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

[es]

clarification: BEFORE the sale is completed...

you can direct your customers to your pro store AFTER the sale to continue shopping in your pro store.

es

[vintgebydesin49]

I suppose I represent a different type of seller than most of those who have commented on this subject (eBay Stores fee hike). I sell my own, handmade, jewelry designs on eBay; I am not alone - there are a number of artisans in various areas who do the same. I've had an eBay Store for about 4 years.

Many of us find the eBay Store a necessity, if we are to sell on eBay at all. About a third of my items fall into the $50.00 to $200.00 range; the rest are higher priced than that, ranging up to around $2000.00.

Yes, some of the higher priced items do sit in our Stores for some time, but they are certainly not "junk," nor are they "obscure." They're just expensive items - and the market for expensive items is always limited. For my purposes, having a venue where the more expensive items could be seen, without having to go to great expense, was the entire point of having an eBay Store.

I carry only about 50 items in the Store at any given time so the listing fee increase is more-or-less irrelevant to me, but because of the prices I charge, the FVF fee increases will hurt. However, the FVF increase certainly isn't going to drive me to start listing at "CORE" auction more frequently, either. There's no way I could afford it. Check out the completed jewelry auctions sometime - you'll see that very few things sell on a first run (or second or third, etc.).

I generally run a few "CORE" auctions (always BIN with Best Offer) to attract buyers to the store, and buy the occasional "Featured" auction (it's the only one where I use the regular auction format so the ad will be sure to run the full 10 days) to attract even more attention. When I buy a "Featured" ad, I always use a design that incorporates either a very popular gem, such as pink tourmaline, or I use a design that incorporates as many different gem types as possible so the ad will show up in an optimum number of searches.

My sale strategy won't change much at all after the fee hike goes into effect, except that I'll run fewer "Core" auctions - not to punish eBay, but just because that's how the numbers work out for me. I have no intention of closing my eBay Store until I am established elsewhere, and I'll deal with whatever they throw at me until then, unless my numbers tell me to leave.

However, I do have a few things to say about the behavior of eBay Management:

1. eBay did not include the Stores in general searches long enough to to make any kind of legitimate analysis of the long-term effects of said searches on their revenues. I think they needed a quick influx of cash, and intentionally induced a lot of people to open eBay Stores with an enticing Search base that eBay management had no intention of continuing beyond the immediate goal of quick cash for eBay from the new store subscriptions.

2. eBay obviously makes most of its money on the listing fees for unsold CORE listings that are relisted time and time again. Look at the completed listings in any category and you'll find that the overall "sell-through" rate for eBay on the whole is very low. If every CORE item listed sold on the first run, I'm sure the revenue from the FVF fees from just those listings could not begin to approach what they make on Insertion fees alone for repeat listings of the same (failed) items re-listed over and over again.

3. This (#2) puts eBay forever at odds with their Sellers because, IMO, failed (but repeatedly relisted) CORE listings are the basis of eBay's revenues. However, repeatedly failed CORE listings do not make money for the sellers. Sales from my Store items increased significantly when eBay started including the Stores in general searches - and that has been the experience of everyone with whom I have spoken on the subject. If FVF fees from increased Store sales didn't offset the lack of CORE one-time listing fees for same said individual sales (and FVF fees produce much more revenue per item than a corresponding one-time CORE Insertion Fee for the same item if it sells the first time out), then the only explanation for eBay's current move, laughingly called "rebalancing the marketplace," is that eBay needs more failed and repeatedly failed CORE listings, and is trying to force sellers into that position. That's awfully sad.

I've never expected eBay to play fair. Like many of the people who have commented in this thread, I can roll out a list of inequities as long as my arm, but it takes too much of my time & energy (therefore, my money) to address eBay issues with eBay itself; it's a waste of time.

I'll stick around eBay as long as eBay serves my purposes. When it fails to do so, I'll "rebalance" my own marketplace by leaving.

That is, I'll stick around if eBay is around to stick to. I fully expect some sort of eBay rupture in the near future because management appears absolutely desperate.

Take care everyone - I've enjoyed reading all the posts. Thanks

[HollywoodCatLady]

I really must applaud the brave souls who've had the courage to post those wonderfully funny FEE HIKE listings on eBay!

They've injected some much-needed humor into a situation that is deadly serious. Or just plain deadly.

