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Tue May 10 2016 22:07:19

Could eBay Manipulate Search to Maximize Fees?

By: Reader

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Dear Ina,
I can virtually guarantee that the next so-called "Seller Update" will have major fee hikes. feeBay management and investors have been spoiled by earning 20% gross margins for decades. They don't want the gravy train to stop.

But that the only the beginning of the problem. eBay has been doing stuff since the beginning of the year, quietly starting to train it's sellers to expect less.

Some, as crazyNYdriver and others have pointed out, is putting competitors ads, or should I say MORE competitors ads on your listings page. I say MORE ads, because you already know eBay runs commercial competitor ads right on your listing, but now it has added other sellers ads.

But let me be the first to tell you how insidious and devious their methodology is.

It happens on auction listings and it happens on fixed priced listings. Here is how they do it...

Say you have three people each listing a $100 laptop.

What happened in the past is that one sell for $150, one might sell for $110, and one wouldn't sell. Under this first scenario, feeBay would make $26 in fees: $15 from the Seller A, $11 from Seller B and of course nothing from Seller C.

Now we move on to the second scenario, that is, using the "Best Match" system, which allows selective placement of listings in search results.

eBay can heavily influence and effectively controls what the ending price is.

eBay can place Seller A in favorable positions until the laptop gets a $100 bid, and then effectively drops it from the search results, refusing to give it favorable positioning,

So now, eBay promotes Seller B's laptop, until it too, gets a $100 bid, securing their fee.

The process is then repeated with Seller C a third time until the last laptop gets a $100 bid.

After all three units in our have bids, they simply no longer get quality traffic. Because eBay has made it's fees, and no longer cares.

So what is eBay's total? $30, which is $4 dollars more than it made under the first scenario.

Now $4 dollars doesn't seem like a lot, but it is over 15% more than in the first scenario.

But who loses out? Two out of three sellers loose out under this scenario. Seller A received 33% less return and Seller B received 10% less return. Seller C under this thought experiment did get to sell their item which didn't sell previously, but he could just as easily be Seller A next time. Over the long term, all the sellers are losing out on substantial revenue.

Another aspect of this is that if you list and item at a price that eBay determines will not likely sell, they will simply not promote it. If you login to the site and click on one of your unsold listings, you will see a feeBay providing a "suggested listing price", and that price will be a small percentage of your original starting price.

In our example, a $100 starting bid, might go down to a suggested starting price of just $25.They don't care if you are making money, they simply want it to sell so they get their fee.

This leads to a vicious cycle, where by overall prices are continually and rapidly lowered, leading to what effectively amounts to a Great Depression on eBay. But as long as those fees keep coming in, eBay doesn't care. That's the auction tactic.

The fixed priced tactic is just to give the larger sellers more hits, again using the "Best Match", and push out the little guys. You already see this with the Chinese sellers with listings that have 1000's of sales. What chance do you have?
Ev




Comments (47) | Permalink

Readers Comments

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

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

Tue May 10 23:53:35 2016

"Could eBay Manipulate Search to Maximize Fees?"

eBay is already manipulating search in a desperate attempt to pander to the "Brands" that it hoped would allow it to kick the hoi polloi to the curb. But, it hasn't worked out the way Johnny Ho planned, apparently ...

The eBay executive suite—where the incompetent mingle with the disingenuous, the unscrupulous, the malevolent, the outright criminal, and the just plain stupid. ...

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: pace306 This user has validated their user name.

Tue May 10 23:59:28 2016

I dont put it past eBay to use Best Match to "engineer" sales.

Why? 'cause thats what Cassini was developed for - listing engineering.

People always complain about "listing bugs" ... sorry - there arent any. Cassini's behavior is direct and on purpose.

It was created to shift views and listing positions to beloveds. Always has been that way, always will be that way.

eBay is %101 pay for play and search is not "organic". If they wanted organic - they could have licensed Googles search engine.

I doubt I could prove the OPs experience(s) directly - but nothing would surprise me about how eBay operates.

Lastly - as far as the ads - eBay isnt interested in item sell through - only item LISTINGS - the amount. Thats why - if you read Ina's other column - it starts with "eBay is desperate for inventory" .... no not inventory - listings.

More listings = more eyeballs. More eyeballs = more people eBay can charge advert money to, which = more money for eBay.

VERO has always been for sale, Deal of the Day is and always was for sale, listing positions have always been for sale - even Wenigs desk is for sale - his integrity was sold a long time ago though if you were looking for it!

