eBay Announces New Checkout

eBay announced today a new checkout flow for Paypal payments.  The response from the community has not been positive as it apparently leaves their Paypal account open at the end, among other glitches.  There are also reports of the order showing the shipping for each item, rather than one shipping charge for the entire order.

 You can read the official eBay announcement here.

Reviewing the screenshots posted by Paypal on the Checkout Forum I am happy to see on the checkout page an explanation of what an echeck is, with an estimated clearing date, and a note that it may delay shipping.  However, there have been problems reported with trying to use other funding methods and being automatically moved to an echeck instead.
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The eBay Feedback Theory – Busted

Back when Pierre first conceived the eBay idea, he decided that the community should police itself. He did not have time to mediate disputes between buyers and sellers, so he instituted “feedback.” The concept was that buyers and sellers would leave each other honest feedback, which would weed out the bad community members.

New ebayers could easily see the feedback of a seller and decide whether or not to buy from this seller. The theory was if the seller had a lot of negative feedback, the buyers would go elsewhere to bid. In other words, Pierre made the assumption that humans are able to look out for themselves.

It is my opinion this theory has been proven wrong over and over again. One only has to have seen the feedback for the now infamous seller “Bargainland” to know that people cannot look out for themselves. With feedback at 90% and many times lower, they continued to sell 100’s of items a day. Burned buyers would post to the eBay boards regularly whining that they got “taken” by Bargainland. Seasoned eBayers would ask these buyers why they didn’t heed the feedback? It’s right there, pasted in the auction, why didn’t you heed it?

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Ok Ebay, It’s Time to Confess! Is It Really The Sellers?

This past year many long time Ebay sellers moved the bulk of their business to Amazon, and became multi-channel sellers. During the testing of “best match”, and “finding 2.0″, there were many sellers with a huge drop in sell through rates that lasted for a week or more. The only way to continue to sell on Ebay was to find another avenue to make sales. The avenue of choice for many was Amazon.

As you can see from my last post, Amazon is now becoming the number one place for ecommerce shoppers. So, I have to ask if all the problems on Ebay are really the fault of the sellers? Because after last week, it seems they are blaming the Ebay sellers for the poor buying experience. But, since those same sellers are making Amazon a fortune, how can it be the sellers fault?

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Why Ebay Sellers Should Check Out Amazon’s Marketplace

I was not one of the top 200 Ebay sellers invited to the Ebay Ecommerce Summit last week where Ebay announced the changes to Fees, Search, and Feedback. I was one of the lower volume Ebay sellers on the sidelines at home waiting to hear the long awaited announcements about fee reductions. As we all know now, the fee changes will probably hurt more Ebay sellers than they help. The changes overall made me ask myself how the new CEO designate of Ebay, Mr. John Donahoe, can make changes to Ebay’s platform that blatantly copy the Amazon platform without feeling a bit unimaginative. Mr. Donahoe has been at Ebay since March 2005. If you would like to check out his salary on Forbes Mag. Is Ebay going to become Amazon Lite?

The new final value fees (FVFs) for Ebay stores are just slightly less than Amazon’s FVFs are now. Not allowing sellers to leave negative feedback for buyers is similar to the Amazon feedback system. The star rating system is similar to the Amazon seller rating system. Amazon already has a relevance based customer search that sounds like the “finding experience” Mr. Donahoe has been working on, and which is scheduled to be rolled out to Ebay this year. My guess is it is time for us all to examine the Amazon sellers marketplace because the new CEO-designate of Ebay seems to want the Ebay buyers experience to be just like the Amazon buyers experience, and will probably continue to imitate Amazon features.

Jennie

Looking at eBays DSR (Detailed Seller Rating), part 2

written by Steve Grossberg, IMA President

Back in September 2007 I posted to this blog, a piece titled “Looking at eBay’s DSR (Detailed Seller Ratings), Click Here to Read Part 1.

Yesterday I did a podcast interview with Ina Steiner from AuctionBytes, Click Here to Listen To Interview Some of the points and more I am going to be talking about below are covered in the interview. I encourage everyone to listen to the interview.

Okay for starters ebay says 15% of sellers currently qualify for the 4.8 DSR bonus. My question is what percent of the ebay listings or GMV does that represent. This has yet to be answered by my best guess is somewhere less then 2%. Of the top 100 seller date as referenced in post 1, there is only 1 of the top 100 USA based sellers according to the Nortica 500 that has a 4.8 DSR is shipping and handling. There was another 19 who had 4.6 or better. Ebay stated over and over how 66% of sellers have a 4.6 or better but again what percent of listings and GMV is this? Certainly it is not 66%, so always do you own due diligence. As the old saying goes trust but confirm.