Thinking of these listings will inspire me when I end/relist all of my store items on August 20/21.

BRAVO - and BRAVA!

[webmz]

From what Ive read, many of you have items that you sell for a great deal more than we do. We deal in trading cards. One of the things I've used the store for over the last 2 years, is to list single trading cards for collectors who want to complete their card sets, etc. ( average purchase is $0.50- 1.00, not including shipping.)
Mainly, it gets rid of allot of excess single cards that would otherwise build up with each release we carry & usually buyers want to combine shipping and end up going thru the rest of the store & adding to more items.
As long as it was 2 cents a listing , I could justify those listings even though they were time consuming & not high profit.
But currently our store has 2200 listings and according to ebays customer service, if we make no changes & have the same number of listings , then our monthly listing bill will go up aprox $110.00 when rates change.
( this doesnt take into account the increased FVF)
We use no features except gallery in the store, so there's no where to cut costs.

We can't raise the price of those single cards; they won't sell.
[ too many trading card sellers on ebays as it is]

So I have gone through and started making a list of items that I'll be ending in the next week.

Not to prove a point ,or as a protest, but it's just simple math.
Been on ebays since 1997.

maybe it's time to start using some creativity to find ways to sell product , like we did BEFORE ebays.

anyway, that's my 2 cents & hope sales pick up.

[emcgea]

I closed my store for the moment while I evaluate the situation. I think Ebay are going to find the next few years will be a lot leaner for them due to the increasing competition.
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[snoopygirl]

I posted my 2 cents (or is that 5 or 10 cents now?) in the Glitches Forum since, while eBay's fee hike is bad enough, it's actually the search glitches that will drive me off - and the billing issues that just make me livid. Actually, let me rephrase that, it's not the billing issues it's the "yeah, we know.... but we can't give you a refund until we fix it".

The stats supporting my issue with search are in the link toward the top of the post:

http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=20268

[catladykate]

My business model is different. We sell depression glass, stemware and vintage china. I list my items separately since that's how my customers like it and seldom have more than 8 of a single item.

What I'm doing (and have been doing) is:

1. Weeding out the true junk. That's the leftover cups and saucers from china patterns where everything else sold months ago. Listing fee increase are an incentive. I put a few things on sale and will relist on August 21 for one more month or group into lots to go on auction.

2. Continue to market my TIAS store.

3. Market my eBay store even more. Put one piece from a pattern on auction with link to the store items. I'll stick with 7 day listings as 10 days is no better. Use the email and other marketing techniques.

4. eBay is still my best source of buyers and I'll continue my present policy of putting good items in my store at full price.

5. Buy smarter. Avoid buying stuff that is low priced and not likely to sell. Unfortunately the fee changes make it fairly unprofitable to sell lower priced glass. A lot of Fire King is under $10.

What I'm not going to do is waste time getting upset.
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http://www.tias.com/stores/catladykate

[Ming the Merciless]

The first rule of these forums ought to be to use nommes de plume and never reveal anything about yourself that might enable ebay to identify you and then retaliate. And, believe me, they DO retaliate if you hit their bulleyes too many times.

I am an ebay platinum power seller who's been lurking on these forums for a while. I've been in professional sales and sales management in some high powered corporations most of my adult life and career.

Within a year after I began selling on ebay, it became clear to me that the opposite of anything ebay said was far more likely to be the truth.

Consequently, in spite of numerous phone calls from ebay over the year pressuring me to open a store (the most recent one came in December, 2005), I refused to open a store. Ebay either couldn't or wouldn't provide any marketing data that demonstrated increased seller PROFITABILITY. IMO, the reason they couldn't produce such data was because stores did not and do not now generally increase seller profitability (there are a few exceptions), but for a while they certainly increased ebay's profitability which, after all, is the name of the game. Stores have always been inimical to ebay profitability, but in the best Meg Whitman tradition, stores were a quick fix. Now they're a drag on profitability so ebay has broken yet another verbal contract with sellers with stores, not once this year, but twice. And they broke their word with core sellers when they put store items in search last February -- something they promised core sellers early on they wouldn't do.

Meg Whitman and her lackey Bill Cobb have transformed ebay into a predatory, exploitative corporation whose goals are nearly always inimical to seller profitability.