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: Rexford

Wed May 11 06:44:20 2016

MANIPULATION!  It  has been going on for years. It's unethical and shameless. Driven by greed.

If only we could get all of those rabid ambulance chasing attorneys to redirect their energies.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: Owen This user has validated their user name.

Wed May 11 10:51:06 2016

I'm also thinking that listings are manipulated to show them to the farthest shipping point, to maximize shipping revenue. A vast majority of mine ship to California. I am in NY. I get closer ones once in a while, but not very often.

eBay is no longer a site which is for sellers. It is a site only for eBay's revenue stream. It is totally manipulated for that goal.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: toolguy

Wed May 11 11:15:54 2016

@ OP
I run fixed price so this doesn't affect my items.

@ Owen

I ship US Priority Flat Rate so it does not affect my listings.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: JQ This user has validated their user name.

Wed May 11 13:26:46 2016

Two years ago I read about an eBay policy similar to the one described above.

The source claimed to be a former eBay employee. I am skeptical, but . . .

According to this report eBay would cut back on the exposure given to auction listings once they had received at least one bid. This would allow them to earn final value fees, making eBay happy, and make auction listings more likely to end with only one or a few bids, which would make their shoppers happy. The sellers would be unhappy that their auctions were ending with low bids, but eBay could just throw up their hands and blame the result on the market or whatever, while at the same time encouraging the seller to transition to opening a store stocked with fixed price listings, the selling method eBay preferred be used.

Just my experience, I used to run auction listings pretty regularly until around 2013. At that point my auction listings started to receive about half the views they had in the past and most often end with no bidders, or one bidder. I estimate about 1 in 20 of my auction listings brought in multiple bidders. So I have all but completely abandoned the auction format. This really did not bother me much as I always preferred fixed price listings, but my own experience seemed to reinforce the description above.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: Rexford

Wed May 11 13:34:12 2016

JQ, I recently experimented with an auction (it has been sometime since I listed an auction) and I will never do it again. A very popular item that was likely mostly invisible to potential bidders.  I had two bids and ended up giving it away.  It was clear to me that it had no visibility. Never, never again.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: bitbybit

Wed May 11 13:58:13 2016

I have always suspected ebay of hiding auction listings once an auction gets a bid. Remember bidding wars? Sellers then started listing auctions at a higher price. So since auctions were set at a price sellers were willing to accept if receiving one bid, sellers ''decided'' to go fixed price and open up stores. Buyers lost interest in the no frills and thrills auctions.  So Meg and JD ruined the big draw or golden goose to bring buyers to eBay. All of their manipulations also ruined the browse feature. As it stands now ebay is no longer relevant. How many buyers will continue to shop on eBay if they are bombarded by advertising, forced into items ebay wants them to see and not what they are searching for, and then taken off ebay with a sponsered ad?

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: Owen This user has validated their user name.

Wed May 11 14:50:01 2016

I find the pages slow to load with all the advertising on them. That is discouraging when you just want to browse around, every time a new page loads, it takes some time.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: Rexford

Wed May 11 15:19:31 2016

babybit says "As it stands now ebay is no longer relevant."

True fact.  We are now doing more business on both Etsy and eCrater than eBay now. Who would have ever thought that could happen.

Meg, John and now Wenig know how to kill a site.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: FeelingFroggy This user has validated their user name.

Wed May 11 17:37:49 2016

Is the grass green?

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: thebobman This user has validated their user name.

Thu May 12 00:42:17 2016

If I can get $75 for an item with buy it now, I'd be lucky to get $50 on an auction.

I see a lot of sellers start an auction at say $45, when the going price on an item is $40-$65. No one ever bids and it get relisted 5-7 times. what is even the point of making it an auction anymore. Either start it really low, or just buy-it-now.

Here's my perspective as a buyer. There are a certain type of item I buy to resell. Once a week, I search for that type of item, fire of a bunch of bids and walk away. I win some, I lose some, but I don't put a lot of effort into it.

But here is how I bid:
5 pack of items, I can sell for $75 to $100 individually. Starting bid $10 + $5 shipping.

I fire off a bid of about $25 and walk.

Same items, starting bid, $25 + $4 shipping

I look at it, and pass.

