Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Apr 13 2015 21:10:38

eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

By: Ina Steiner

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In Tuesday's EcommerceBytes Newsflash, we catch up with eBay's latest consignment-selling program, eBay Valet, a program that replaced its Trading Assistant program, which closed in 2013.

One obvious question is, why would eBay trade an army of Trading Assistants for two large logistics companies? A second question important to sellers is, what's the impact on them?

eBay spokesperson Karen Crocker Snell told me the marketplace continues to test and pilot new programs to help simplify and streamline the selling process on eBay. "eBay will continue to evaluate different programs and scale the programs that increase engagement amongst eBay customers. The pilot gives potential sellers a simple and convenient way to sell items on one of the world's largest marketplaces where Valets manage the photography, listing, shipping and buyer returns of all your items."

Freelance writer Elizabeth Woyke, who wrote about eBay Valet last year on Medium, speculated that perhaps the Valets pay eBay a revenue share for the privilege of participating in the program, or perhaps eBay wanted to simply centralize it to provide an image of a cohesive, professional eBay-run and managed program and not dispersed and grassroots like TAs. 

It's hard to imagine eBay Valet is a profit center, given the extremely slim margins - eBay actually had to subsidize the consignment sellers in one pilot program that we wrote about in 2013. And eBay Valet also runs a call center fielding questions about the program, an expensive proposition. This is no offshore customer service - I called eBay Valet at 855-USE-EBAY and spoke to an easy-to-understand rep who was able to answer some questions I asked about using the program.

Certainly eBay has expressed a desire in recent years to provide shoppers with a consistent experience, and it may feel  that way about the consignments program. There may also be some behind-the-scenes partnerships we aren't privy to, or perhaps some legal concerns.

Doing the Math on Consignment Selling
A consignment seller had told EcommerceBytes in 2013 that most successful eBay Trading Assistants and drop off stores charged 50 - 60 percent for their services - that includes selling fees. She herself took a 45% all inclusive cut of the proceeds - but between eBay and PayPal fees, she actually earned about 30% of items' selling price.

She began participating in a pilot program called the eBay Selling Assistant program in the fall of 2012. At the time, eBay gave the consumer 75% of an item's selling price, leaving Selling Assitants with only 25%. When eBay and PayPal fees were factored in, that left Trading Assistants with 10% to cover their labor, rent and other expenses, she said. That would not have been sustainable, but EcommerceBytes learned eBay was subsidizing the sellers who participated in the pilot program.

Under the current eBay Valet program, eBay deducts fees from the sale price:

For items that sell for less than $50, the consumer gets 60%;
For items between $50 to $200, the consumer gets 70%;
And for items that sell for over $200, the consumer gets 80%.

What do you think - why did eBay replace Trading Assistants with Valets? Is eBay generating a profit from the program - if not, why is it offering it at all? And does the math work out for consignment sellers on eBay?




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Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

This user has validated their user name. by: Philip Cohen
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Mon Apr 13 21:46:31 2015

The trouble with the cretinous Johnny Ho is that he has always been too stupid, or too arrogant, to recognise that the original round smooth shape of the “wheel” can not be improved upon; now this headless turkey has developed a wheel with flat vectors, and as the eBay cart trundles along on its journey down the hill towards the sewage farm, it goes bumpety, bump, bump, bump ...

The eBay executive suite—where the incompetent mingle with the disingenuous, the malevolent and the outright criminal, and the just plain stupid … http://bit.ly/11F2eas  

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by: pace306 This user has validated their user name.

Mon Apr 13 23:18:30 2015

If John Donohue did such an AMAZING job the last few years running eBay - selling on eBay should be the best experience EVER ... yet its not.

The creation of the Defect and the constant hammering on sellers with undeserved negatives and punishments - proves its no easy job.

The people who - in my experience - cant/wont sell themselves all think their items are worth a FORTUNE. After all - eBay says so .... you can get layed off work and become an eBay millionaire. Usually those items are junk, too heavy to ship, or are totally UNCOOL aka slow moving.

As I sell myself, this topic means little - since eBay valet isnt Amazon FBA in any case.

FBA gets you PRIME customers and lots of sales usually via the buy box.

What does eBay valet get you? (insert crickets chirping here)

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This user has validated their user name. by: iheartjacksparrow

Mon Apr 13 23:20:22 2015

I see that eBay wants you to send them early issues of comics and rare baseball cards, plus your smartphones, tablets and laptops.