Ebay has no investment whatsoever in the success or failure of ANY seller. It is and always has been how many ways ebay can devise to sell you more and more which increases their profitability and decreases yours. This model worked reasonably well until the influx of new sellers to replace ebay-killed old sellers began declining so today we see the TV commercials for tutorial CDs about how to sell on ebay. Ebay needs a whole new class of naive new sellers to fleece - a group who won't catch on a few months that ebay can't be trusted.

Those who've commented on stock-motivated decisions are right on target. Ebay management receives varying percentages of their compensation packages through stock options, and increasing the value of the stock became the single most important factor when making any decision. And it's this short sighted mentality that's on the verge of killing ebay though this strategy has made millionaires and billionaires out of liars and thieves who've elevated lying to and stealing from sellers into a corporate art form worthy of Ken Lay.

Ebay is, moreoever, in likely violation of numerous anti-trust laws including their recent decision to ban Google payments. I remember when ebay killed Billpoint by making it so seller unfriendly and bought PayPal. The Department of Justice approved the sale based on ebay's written assurances not to impose any anti-competitive payment modality restrictions on its site. I hope Google sues every member of ebay management in the corporate as well as personal capacities for violating anti trust laws and ebay's agreement with DoJ.

When sellers talk about boycotts, ebay merely counters with listing day freebies.

I have no desire to kill ebay as a viable selling venue, but I do think there are ways to force them to shape up. Ebay's operative strategy when dealing with sellers is that whatever ebay does is legal until a judge or court says otherwise. This had led to exceedingly questionable tactics including numerous billing 'problems,' that always favor ebay, hidden fee increases, unilaterally abrogated verbal agreements, etc. But ebay knows that most sellers don't have the time or legal expertise to take them on so the list of abuses grows and grows until the list has literally become intolerably long.

What will have an impact is to decide on a week in which a large number of experienced sellers call the San Jose Better Business Bureau (408) 278-7400 and file written complaints about two or three of the most egregious examples of ebay's/PayPal's anti-competitive behaviors; The California Attorney's General's Office of Consumer Protection 1-800-952-5225 and then complete their ONLINE complaint form; your state's Attorney General's Office of Consumer Protection' and perhaps the most of all, call the "Wall Street Journal's" news desk at (212) 416-2500 and ask to speak to the reporter who covers ebay. Tell them your ebay horror story emphasizing those things which can be independently documented such as hidden fee increases!

The status quo facts are that taken in the aggregate ebay management isn't operating in the long term best interests of the company and has deliberately created an antagonistic relationship with most of its professional sellers in ways that need not be reiterated here. In the past, Meg Whitman used a variety of short term fixes such as acquisitions and constant seller fee increase to affect stock prices, and her bird flu infected chickens are coming home to roost.

If WSJ receives a dozen and dozen or better yet a few hundred complaints of ebay mismanagement (if not worse than simple mismanagement), stock holders will react. And that, fellow sellers, is what will change ebay, not boycotts. Make your case where it counts!

If you speak with a reporter, the first to do is to ask for confidentiality and a pseudonym for your identity or ebay will likely retaliate against you if they can identify you.

Ebay needs not only a entirely new management team who understands that ebay's long term health and profitability depends on the success of its customers, the professional sellers, as well as a new management team who treats its customers as valued entities and not as convenient objects of exploitation.

Let's pick a week in the near future and fire off a collective volley that will get ebay's attention. The truth is the truth. And ebay has no viable defense against the truth.

It's time to dump the ebay kool-aid in the San Jose harbor.
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The best way to expose corporate slugs is to lift the rocks concealing their hiding places and expose them to the light of the media, business oversight agencies, and law enforcement.

[SandysFancyPants]

Ming, you are a genius! Thank you.
Your mama must be proud!
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[Ming the Merciless]

Given the ethical framework or lack thereof that some corporations operate within and given the recent and ongoing SEC investigations that are disclosing what apparently is a not uncommon practice of illegally backdating of stock options to a time when the stock was worth more, one wonders about how and when stock option compensation packages are issued and dated since they play such a key role in executive compensation in corporations you may have interest in following.

And anything to do with stock prices has, in my opinion, a direct and crucial role in determining when, how, and how much a corporation increases its prices to its customers.

True story: Within the last two weeks, the CEO of a large corporation was convicted of back dating stock option certificates for executives in his corporation.