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Is It Wise to Just Wait & See With Ebay?

This is a question that most full time Ebay sellers will be asking themselves over the next month or two. The “best match” finding 2.0 changes to Ebay’s default search in March 08, and the May 08 removal of a sellers “mutual feedback” privileges will cause unknown changes to many Ebay sellers bottom lines. (I am leaving out fee changes because they can be calculated.) I know of one seller locally who has already closed his doors, and started selling off his inventory. He felt it was too big a gamble with three small children to continue counting on Ebay as his sole source of income. Buy out companies have been quick to take most of his stock of brand new Budweiser mugs off his hands.

If you use Ebay as a part time source of income, you will probably be OK waiting to see how your income changes. For sellers who have made a full time commitment of resources and time to build a business on Ebay, the wait and see approach will probably not work. I personally have two building leases, and several buyers who depend on me. Not to mention year long advertising contracts that cost quite a bit each month. For me, waiting to see what happens to my Ebay income isn’t going to work very well. I have to plan for the worst, and hope for the best.

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eBay Fee Changes… Look At Your Own Numbers!

written by Steve Grossberg

Anyone who lowers shipping in my own opinion, is foolish. Look at your own economics. Remember if you obtain the 4.8 Detailed Seller Rating on all 4 you get back 15% of your FVF. Look at me for example.

Items listed 40,000
Items Sold = 8,000
ASP = $14

So $14 x 1.23 FVF x 8000 items = $9800 FVF paid

$9800 FVF paid x 15% discount = $1470

$1470 savings divided by 8000 items = 19 cents per item

So in essence I have to say to myself will a 19 cent reduction in my shipping and handling move my DSR from 4.4 to 4.8? The answer is hell no it will not. Even if it did the ebay discount is not guaranteed as it is a 30 day rolling average and some months I may get it and some not.

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Welcome To The New Ebay Neighborhood. Will you be my Friend?

Last month I signed up as a member of the Better Business Bureau (BBB). One of the reasons I joined is they allow you to use their emblem on your website. They also don’t let any random person file a complaint against you without documentation of a transaction, and without giving the store owner a chance to refute the complaint.

Why do they do this? Because they do not want to hurt a persons business. A lot of investment goes into a business. Especially a true solid physical store front. You have contracts that last for years with other vendors. Security systems, utilities, advertising, product, etc. If your business goes under, a lot of other businesses are affected. In addition, if someone publishes false negative information about you for the public to read, they could be sued for defamation of character.

Why would I make these comparisons? In May 2008 Ebay plans to let anyone post negative information about my Ebay business without any regard to how it may affect that business. As far as I know, I will be given no chance to refute any negative information that a buyer leaves me, and that negative information will remain there for anyone to read for 12 months.

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The eBay Flip Flop

Wasn’t it just 2 years ago that eBay wanted to bring back the “vibrancy” to core by encouraging 99 cent starting bids? In 2006 they decreased the listing fee for the 99 cent starting bid while increasing the costs for eBay store listings. eBay felt the need to go back to their roots – the auction format.

So it was with shock that I read the new fee structure. eBay’s 99 cent auction sellers are no longer the darlings of eBay. They have been hit the hardest by the new fee structure. Because the traditional 99 cent auction sellers generally have a very high sell through rate, they are being hit hardest by the large increase in Final Value Fees.  Although their insertion fee has decreased by 5 cents it’s nowhere large enough to make up for the 3.5% increase on the backend.

Yet Fixed Price sellers, who generally have a low sell through rate, have seen their insertion fees decrease greatly, especially the majority who use gallery.  They still pay the increased FVF, but the decreased insertion fees will more than make up for the increase in FVF’s for those seller with sell through rates below 50%.

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Ebay ’08’ & 3 Stages of Major Change! Will Your Business Survive?

This week Ebay announced several major changes to their platform that will go into effect over the next 5 months. The first change starts February 20th and will affect Ebay fees. The second change comes in March 08 when ebay makes “best match” the default search, which I beleive includes “finding 2.0″. The third change is planned for May 08 when Ebay will restrict sellers mutual feedback privileges.

It is impossible to tell how the overall combination of changes will have affected the majority of Ebay sellers 6 months from now, but some guesses can be made about the impact of each individual change and anyone who is concerned will find many more discussions on the topics on the IMA member forum. The initial opinion of some IMA members is that the fee increases will cause a 0-25% increase in fees. Twelve members have stated their overall fees will decrease. The sellers who estimate a decrease are those with a lower sell through rate (10-40% sell through), and a typical selling price between $1.00 to $25.00. Those hardest hit on fee increases typically have a high sell through rate, and higher average sale price. The Auctionbytes blog has a very good article where numbers show everyone’s fees will increase.

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