So... I send them my tablet, the Valet sells it, I get the money, and then the buyer wants to return it. What happens then? Is the money sucked back out of my PayPal account, or does eBay eat the loss? Because we all know the kind of buyers that eBay is cultivating.  

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by: Moonwishes This user has validated their user name.
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Tue Apr 14 01:01:17 2015

Years ago I sold a few things on consignment on ebay. High dollar sewing machines. No matter how carefully I explained the fees and what my take would be and that I couldn't control the end auction price (which were good), they were always disappointed in what they made. They were perfectly capable of selling themselves but that would mean they would have had to work for it. Then I was asked if I could sell an old children's outdoor toy set. Mom thought it would be worth about $10 which is what she wanted to get from it. Then I had to break down the cost for her. Between postage for a big bulky item, and my fees and ebay/PP fees she would be owing me money and not the other way around. Yet again another look of dismay that she couldn't make money for no work on her end. At that point when people asked if I sold for others, I always, and it is true, said that I was too busy listing and dealing with my own products to do anything on consignment.

So when I hear about these 'wonderful' programs, I wonder how anyone makes any money doing this valet/consignment service. It is one thing if you want to sit up till midnight listing your own stuff because you are trying to get some extra cash set aside for a vacation or groceries, but are valet people going to be that dedicated for 10-20% of the sale? I doubt it, at least not for long, especially when you spend half your time educating folks on the fact that their stuff isn't worth nearly what they think it is worth and if they want more money they need to sell it themselves, since your fee will really cut into their 'profit'

I also wonder about the refunds/negatives, etc. when buyers who are now well educated to be asking for their money back without sending the product back. Will the Valet be left holding the bag?

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This user has validated their user name. by: shabbychick

Tue Apr 14 01:17:57 2015

Its kind of funny really. Its almost like Ebay (well, at least their Valets) will be subjected to their own inane policies. Talk about Divine Justice! They will have customers claiming SNAD and asking for partial or full refunds then not returning the items. They will be blackmailed, cajoled, and manipulated by buyers and subjected to their own impossible rules. Sort of a Dantes Inferno, although I am sure Ebay will find a way to pass all the suffering onto the Valets.  

Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

by: Joey4711 This user has validated their user name.

Tue Apr 14 01:42:20 2015

Ijacksparrow...

right you are sir...as Ebay is training buyers to be unreasonable, and rewarding them for doing so.  Have a buyer now who told me if I give her $10.00 back she will give me good feedback. I look at the last 15 feedbacks 10 are negative..)  Now I am stuck with do I provide her the $10.00 back to avoid feedback issues or do I deal with Ebay and hope to God they get it removed?

Lastly, I don't know what it is about Ebay but buyers often ask for 50% off of something, huh?  Now we need auctions after all the years of getting rid of that flea market, yet Toysrus, Target, I don't see them doing auctions anytime soon....thus are we the one to take the loss so Ebay gains?  

As for Ebay Valet, the only way to really make money as others have posited is you need volume and I am sure that the search engine gives them preferred coverage....like they do their big box stores etc.  They have to post 100000 listings a month....as for returns and refunds you don't get paid for 14 days if your the cosigner of the product.....why? So when the not as described claim comes in they don't pay you...fun fun fun.

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by: Chicago48 This user has validated their user name.

Tue Apr 14 04:22:51 2015

Ebay consignment makes no sense whatsoever--except for the high-end designer names, like Jimmy Choo shoes which sell for $1500-2000.  And then one would have to have a lot of Jimmy Choo-like items to sell to make it worthwhile. So the program would only appeal to the actual manufacturers of high-end luxury items.

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by: FREDDY This user has validated their user name.

Tue Apr 14 04:38:41 2015

No way.

With ebay-paypal return program you might as well throw the items out or drop off at goodwill and take write off.
ebay is just getting more ridiculous by the day.

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by: charcorvet This user has validated their user name.

Tue Apr 14 06:29:12 2015

If this program is targeted to "casual sellers" then why am I getting it? I have, right now 1500 listings.  I typically have 2000 but we're in inventory-mode and "ship it to a real auction" mode because... wait for it............  EBAY IS NOT SELLING SQUAT FOR ME

So why in God's name would I bother with a consignment situation and lose more money?

Thanks for the final slap in the face ebay.  "casual seller" indeed... hrrrump!

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by: Damariscotta This user has validated their user name.

