eBay Stores: What's Your Strategy to Cope with Fee Hike?

[Ina]

In light of eBay's store fee-hike that goes into effect August 22, 2006, please share your thoughts on your strategies going forward and what you think the implications are of eBay's "rebalancing the marketplace" message.

Constructive advice welcomed, thanks.
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Ina Steiner, AuctionBytes.com

[Reen]

I don't think the sellers will like the sound of that word!

According to a report I read this past week........ they like the sound of the words "Live Deal" better.

Reen

[es]

a couple of possibilities:

1. open a pro store and refer your customers there, which is allowed by eBay.
2. along the same lines, open a store at half.com

just a thought,

es

[dixielady060303]

There's a huge Discussion going on at Ebay Community Discussion Groups, Soapbox, right now about this. Most of we store owners have called for a two day protest against a 500% rate hike in store listing fees. We are asking that no one bid, buy, or list anything on Ebay from Black Monday, August 21 thru August 22, when the latest rate hikes go into effective. Please help us spread the word. Closing our stores won't help, Ebay CEO has stated that is what they want! Any suggestions as to how we can reach as many people who are interested in Ebay as possible, would be welcome! Dixie[/b]
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Ebay selling

[gazlannathai]

What I've been proposing on the UK site (as a PowerSeller) is as follows -

The announcement there has clarified that all listings placed before the fee change date will carry the current ILF and FVF fees, not the new fees - check this for your individual eBay country sites.

Therefore the strategy is to allow existing store listings to lapse, cancelling GTC listings before they renew in a way that would roll them past 21 Aug.

Until 21 Aug, prepare the fullest possible list of SIF format listings on 90 day duration (gallery fee for 90-day is same as 30-day on UK) and list them all during the 48 hours prior to midnight 21 Aug.

This means they will then go in at the old GBP 0.03 ILF instead of the new tiered structure, and will be in place for the whole lead up period to the final Christmas buying frenzy in mid-November to mid December. In this way, those 90-day listings should get some reasonable pre-frenzy Christmas trade during October and early November.

It will also allow more breathing space for planning a longer term strategy and for evaluating cost-sell models with regard to using eBay under the new fee scheme, as well as for evaluating alternatives. It will also give time for the redesign, expansion, and marketing of our own website, reducing the reliance on eBay.

What we have seen as a knee-jerk, is a migration of the "immediate action" segment from eBay to eBid.tv - many disgruntled eBay sellers immediately opting for gold lifetime memberships and launching immediately into opening stores on the smaller site. Hundreds have so far done so since the announcement, including some very big inventoried sellers. Many are openly discussing that on eBay they are openly spoiling eBay's image and pimping for others to join them on eBid - forums, listings, and after auction email templates are being blitzed with messages about the alternative "Free to List, Free to Sell" site.

There has been a resurgence on eBid of the user-marketing movement, with ideas such as including migration leaflets with eBay sales packages, offering discount vouchers if buyers follow the sellers to eBid, and so on.

Personally I am still evaluating - it's likely I'll close the store for my specialty Mysta-Incense ID and only run the ID by taking advantage of cheap listing days (with no other regular listings), and re-open the store under the same ID on eBid. For my main GazLanNaThai ID, I'll probably cut back the eBay store and migrate some ranges to our eBid store there, maintaining a strong eBay core presence only on cheap listing days - basically reverting to the strategy of 2-3 years ago before opening any eBay stores.

I'll also be making heavier use of the free eBay sites in Malaysia, Hong Kong etc, but that will involve greater effort of listing and admin etc due to their lack of upload tools and stores functions.

The only way to communicate to eBay is by hitting their income, but it should not be done in a way that "cuts off your nose to spite your face."

Gaz
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Selling as "GazLanNaThai" at
www.ebay.co.uk www.ebid.co.uk www.qxl.com www.thinkauctions.co.uk
and others.
>> Search the name - you'll be surprised what you find <<

[Tradguy]

1 - I will reduce the number of store items from my current 500 or so down to about 50. It will be a sampling of what I sell, and my store header will state this and direct them to my website.

2 - I will redesign all of my listing templates to push buyers to my about me page - which will push them hard to my website for "more selection and better prices".

3 - I will increase my adwords budget for my website.

4 - I will run very few and specially designed auctions every week to drive buyers to my website.

5 - I will send out an announcement of my move to every single ebay buyer who has ever purchased anything from me since 1999, and I will include a discount coupon.

