EBay Says Bold Changes On the Way
EBay announces new fixed-price listing fees, new media shipping charge limits and gets tougher with new DSR minimums. Plus, the auction giant plans to cut paper payments and enable merchant accounts for direct payments in a new checkout system this fall.
This year eBay has really shifted its focus to buyer satisfaction — often at the dismay of many of its sellers. Today's big eBay announcement shows that eBay is still on track and fully committed to keeping its buyers happy. Lorrie Norrington, president of eBay Marketplaces, said in a public announcement that eBay is making some bold changes that will help sellers lower their up-front costs and help them to sell more efficiently.
"Combined with the improvements we're rolling out to deliver a more consistent shopping experience this fall, buyers will see more bargains than ever, and keep coming back to eBay to buy from you," says Norrington.
Starting With Fees...
Fees are always a hot eBay topic and in the past these changes have prompted boycotts by irate sellers. There has been a lot of speculation lately about how eBay will tackle fees, with some industry watchers even suggesting that eBay will remove listing fees altogether. Apparently that's not the case, because though some costs will be reduced, others will go up.
Starting Sept. 16, eBay will be changing its pricing to reduce start-up costs for sellers. To do this, eBay will lower the listing fee for all items sold in the fixed price format to only 35 cents in all categories, except Media which has been reduced to a 15-cent insertion fee.
Sellers can also take advantage of a special 5-cent rate on Buy It Now listings in the Media categories using pre-filled item information until year-end. The listing duration of all Buy It Now fixed price listings is also being increased to 30 days, up from seven, with an option for automatic renewal. With the new fees this enables sellers to list in Buy It Now fixed price listings for 30 days at 35 cents.
As we seen with the proposed eBay Motors fee changes (see eBay Biz: Motor Fees Change, iPhone Apps, Alternative Sites), the decreased listing fee is good news for sellers, but unfortunately there will also be changes to Final Value Fees (FvF). EBay is shifting the costs to sellers by way of final fees instead of listing fees. Here we will see no fee charged for items not sold, and FvF changes are spread across multiple categories and multiple closing price tiers. Under the new system, here are two examples:
Cameras & Photo: Item sells for $250
Current FvF: 8.75% of the first $50 plus 3.50% of the remaining ($11.37)
New FvF: 8 % of the first $50 plus 4.50% of the remaining ($13)
Assuming you listed this at a fixed price of $250, current fees owed (insertion plus final value fee) would total $14.37. Under the new fee structure in September it would be $13.35. You can expect similar results in categories including Computers & Networking, Cameras & Photos, Electronics, Video Game Systems. For Media (Books, Music, DVDs & Movies, and Video Games) you will see similiar changes, however, this category has the higest Final Value increase. Now the final value starts at 8.75 percent of the first $50 -- this will jump to 15 percent.
In all other categories the final fees are different tiers. Using the same listing and selling price in Clothing, Shoes & Accessories, for example, produces quite different results.
Clothing, Shoes & Accessories
Current FvF: 8.75% of the first $50 plus 3.50% of the remaining ($11.37)
New FvF: 12% of the first $50 plus 9% of the remaining ($24).
In this scenario, if you listed this at a fixed price of $250, current combined fees owed (insertion plus final value fee) would equal $14.37. Under the new fee structure it would be $24.35. Sellers will need to do their math when figuring out starting and fixed prices to earn the highest profit they can as a seller. The charts for the new fee structure can be found here.
So, that is what sellers can expect for fee changes next month. In regard to eBay Auction-style listings, there will be no change. Norrington commented, "As for Auction-style listings, we've decided not to make any changes. We believe this format is already a good deal, especially when you list with a low start price. Auctions will always have a place on eBay — they are a proven way for sellers to get the best value for their unique items, and they continue to receive significant exposure in search as they are sorted primarily based on time ending soonest."
Shipping Limits Introduced in Media Category
Again, eBay is blowing the free shipping horn by offering free shipping incentives in all categories, plus introducing new shipping charge limits in the Media category. Shipping costs are seen as a problem for many buyers, and eBay has been getting tough on sellers they think charge too much for shipping.
While eBay is offering several shipping incentives, it will also introduce limits on shipping and handling charges in one of the auction site's biggest and most competitive categories — Media — which includes Books, DVDs & Movies, Music and Video Games. Under the new rules, sellers listing these items will be required to offer at least one shipping option within a specified limit.
The dollar limits set by eBay were based partly on what e-commerce competitors typically charge for shipping. This, according to eBay, will ensure that buyers encounter fewer excessive shipping charges. Some examples of shipping limits are as follows:
- Audiobooks: Max shipping price of $4
- Children's Books: Max shipping price of $4
- Blank Diaries & Journals: Max shipping price of $5
- Wholesale & Bulk Lots (Audiobooks): Max shipping price of $10
- DVD, HD DVD & Blu-ray DVD, HD DVD & Blu-ray: Max shipping price of $3
- VHS: Max shipping price of $3
- Wholesale Lots DVDs: 101-250 Items Max shipping price of $3
EBay's complete shipping limit chart can be read here.
Say Good-Bye to Checks and Money Orders on eBay
EBay says that checks and money orders will no longer be accepted on eBay after this fall. The company's reasoning: it says that check or money orders are 80 percent more likely to result in an "item not received" (INR) than those paid with credit card or PayPal. However, buyers can still use these payment methods for item pick-up, at the seller's discretion. EBay also says this change is prompted by its upcoming checkout system that will only support electronic payment methods, including a seller's own Internet merchant account for direct payments. Obviously merchant accounts will be a huge benefit to many bigger and business-focused sellers, but this still leaves the many casual and part-time sellers out in the cold.
Currently eBay's Mature Audience category is one that prohibits the use of PayPal, but on the eBay Discussion forums, some sellers are speculating that by the time eBay removes paper purchase options in favor of electronic payments, PayPal may very well be accepted in this category. EBay has long said that it will never make the auction site PayPal-only, however, by removing the ability for sellers to accept checks or money orders, eBay has removed all payment options that are cheaper than PayPal.
DSR, Negs & More
EBay's Detailed Seller Ratings (DSR) have probably managed to irk more eBay sellers than any other changes the auction giant ever implemented. In today's public announcement, Norrington said that a new minimum Detailed Seller Rating requirement will be implemented. This new minimum will require sellers to have at least a 4.3 across all four DSR categories, over the prior 30-day or 12-month period, depending on volume, in order to list on the site.
Addressing those that do not meet that requirement, Norrington said, "Today, only a small fraction of sellers fall below this threshold, yet they are responsible for a high percentage of customer complaints, which hurts you and our marketplace overall. We're urging all sellers whose scores fall below the 4.3 threshold to use the next two months to adjust their business models and/or work on improving their DSR scores."
Lastly, a quick reminder that as of yesterday neutral feedbacks are no longer counted as a part of a seller's Positive Feedback percentage. Due to the timing of this change, neutrals will not impact PowerSeller eligibility for August.
As always, if you want to weigh in with your opinion on these changes, visit the forum link below or e-mail Ecommerce-Guide.com Managing Editor Michelle Megna at mmegna@jupitermedia.com.
Vangie Beal is a seasoned online marketplace seller, frequent contributor to ECommerce-Guide.com and avid online bargain hunter. She is also managing editor of Webopedia.com.
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