Here's what this is and how it works: Let's say that when John Doe was appointed President of U.S. operations, XYZ stock was worth $65.00 per share. His stock option clause for 100,000 shares, however, wouldn't be activated until after Mr. Doe had been with XYZ, Inc. for one year in that job capacity. But after one year, overall poor market performance drove XYZ stock down to $55.00 per share. (Or a criminal CEO could have even backdate stock option certificates on Day One of Mr. Doe's employment to a time when the stock was worth more which is also illegal.)

So during this period of time, the value of Mr. Doe's stock option compensation agreement package decreased in value from $6.5 million to a mere $5.5 million. XYZ didn't want to lose Mr. Doe, so the XYZ CEO backdated the stock option certificates to when the stock was worth $65.00 per share rather than when the stock option agreement specified (a year later) when the stock was $55.00 per share thereby magically and quite illegally erasing the decline in stock price and $1 million 'loss' in the value of the stock option package.

Who do you think paid for the $1 million difference? The stockholders? Nope! The CEO? Nope! The money is typically recovered by passing it off as a cost of doing business to XYZ customers.

The SEC is the Securities and Exchange Commission. The SEC is a federal agency located in Washington, D.C., and their responsibility is to monitor stocks and bonds transactions and to answer questions, inquire, investigate, intervene, and possibly prosecute individuals and corporations when they receive inquiries, complaints, and when laws and SEC regulations are suspected of being violated or have been violated.

The SEC maintains a website at http://www.sec.gov. Their general telephone number is (202) 942-8088, and inquiries or stockholder complaints can use this number: 1-800-SEC-0330.

This post and others are not intended to imply any wrongdoing whatsoever on the part of any individual or corporation but rather to 1) educate consumers/customers about how modern corporations work 2) suggest perfectly legal tools and strategies that customers/consumers/stockholders can use when there is cause to believe that wrongdoing MAY exist, when other mediation avenues have been exhausted, and when customers have received no remedy to legitimate, verifiable, and well documented complaints.

Corporations whose key decisions appear to be based more on the value of their stock from one quarter to the next rather than the long term health of the company warrant, IMO, some careful and thorough scrutiny not only from their customers but from their stockholders as well -- especially if the value of the stock is declining and if the corporation may be using questionable and/or hidden methods to obtain revenues from their customers.

Do you really want to have be changing your business model every three months at the whimsy of any corporation who decides its revenues aren't high enough? Do you want the success or failure of your business to depend on whether your partner corporation keeps its word, arbitrarily and unilaterally violates their verbal agreements, and who requires its customers to agree to a 'users agreement' that forces you to de facto give up all your rights to enforce contracts verbal or otherwise?

All anyone needs to make an SEC stockholder inquiry, a stockholder complaint, or to attend a stockholders' meeting is to own ONE share of any given corporation's stock.

Anyone can make a general inquiry.

Remember what Howard Beale said in the classic film, NETWORK: "I'm as mad as hell, and I'm not going to take it anymore!"

Corporations whose customers are for all intents and purposes independent contractors count on a lack of unity and rely on the mushroom strategy to remain in business.

You don't have to be one of their mushrooms! Don't continue being a victim of corporate misadventures! Use the tools that are available to determine whether the tactics some corporations use are legal or ethical...or not.
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The best way to expose corporate slugs is to lift the rocks concealing their hiding places and expose them to the light of the media, business oversight agencies, and law enforcement.

[kjp55]

[Ming the Merciless]

[Tradguy]

Ming, you probably have a point about anti-trust, but I have to agree with KJP that contacting authorities in the matter probably won't have any effect.

Anti-trust is usually a criminal prosecution done by the DOJ, although they also coordinate with the FTC, who acts as a watchdog. Ebay has skirted 2 anti-trust investigations - one in 1999 (blocking of auction spidering) and one in 2004 (paypal purchase).

I would not be suprised if the DOJ is looking at Ebay very hard right now. Ebay's logic for banning Google Checkout is because it fails to meet their criteria for how long it's been doing business (isn't it 2 years?). Even if that is considered "reasonable", if ebay continued to ban google after that point, it could be very tricky for them indeed.

But I think Ebay may actually be in anti-trust hot water already. Every time Ebay does something to "favor" paypal over other options, the move could be seen as anti-competitive because ebay and paypal have such a dominant share of the online auction market.