What I will NOT do:

1 - I will NOT just cancel my ebay store - it's still a LOT cheaper than running auctions - and Ebay remains a viable source of buyers. I see ebay in exactly the same way I see adwords - I am paying to advertise what I sell.

2 - I will NOT move over to some other 3rd party site without any buyers. Been there, done that - many times. Not worth the time and effort - no way, no how.


Bottomline is that while I've love to just tell Ebay where to stick it, I am first and foremost, an online seller. My goal is not to "make a point" or display my anger with Ebay. My goal is to keep selling online, and do so profitably. I do this for a living.

So I take a deep breath. I readjust my strategies.

I think about one thing that makes me smile every time I think about it. It is the knowledge that Ebay has no customer loyalty. People sell and buy there because of the traffic, and IN SPITE OF the management.

The door is wide open for a real "alternative".

The greater the need, the wider the door. There is an entire world of competition working every day to figure out how to get thru that door. Now it's just a matter of time.

[gottaridebikes]

IT'S NOT ABOUT "CLUTTER" IN STORES.
EBay is throwing this out as an excuse, and while there may be some truth to it, it's NOT their reason. (Truth be known, they probably benefit much more from the extra items since it really means that you can find IT on eBay.)
IT'S ABOUT THE STOCK PRICE. IT'S ABOUT CORE LISTING TOTALS (which is ALL about the stock price).

Think back.
What did they say when SIS was rolled back? They did it because of "buyer confusion"? Another BS reason to hide their real one - THE STOCK PRICE (FALLING CORE LISTINGS)
Then, as now, they became unhappy with the Core listing totals, and they made these changes.

When SIS rolled out, stores because effective - EXTREMELY so. They were practically as good as Core listings. They were also MUCH cheaper! Sellers could post items there and end up paying a lower percentage of their sales in fees. Many sellers did so, and the number of Stores listings jumped dramatically, while Core listings plummeted.
EBay keeps VERY close track of the Core listing totals, and major alarm bells go off when it falls below a certain level. If it does, then they can't meet their targets and the stock tanks. This usually causes them to have a $.10 listing day (now $.20) to bump the totals back up. During SIS, the metric became SO bad that they had two listing days CONSECUTIVELY (a week apart), which was unprecedented! When this happened, I predicted that SIS would die quickly, and a week later eBay did just that.

SIS died not because of "buyer confusion" (they may have been some, but there was even more "buyer elation" since many could find what they were looking for easier!), but they were trying to raise the Core listing totals. Take away the new Store marketing advantage, they reasoned, and people would go back to Core.
Funny thing, though - they didn't. Partly due to inertia, partly because they found Stores to STILL work, partly because of the less work in Stores, and a good deal because Core had become less effective and more expensive, Core listings remained low. The slide actually CONTINUED into April until Core listing numbers fell to 2 year lows! (How can they explain this to Wall St and still keep their lofty PE ratio?) Something DRASTIC had to be done to stop this! Killing Stores was the choice made. They decided to make Store listings much more expensive in hopes of driving many of those listings back to Core.
Again, it has NOTHING to do with "clutter". EBay would be HAPPY to keep those items if Core listings would rise. Further, if "clutter" was truly the problem, they wouldn't have allowed an increase in identical Core listings from 10 to 15. (Ever try to find a unique listing sandwiched in between scads of identical listings from 3 or 4 sellers? Now THAT'S clutter!) However, since this clutter increases Core listing totals, it's GOOD clutter!
Instead, this becomes the whipping boy - the straw man that they throw out to the public to explain their reasoning. Now, sellers are arguing over business models, who killed the golden goose, whether clutter is good or bad - EVERYTHING EXCEPT WHAT EBAY IS REALLY DOING. Like a good magician, they keep the sellers looking at their hands instead of what they are actually up to.

Will this work? Personally, I doubt it. For many sellers, Core just doesn't work like it use to. It's performance measured in sell-though, page views, and ASPs have been declining for a long time, and at the same time prices continue to rise (either through official price hikes or "tweaks" to stop sellers from recouping some of their fees after a listing has been posted). The biggest reason for Core's flagging numbers has been it's poor performance compared to it's cost. EBay could have done something to shore this up, such as lower fees (explain THAT to Wall St!) Iinstead they chose to negatively affect Stores. The problem that this has is simple - even though Stores will be less attractive, Core will not be more attractive. It will not provide a better return than it did before. It will not become more cost effective and less time consuming than it was previously.
In short, the major beneficiary of this change will be Google Base, Amazon, and website hosting companies. Already sellers have been looking into these in droves. Some eBay sellers will benefit, but the site as a whole will suffer. Their tail will be much less long, and this will give buyers another reason to look elsewhere.