Tue Apr 14 06:40:37 2015

I went and took a look at the offerings, and just at the "collectibles" category. For the activity I saw, they may as well just call the program "ZeroBids". I just don't get it - someone had to ship this low dollar stuff, make up some really crappy listings, and ship it out? Unless the consignors are sending huge amounts of stuff it doesn't seem workable (particularly since consignors with huge amounts of stuff could just cut the middleman).
If someone is starting a pool on when the announcement that this program is ending, I'd be interested in buying some June 2015 dates.

Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

by: sickandtired This user has validated their user name.

Tue Apr 14 08:55:09 2015

I actually hope this program stays around for a bit....would love to see ebay get a taste of the cr*p they have created :)

I think they are opening themselves up to endless grief from consignors and possibly lawsuits if they do not pay out after a sale.

They will have to eat the losses for Snad and supposed non-delivery. The valet will be the one doing the pics, writing the description and packing and mailing the items.  Totally under their care and control so their responsibility.

Perhaps ebay will come up with some ridiculous contract that the consignor is automatically opted into when submitting and item for sale....  akin to the user agreement that removes all rights from users - well actually only from sellers.

CONSIGN WITH EBAY VALET....if we are inaccurate in the description, damage the item in handling, get taken by a dishonest buyer, TOO BAD SO SAD....no payment for you and by the way, your item is gone too :)

MORONS.  

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This user has validated their user name. by: Basset

Tue Apr 14 08:59:33 2015

They incorrectly call it ''Valet''  

Anyone of a certain age who remembers the Jethro of the Beverly Hillbillies knows it should be ''Varlet'' - and I wonder if there is a ''Head Varlet''.  


Got the email, not interested.

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by: a_c_green This user has validated their user name.

Tue Apr 14 11:06:11 2015

> A source told EcommerceBytes that the eBay Valet
> program partnered with a dozen FedEx stores in the
> LA area - customers bring items to the store, which
> then sends the items to a warehouse in Ontario, Calif

*groan*...

Oh, great: now there's an ''eBay Warehouse'' for real...

One of the classic giveaway details of auto and boat sale scammers was that the item for sale was supposedly sealed up in an ''eBay Warehouse'' ready for shipping, and that's why it would be unavailable for inspection before purchase. The buyer was supposed to send in his payment to some escrow agent, after which the item would be shipped to the buyer on approval from the ''warehouse'' for a free 10-day examination. If the buyer ''approved'' the purchase, the escrow agent would send the money to the seller; otherwise a magical car-transporter fairy would swoosh in and take the car or boat back again for free.

We in the old Trust & Safety/SafeHarbor group would cheerfully point out that is no ''eBay Warehouse'' and the entire scenario was ridiculous.

Now that there apparently is (or will be) one or more real warehouses out there, even if they're not storing cars in them, the task of explaining scams to newbies has now gotten just a little bit harder.

Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

by: ajeweler This user has validated their user name.

Tue Apr 14 12:30:34 2015

@iheartjacksparrow
the answer is yes, they do indeed take the funds back!!
I had a friend who sent them a I5s
phone, the good people at e**y set the price of course it was derived from auction price of 50.00, it sold, he received 30.00 (he was expecting at least 150.00 or under the current promotion receive $100.00 gift card from e**y if not sold) however it sold and he received 30.00 approx. 32 days later the funds were removed from paypal account for SNAD buyer clamed the phone did not work, in addition to the funds being charged paypal charged an additional 20.00 for chargeback the phone was ordered sent back, once he received it back the screen was broken, in addition this cost him 20.00 and now phone is not salable at any price same stuff different style !!!!

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by: AC_in_Mich This user has validated their user name.

Tue Apr 14 12:56:19 2015

Thank you, Ina, for finally coming out with a valet-based article.

I wrote to you this past September with these thoughts "So, I am looking into eBay Valet service to see if it is worth it for me

For  those that aren't familiar with the program let me kinda explain as good as I can

You have to have items to sell that are worth at least $40

Valet will send you a box for free or a label - the boxes are 12X12X12

You send the item out to them, they inspect it and put it up on 3 day listings

you get 70% of sold price

Positives

I don't have to spend much time - no research time, no listing time, NO spending time answering bullshit questions, no worries about seller defects, bad Feedback. etc etc

So, let us say I am looking at a $100 item to sell and I've used up up my free listings (all of the facts and figures are of course guesses