It's really very similar to what Rockerfeller tried to do with oil - by controlling the production, refining, and tranasportation (trains), he was able to put his competitors out of business by raising their rates while keeping his own low. Also Microsoft, who pressured dealers to accept other MS products, and also included other MS products with Windows, sometimes to the exclusion of non-MS products. I think a strong analogy could be made with the way ebay has seamlessly integrated paypal into the ebay buying experience on multiple levels, while simultaneously discouraging the use of other payment options, or sometimes just excluding them altogether.

I don't think there can be any doubt at all that if Ebay and Paypal were seperate companies right now, that the DOJ would not allow the acquisition. It violates multiple "rules of anti-trust".

Ina has an excellent analysis of the ebay/paypal merger in this 2002 article:

http://www.auctionbytes.com/cab/abn/y02/m08/i19/s01

The downside to anti-trust is that these investigations take years and years.

Also, in the final analysis, it's anti-trust that will probably prevent Microsoft from seriously considering the acquisition of either ebay or yahoo. I don't think MS will even take the chance.

As for the allegations of "software theft", I wasn't aware of any criminal cases being brought against Ebay. There are all civil actions that allege various levels of intellectual property copyright and patent infringements. All large software corps - being very deep pockets - are sued regularly by other software corps on this basis. The issue is sometimes nothing more than who had an "idea" first, and the actual software systems are developed independently. I used to run a software development company, and it's amazing how programmers in different places can develop almost identical systems independently. So I take this with a grain of salt...

Now what I did find interesting was your long message all about fraudulent stock options - which you end with "you don't mean to infer any wrongdoing..."....LOL. And you think KJP has an agenda? It reminded me of that old joke "So, how long have you been beating your wife...". Far as I know, Ebay has always come up clean with the SEC, and what you have described is a federal crime. Appreciate the "lesson", but it's hardly relevant unless you are claiming Ebay has done this. It seemed like you were saying "see, look how bad corporations can be" - which means what? That all corporations are committing federal crimes because one did?

You also failed to mention that since 2002, the SEC now requires all option grants be reported within 48 hours of their issuance. It is believed that this will elminate 99% of backdating fraud - and in fact, all evidence indicates that it has.

Okay...now back to culling my ebay store items

[Lou]

Ming, I also don’t get the connection between ebay and the back dating of options investigations by the SEC. However your explanation of what the backdating involved is a little off.

Stock options provide an executive the right to purchase company stock on a future date at a set price; the price at which the stock can be purchased is referred to as an exercise price, or strike price. Typically, when options are granted, the option exercise price will be set at or above the per share value on the grant date so that the executive will profit from the option only if the stock price increases after the grant date, thus giving the executive an incentive to see that the company does well, with a resulting rise in the stock price. For example on the date the option is granted if the stock is trading at $50 per share, the strike. An executive will normally choose to exercise his/her right to purchase the stock on the future date if the per share stock value is above the exercise price that must be paid to the company to acquire the shares.

Therefore if the option exercise price is backdated to a lower per share cost based on a share value earlier in the year would have an exercise price below the share value at grant date, so that the executive would have a “built-in” profit on the option. This can result in the company having to accrue a charge against its earnings for financial accounting purposes and therefore can affect the accuracy of financial statements filed with the SEC.

Tradguy, while the reporting requirements for stock options was changed in 2002 by the Sarbanes-Oxley Act AKA SOX (reform enacted in the wake of Enron), some of the cases being investigated by the SEC are for years after the effective date of the law. So I'm not so sure that SOX elimated 99% of the fraud.

Now back to your discussion on ebay and whether it's practices violate the any other laws such as Anti-trust.

Lou
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[HollywoodCatLady]

It occurred to me the other day that eBay had recently sneaked in what amounts to a fee hike on auction items.

For a long time, if an item did not sell - was relisted - and sold the second time around, the relisting fee was refunded. On the relisting form was the suggestion to cut the price of the item and make it more attractive to buyers. There was, in fact, a check-box for an automatic 50% reduction.

A few weeks ago I cut the price of an unsold item and relisted it; it sold at the reduced price.

When I asked about my listing fee credit, I was told that I was not entitled to a credit because I had cut the price of the item.

What's particularly annoying about this is that eBay changed the rules in the middle of the game WITHOUT WARNING or NOTIFICATION.

Learning this on the heels of the fee hikes for stores is disenchanting to say the least.