EBay is at a crossroads. Statements like "fraud is .01%" or even "this will only be a 6% increase" are increasingly seen for what they are - lying with statistics - and no longer reassure the marketplace. Fraud is rising as they aggressively court overseas sellers, and with it, buyer confidence continues to decline. As a result, sales performance continues to decline, even while fees increase. To top it all, eBay is no longer the only store in town. Sellers now have a wide choice of alternate markets for their goods. How will they respond? If they make long-needed changes such as REAL anti-fraud efforts and buyer confidence programs, the ship might well be righted. However, since cracking down on fakes would seriously impact their listing totals (one recent report estimated these to account for 20% of eBay's total items!), it is highly unlikely that they will take the short term hit that this would entail. Instead, look for them to continue re-arranging deck chairs and re-assuring the marketplace while the water continues to rise. They are still at the place where the ship can be righted, but the time left to do so is becoming increasingly short.

[mrsmarilyn]

i am fortunate--i diversified in march, so this is only a 20% hit on revenues for me. But I am still very angry. As a 10 year ebay user, sometimes powerseller, with 99.9% + feedback, this is the ultimate betrayal. Bad as the fees are (and they are HUGE for media sellers, which is what i do--my fees would jump 500%), the timing is what kills me. eBay has always had an unwritten rule about **not messing with the site from august to december**, the all important holiday selling season when most of us make our revenue for the year. Doing this now, with 30 days notice, is just the biggest kick in the teeth.

I haven't decided if i will close my store all together or pare inventory down to 1/3 of it's current level. What i WON'T be doing is running more auctions. The sell thru rate on auctions is abysmal, less than 40%. eBay makes money from listings, not sales. It doesn't take a genius to see why they are doing this (more listings=more revenue) but it's stupid. If they really wanted more turnover, PUT STORE BACK IN SEARCH. My ebay store sales TRIPLED in the 6 weeks that stores were in main ebay search. Those were some nice final value fees for them. now they won't have the listing fees or the final value fees. (amazon will).

ebay offering half as a sop to media sellers is an insult. First, many ISBN books are not in the half catalog. Second, no pre-ISBN books can be sold there (much of my inventory is pre-ISBN). Third, half.com customer service is LOUSY. My own current personal example: I purchased a book on half on May 28th. Never recieved it. Filed a claim the first allowable date, June 20th. Was told I had to wait 30 days for the claim to be resolved. We're talking almost 60 days out. This is a DIRECT violation of FTC Law that states a mail order seller has 30 days to produce the goods or your money back, unless you agree to wait longer (which I most assuredly did not). When I suggested to half that i might just do a chargeback, I recieved a not-very-veiled threat that half will suspend from buying or selling anyone who does a chargeback on half.com! (I notice that they don't do that on paypal!) So i was threatened by half if i chose to excercise my consumer rights (a violation of MC and Visa TOS). To date, July 23rd, I still don't have my book OR my money. And they want me to put my business on half and send customers there? I don't think so.

Plus, the concept of somehow they can handle all the listings on half but not in ebay stores from an expense point of view is a joke. What, are the servers on half cheaper than ebay? It's idiocy.

So, like many media sellers, I'll be selling elsewhere. For me that means ramping up marketing campaigns to drive my customers away from my ebay store and to my Zshop or other selling venue. (Up to know, my url pointed directly to my ebay store).

It's sad, really. They had a lot of choices here. THey made entirely the wrong one. Stockholders should be calling for Meg Whitman's head on a platter. I predict the stock will tank by Christmas, solely on the loss of store revenues.
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Marilyn

[mrsmarilyn]

[zenbreeze]

It was completely and totally the wrong thing to do and is unjustifiable. We pay a monthly fee for store listings, in exchange for a minimal fee per item. The new rate is 3 times as high. In my case, that would have meant spending an additional $9 a month for the store listings, instead of $3. It already costs much, much more to have an eBay store than a website. This is ridiculous.

The reason I (and so many others) quit listing as many auction items on eBay is because they quit selling. This is especially true of the Art category. Many of us have been holding onto our stores, waiting for sales to improve.

