainment.  Perhaps we can convince some news reporters to give it a try & show the public how the sale goes down; what they pay; what they get to keep; what it costs to buy those shipping materials; the time involved in listing & packing, and then how long it takes the post office to deliver.  

Hopefully they will be coerced into offering returns and free shipping - and the item will either ''not arrive'' even though there's a delivery confirmation.  OR, they will get a return and the buyer will insist the seller pay the return shipping.

Ahhh, did JD lose his brain over the holidays or what?  This may just turn out to be the Perfect Storm.  We can only hope!  

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

This user has validated their user name. by: Philip Cohen
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Fri Jan 4 02:48:23 2013

@used2luv2sell,

Let's not kid ourselves, by the time the consignor wears the cost of all the labor and materials involved that you mentioned, there will be little in it for eBay out of a 99c sale and nothing left for the consignor; indeed the consignor will probably end up owing eBay and the consignee money.

This ludicrous idea has to have come straight out of one of Donahoe’s dream-time trips down the rabbit hole to Wonderland and further demonstrates how utterly delusional these headless turkeys running eBay have become …

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Dazzle This user has validated their user name.
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Fri Jan 4 04:03:24 2013

Just finally threw in the towel and closed my ebay store for good after 13+ years. Hadn't really used it for the last 6 months just kept paying the basic store fee. Since all my work is lost why keep it open anymore? Their "rake" of the cash is just too much to justify selling anymore. Pretty simple. What built ebay? Affordability for the sellers to justify the work and availabiity to harvest actual buyers.  I opened an antique mall 10 months ago and never really looked back. Coming up on my 1st anniversary I see only good things to come. Would I come back? Absolutely. It was always my desire to put everything in the mall on ebay. I have 30+ dealers and thousands of really cool antiques and collectibles but my dealers and myself actually have to make money not give all the profits to ebay.

Want to compete with Amazon Ebay?
Grow up and act like them - eliminate the pork - start with JD and his multimillion dollar salary and work your way down - get back to basics and the people who really built your business.

Perminate Link for eBay Subsidizes Sellers in Consignment Pilot Program   eBay Subsidizes Sellers in Consignment Pilot Program

by: Dazzle This user has validated their user name.
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Fri Jan 4 04:05:59 2013

One more thing - everyone keeps saying internet buying is the deal now - I question that thought - all I see now these days are buyers who want to actually shop and see and touch what they are buying.

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This user has validated their user name. by: baconsdozen
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Fri Jan 4 08:37:52 2013

I simply use ebay to direct customers to my own web site,if I pick up the odd sale it's a bonus but to rely on ebay,with all its faults and greed is a short sighted policy.

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