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?