Death of the Powerseller

 

I’d like to share with the group some eBay news that is more applicable to the sellers but I think those of you who are primarily buyers will be interested in this also. Let me begin by making a confession. I am no longer a Powerseller. That cute little logo that sat next to my eBay user id is gone. Turns out that I’m not the only one that has been killed off though. As I attended the Easley, SC TOR and a few weeks later the Williamsburg, VA TOR I discovered that I was not alone. In fact several eBay sellers (many you would recognize if I listed them) have been stripped of their Powerseller status and in some cases even worse.

 

So if it was a meteor that killed off the dinosaurs, what is killing off the Scout collectible Powersellers? Try DSR. As in Detailed Seller Rating. The 5-star rating system that eBay rolled out a few years back is probably very familiar with those in the community by now. In the old days you used to give a person feedback that was pretty much straight forward. Either positive, neutral or negative. As a seller I usually maintained a 99.5% or higher rating with the occasional disgruntled customer who decided to ding me. However, eBay decided to change the game even more in 2010 and started to take those DSR ratings and start penalizing sellers if there were certain areas that didn’t measure up. In other words even if you got a positive feedback if enough sellers complained (via the star system) about one aspect of your service then you would get red flagged.

 

For me the trouble started when I was selling like a mad man after the 2010 Jamboree. Even with lots of help I couldn’t keep up with the pace of mailings and some of my orders were mailed out a week or more after the purchase. Because of these dings in the “Shipping Time” performance numbers my seller standing performance was lowered. Within a month or two this resulted in me losing my Powerseller status. The next step down that path was they denied me the ability to operate a Premier eBay Store downgrading me to the Basic version. This is the move that really hurt because I had been paying them close to $50/month for the Premier store so that I could get my fixed priced listings at $.05 each. Now that I was knocked down to the $15 store I was paying $.20 per listing. Ouch!

 

Well eventually the Jamboree crush subsided and those numbers improved. However, in December I got hit by the left hook that I didn’t see coming. My eBay store had a very deep inventory of 2010 Jamboree pieces and some folks would come along and purchase as many as a dozen or more pieces at a time. I offered a standard policy for combined shipping and handling that was $1.50 for the first and 50% off (.75 cents) for each additional. Most people seemed ok with that. However, the way eBay has the system set up if just a few people ding you then you are toast. Do in December a couple of buyers left me positive feedback but thing in the one area of “Shipping and handling charges” they gave me 1s and 2s. The problem for me was these people bought like 10 or more items and dinged me on each and every one of those listings. So on eBay’s system this looked like a tidal wave. I won’t go into specifics because other sellers might not appreciate me sharing ALL this information but eBay is very sensitive to those 1s and 2s and if a seller gets just a few of them all heck breaks loose. For me this resulted in a selling limit which meant that I could only list a certain amount of stuff and so I found myself forced to work ways around this hurdle. I’m glad to report I’m coming out the other side of it (the bad marks go away after three months) and I’m gearing up for a better Spring.

 

During the course of this drama I didn’t phone eBay but several of the sellers that I spoke to at the TORs did. They all got the same story from the customer service people. Offer Free Shipping. In fact one guy told me that in the course of a thirty minute phone call the lady mentioned that to him like a dozen times. And shipping and handling charges seems to be the common area among the sellers I’ve spoken to where they have been getting heat from eBay. Now mind you these are people that charge $2 or less per item but they are still getting beat up about it, stripped of their Powerseller status and their accounts downgraded.

 

I’ve heard a couple of takes on this from the group of sellers I’ve talked to that I’d also like to share. One who had that long phone call made the comment that eBay doesn’t get their cut off of S&H charges. The representative told him to build the cost of S&H into the price of the item and offer free shipping. He believes that eBay sees millions of dollars every day being paid out by buyers for S&H fees and they want to force sellers into sticking the cost of this into the sales price so that they can get their %cut off of that fee.

 

Another seller who has a very active eBay store told me that he has run the numbers several times and he figures that on your typical item listed between $5-$10 in a store eBay is going to take 23% of the sale price when its all said and done. That figure applies if you first run the item at auction (fee), then if it doesn’t sell stick it for sale as a buy-it-now in your store (fee) and then sell it (fee) and accept payment by PayPal (fee). For that reason he doesn’t see how he can afford to give away free S&H on top of the fact that it does actually cost something to buy office supplies, travel to the post office, and stick postage on the package.

 

Let me just say that because of this experience I have permanently discounted my combined S&H policy so that each additional item you buy is only $.50 and I’ve imposed a cap on the amount you can be charged regardless of how many items you buy.

 

So I think I’ve left the readers here on Patchblanket enough ammunition for comments. Fire away!

 

 

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Here is a cut and paste from the Spring 2011 Seller Update:
We know that online buyers pay attention to the total cost of an item–including shipping–when deciding what and where to buy. To encourage low-cost shipping, starting July 6 Final Value Fee rates for sellers with a Store subscription will be [B]reduced for both Auction-style and Fixed price listings and applied to the total amount of the sale–including shipping. [/B]

[SIZE=3]The previous discussion of eBay’s policies were foreshadowing for this announcement. I said in that forum post that eBay didn’t like losing out on all the shipping and handling fees that sellers where charging. So as of July 6 they will just change the rules and charge the seller standard final value fees (upwards of 9%) on the total cost of the sale including s&h. Now mind you that the PayPal fees have always been applied to the total cost of the transaction. [/SIZE]You should see the over hundreds, now thousands of comments that are lighting up the special discussion board they have created for this.[SIZE=3] Here is a link – needless to say there are some p’d off users right now. For my part I always love the BS language that they use like, [SIZE=2][/SIZE][/SIZE][SIZE=2]all of which means more sales for you.” So while they are stealing more money out of my pocket its actually a GOOD thing for me.:mad:[/SIZE]

By jason on March 15th, 2011 at 5:54 pm

Here is a link to the 2011 Spring Seller Update if you want to read the full text. Click here

By jason on March 15th, 2011 at 6:05 pm

On the one hand, it might mean sellers will move away from outrageous shipping charges (like $7 for shipping & handling on a patch), but it probably also means they’ll build it in to their original starting price. Seems like an eBay push for free shipping, although I can’t see what the advantage to them would be. When you factor in the listing fee, final value fee, Paypal fee, credit card fee, what is eBay/PayPal getting? Something like 15% maybe? Don’t forget as a big seller, they’re also going to 1099 you so you can pay income tax on the net proceeds too.

By ISCA87L on March 17th, 2011 at 2:56 am

I talked to one seller who gets a lot of sales via his eBay store and he figures after all the eBay and PayPal fees they get right at 23%. That was before this policy change. You are dead on though – they want sellers to give free shipping to make it more buyer friendly. Whether you build it into the cost of the item or just eat the expense its not coming out of their pocket but out of the sellers. To me there is already a deterrent to charging unreasonable shipping and handling – namely the DSR system where the buyer can leave overall positive feedback but leave a 1 or 2 under s&h charges. Those 1s and 2s do hurt the seller and can cause their account status to be effected. Perhaps the more serious threat to eBay is the 1099 requirement. I’ve talked to more than a few casual sellers who are going to inch up close to that trigger selling limit then just give up selling anything else this calendar year. I think we would all be shocked at how many people in our hobby have been selling on eBay for years and not reporting a dime of the income on their taxes. The last thing they want now is to do something that would put that unreported income on the radar of the IRS.

By jason on March 17th, 2011 at 4:09 am

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