I clean, inspect and test the item - 15 minutes
I research selling price on terapeak 10 minutes
I take pictures - 5 minutes
I do listing using sellersourcebook - 10 minutes
I respond to buyer's questions 10 minutes
It sells! I check buyer feedback - 5 minutes
I package it up carefully - 5 to 10 Minutes
I print up shipping label 5 minutes
I go to post office  to ship and get scanned 5 minutes

Figure an hour or longer of my time

Dollarwise

Insertion fee - 0.30
FVF                $10.00
Paypal            $3.20
My Packaging  $1.00
My Shipping Cost  $8.00
Subscription cost to Terapeak and Sellersourcebook  roughly $1.00

Total $23.50

So, I make $77.50 and spend an hour plus aggravations and worries

VALET SERVICE

I spend 10 minutes researching price on terapeak
I spend 15 Minutes cleaning, researching, testing and packaging item

Total time = 25 Minutes

Item sales for $100 I make $70 with no worries. But let's say it goes for $150, I make $105

libertystore is their ebay name 10000 feedback 99.3 score, some minor complaints  (lol I love the one buyer complaining about sales tax being charged on a $10.00 item)

The only other negative I   can think about is turnaround time to get paid. I decide to liist with valet .  Send Item in to be listed on Monday .  They get it Tuesday    They spend the rest of the week researching it.  Goes up for listing following Monday  Sales on the second auction cycle.  Buyer takes two days to pay.  I get money a lil after two weeks of sending it in to them"

UPDATE 4-14-15

Ok, you have to do work to find libertyshop's feedback, it isn't on the listing.  They are still doing good - 99.4& on 21000 feedbacks. Looking at completed listings in computers via http://www.ebay.com/csc/Computers-Tablets-Networking-/58058/m.html?LH_
Complete=1&_ipg=200&_since=15&_sop=3&_ssn=libertystore
they seem to be doing ok.

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by: sickandtired This user has validated their user name.

Tue Apr 14 13:29:20 2015

AC - just browsed items for sale by libertystore and there sure a lot of junky bits listed for under $10 that would never pass the smell test of being worth $40.
If that is the criteria for sending items to them, then the opening price should be $39.99.....that would be logical to me.

I also don't understand how libertystore can order Paypal to take funds back from the original consignor.....that is none of PP's business.  Libertystore is the seller so they should be dinged the money.....  just the same as any regular seller would be.

What kind of behind the scenes, under the table deal was made!!!!

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by: ebayclosed2016 This user has validated their user name.

Tue Apr 14 14:52:47 2015

Joey,

You have their name, address and phone number. I would take action.

Lately I have been telling the scam artists that they will get a refund after they leave feedback. Then I never give them a refund.  

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This user has validated their user name. by: Anonymous Annie

Tue Apr 14 18:03:12 2015

Ina's article says: ''The program is not open to the typical eBay consignment seller. Instead, eBay requires members of its Valet program to be able to list 100,000 listings each month, across all eBay categories, with a physical presence in all major metropolitan hubs in the U.S.''

Wow. That's a lot of merchandise. To whom is eBay marketing this?

I'm afraid I wouldn't qualify.

It seems to me that anyone seller who has the ability to move 100,000 items each month probably doesn't really need this valet service.

I'm just guessing, but considering how much the service costs, a seller with such a high volume would be able to hire, train, and pay employees to do the same things offered by the Valet, and STILL come out ahead.

Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

This user has validated their user name. by: Rexford

Tue Apr 14 19:27:26 2015

Joey says "Now I am stuck with do I provide her the $10.00 back to avoid feedback issues or do I deal with Ebay and hope to God they get it removed?"

NEVER!  Was she foolish to message this through eBay, or did she use your email address to contact you off of eBay?

I'd be telling her to go take a hike.

Perminate Link for eBay Valet Is No Amazon FBA - Do the Numbers Add Up?   eBay Valet Is No Amazon FBA - Do the Numbers Add Up?

by: ebay refugee camp This user has validated their user name.

Tue Apr 14 19:41:05 2015

Will Valet sellers have to conform to the same buyer is always right policy, and what if the USPS takes two weeks to deliver instead of 3 days.
I would say that ebay is not winning the battle and never will until their are changes at the top which include seller retention, and the reversal of insane policies that have driven a wedge between sellers  and buyers.
Instead of admitting his mistakes he introduces more programs, what a laughter.
This is the biggest failure in history, ebay is losing millions every week in lost revenue as honest sellers are making out elsewhere.
I cannot believe that ebay shareholders are that stupid, it is unbelievable what has happened and people are just sitting back watching and doing nothing.



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