Why would I turn down one even though I might end up paying the same price? The first I might get for $15, maybe $20, worst case, $30. But the second one, the starting bid is the max I'd be willing to pay. Theres no chance I might get a good deal on it, I might as well just do a buy-it-now.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: Moonwishes This user has validated their user name.
Web Site

Thu May 12 00:47:29 2016

The sad thing is, in a way that is what Google is doing now. They have been manipulating google shopping for years now, with only showing items that have paid for exposure. Do you think the normal public who don't sell on line realize that there may be anywhere from 2-10 times more items available if google would have shown them all? They also seem to be manipulating their organic search as well, and now everything for sale that is new has to have a UPC. All the venues want those UPCs but don't seem to understand that some companies reused their UPC numbers, and some UPCs numbers in the early days were used to indicate the price, so maybe 50 items had the same UPC. But google, ebay, amazon, etc. in their great wisdom don't seem to understand this and it makes it hard for those of us selling new old stock.

Thankfully, even if we don't have the upc eCRATER will lets us list there, however we may not get promoted my google, but we can at least have things up for sales and at the moment, BING doesn't seem to care if we are using UPCs or not.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: Bill

Thu May 12 01:19:07 2016

AS I stated before I have been running a statistical analysis of 3 different auction sites that have a large following through the years for the items I put up. Phase one on eBay is done and out of the 10 listings that I ran for 7 days I had views as high as 13 and as low as 1. I have started phase two on eBay with 10 new listings of different items from the first phase.
I started phase one on site # 2 with the same items that were on eBay for phase one with the same titles, descriptions and listing category. They have been listed on site 2 for a day and a half and so far I have 13 views as a low with 19 views as a high.

eBay is being blown away in a day and a half. It is clearly showing that eBay does not have the traffic any more.
I am not going to reveal what it is being listed until the analysis is over in about a month. I will let everyone know when the spread sheet is all done and I will have Ina publish it.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: Marie

Thu May 12 01:23:14 2016

Speaking as a buyer, I never use Best Match.  While I'm not at all disagreeing that Ebay manipulates the searches, heck even Ebay will tell you they do that.  But I'm not sure that Best match is what the majority of buyers search by.

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: comet This user has validated their user name.

Thu May 12 02:07:24 2016

The only time I "use"  Best Match  is when there are only a few items showing in a Search  and I am going to pick the cheapest one anyway and can do it by eye--say---45 items in a Search.   For ANYTHING ELSE---it is going to be Price plus Shipping LOWEST.  Not fooled  by "free shipping"  hype.  Not liking the "new"  lack of ability to Search by DISTANCE---I can only "see"  2000 miles and since I am in NY I thus LOSE one third of the US.  One-third of the US sellers are NOT visible to me! Unless I want to see everything  on the planet--and not be able to winnow down.  

When I SELL--I should say IF I am ALLOWED to sell---I set my prices fairly and often am the lowest;  often BEFORE I see those annoying "We suggest you start your auction at 99 Cents!!!"---or "We suggest you set the price between $9.99  and $18.99" and I am already AT $9.99---And my items are STILL NOT SHOWN and STILL NOT SELLING.  

Search manipulation?  Did the sun rise this morning?  

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: Tiffee Jasso This user has validated their user name.

Thu May 12 05:00:23 2016

My observation has been in the shipping area. A great percentage of my heavy glass or metal items (I sell vintage) that use calculated shipping sell to Connecticut, Rhode Island, New Jersey, etc. I live in California. That is like Hawaii and Alaska postage costs for those who live on the east coast. As you well know Ebay gets ten percent on the shipping costs.
As for those suggestions that you change prices on vintage, or sets, they make no sense. I would really like a way to contact who ever is making such dumb suggestions and set them straight. I mean, how would Ebay like sellers to post suggestions of how they need to lower their fees  because so and so only charges such and such. That could get interesting.  

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: toolguy

Thu May 12 09:08:53 2016

My items can always be seen with a simple ebay search.

In fact most of my items sell the 1st time around.

I average about 150 listings at any time and sell about 5 items per day.

Your ebay selling or buying experience will be determined by what you are selling or buying.

My average customer is career orientated person that needs these tools to make a living.

I have very few non payers.

I've had 1 return in the last 12 months!

Ebay's Cassini is working well for me. . .

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

by: whipnet This user has validated their user name.

Thu May 12 09:22:18 2016

Someone here always said, "If you item doesn't sell, raise the price"  I always make sure to sell my items at the lowest available on ebay (as long as profit was still involved) but notice in search that the higher priced items were on top.  higher price = more fee $$ for eBay.  I have raised my prices on some things and sure enough they sold.

*

Could eBay Manipulate Search to Maximize Fees?   Could eBay Manipulate Search to Maximize Fees?

This user has validated their user name. by: toolguy

Thu May 12 09:26:55 2016

eBay's mobile app

CHA CHING

I never get tired of hearing that sound and in fact there it goes again ~ LOL

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