There have been several factors in why sales have declined, none of which eBay has addressed. Instead, they raise store prices.

It's like when the government doesn't have income tax money coming in because there are no jobs, so they raise the sales tax rate.

eBay should analyze why there are less auction listings and fix the core issues there.

As for what I intend to do, I have decided to move off eBay. I used to be a powerseller but the bottom fell out of the art category for us true, original artists (as opposed to the .01 sweatshop art flooding the category). This is the final straw.

I was going to close my store at the end of this month but I have a NPB, which eBay also will not address in a timely manner. So I will have a $12 FVF that I cannot get refunded until next month (despite the fact that I have an email from the buyer sent through the eBay message system that she will not pay). I will leave my store open an extra month to offset that.

Laura
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Visit my online gallery at http://zenbreeze.com
Zen Breeze Art Gallery...Fine Art to Refresh the Soul

[groovygranny]

I was going to re-open a store - I will not be doing that now.

eBay needs to figure out exactly what they want. They may be able to place some of the blame for the increase in Store Listings on their big push of eBay Express.

I suppose in a few years, eBay Express may go the way of the stores as well if eBay's bottom line and stock share price doesn't increase.

Why bother with eBay Express if they intended to discourage use of stores at all?

[ebayvet]

In a few months I will be with ebay 10 years, so I have some experience with the site. It was ebay that forced me to change my model and move into the stores a couple of years ago. I sold a lot of items through half and some through ebay, but then they started to mess with half (by putting 1 cent listings from ebay in half, even though postage costs were very high) and then finally they announced they were closing half. Once that happened, I figured I better find a better way, and I did. Ebay stores went down from 5 cents to 2 cents per listing, and it made sense. My business increased a lot, and I have done well. After ebay increased the FVF to 8% on store items, I thought the writing was on the wall and moved a lot of my business to other sites that are not ebay. I'm only 40% on ebay now instead of 95%, but 40% is too high. Now, ebay is forcing me to change my business plan again...Dang, I'm getting tired of my business plan changing by stupid bonehead decisions overpaid execs make. I figure I could survive this increase, as I've actually lowered my acquisition cost of materials. However, it is not this increase I am worried about, it is the NEXT increase. I see auctions going to 10% FVF, because in the real world, 10% is actually a reasonable fee. Also, I expect to see 10 cents store listings for the cheap stuff. Why, it's only a nickel. I will NOT leave ebay. For the short term, I am going to reduce my store inventory by 20% or more. In the medium term, I am signing up with yahoo for a $100 yahoo store. It is going to take a LOT of work to get this going, because with ebay I just use UPC codes. They provide the description and picture. With yahoo, it will be all me, that is a LOT of work. However, once I am up and running, it will be worth it. I figure just with my store alone I would be paying $1000 a month to ebay, but with yahoo that would be more like $160. I do a great job of getting repeat business, so my vision right now is to have an ebay store with 500-1000 items listed, and run 50 auctions a week to get customers. Once I get those customers, I will work as HARD as I can to keep them and take them off ebay

[HollywoodCatLady]

This is outrageous, especially coming not-too-long after the last increases in both monthly store rental and final value fees.

Apparently eBay is not satisfied with their multi-billion dollar income and needs to stick to store owners yet again.

Because I sell to a very specialized audience, I will have to watch very closely to see if income warrants the increased fees.

[rtccccmg]

I closed my store immediately. I have been on Ebay for many many years and have watched the changes happening - none of which were good for the seller and wondered what the next move was going to be.

Since I have been watching, I was ready. I have an excellent website with a shopping cart that is fully loaded. I haven't spent much time or money on driving more customers to my site, but the money I will save by not having an Ebay store will more than pay for traffic generation.

It's a pretty sad state of affairs when powersellers who have been with Ebay for years are finally calling it quits. I will do live auctions through this Christmas season and then be totally done.

I can't see it getting any better, it never has, but I do like being on Ebay and remember the good old days when I could actually make decent money selling on Ebay before they got so greedy.

I am on other online auctions and they are more or less a waste of time and money. I do sell on half.com but that's Ebay, too.

[Blazes]

Some of us have chosen to use a bit of comic relief as an outlet for our frustrations. Do a search on eBay for the keywords "fee hike".
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Regards,
Rebal

http://stores.ebay.com/Blazes-Emporium?refid=store