Big Changes Again to eBay Pricing

 

Basic Fees Update

 

There has been a lot of chatter about this among sellers. It seems like eBay is tweaking things again. They have closed down eBay Express (pulled the plug) and maybe some of these changes are designed to make the regular eBay site look a little more like the site they vaporized. I don’t know. Here is what I do know. They are offering an attractive pricing model (upfront costs mind you) to be able to list items at a fixed priced and giving you a month to sell it. It is Very Much the same option as you would have in an eBay store as a seller. In the store you use the option GTC (good til closed) and you list the item and let it run and renew every thirty days. The new fixed priced listings which are going to cost only 35 cents will run for 30 days GTC and automatically renew. In addition you can have whatever quantity of items for that 35 cents.

 

Again seems very much like your store. You can list item “A” at a set price and have a quantity of 10 available. The other thing that is very much like an eBay store (ready for the bad news) is they are jacking up the final value fees to 12% (from 8.75%). Once again this almost exactly what store sellers pay.

 

So here is how I boil it down. Today you can list an item in an eBay store for about 3 cents for 30 days and pay 12% final value. When this new option comes online (mid-Sept) you can instead sell the same item as a fixed priced listing (more visibility on eBay) for 35 cents and pay 12% final value fee.

 

Looks like a double edged sword to me. They want people to dump stuff out of their stores and run it as a fixed price listing so they can make 10x as much on the listing fee (instead of 3 cents they get 35 cents). Either way they are going to hit you with 12% final value fee.

 

 

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Oh and did I mention that beginning this fall buyers will not be able to pay for items using checks/money orders any more!? Talk about shaking up the system. What is going to be the fall out? Here is what I got straight from the site:

We’re taking steps to give sellers the most dynamic marketplace on the Internet: reduced upfront cost, optimized exposure, and a more consistent buyer experience to drive more sales.

  1. Your Auction-style listings with a low start price are still the best deal on eBay — no change in Auction-style fees! Plus, we’re introducing a new 35? Insertion Fee for Fixed Price listings-regardless of the asking price or number of items in the listing-with a 30-day duration and automatic renewal option at no extra cost. For some of your items, this new Fixed Price option may be a great solution.
  2. Driving more sales with a more consistent buyer experience
    We’re taking other steps to ensure buyers keep coming back to eBay:

  • More relevant search results to drive more sales. We’re optimizing Best Match to surface the inventory most relevant to each buyer and show the best of Auction-style and Fixed Price.
  • Get more information about these important changes. You’re also invited to participate in one of several webinars scheduled for August 20-26.

    By jason on August 28th, 2008 at 2:53 am

    Faster, more secure checkout experience

    Paper payments end this October

    Beginning late October 2008, all items listed on eBay.com must be paid for using one of the following approved payment options:

    • Direct credit or debit card payment via a merchant credit card account
    • PayPal
    • ProPay
    • Payment on pick-up

    Paper payment methods such as checks and money orders will no longer be accepted on eBay.com.

    By January 2009, all approved electronic payment methods will be integrated into eBay checkout. For example, buyers will be able to enter their credit card number directly into eBay checkout, and the payment will be routed to the seller’s Internet merchant account or to their PayPal account.

    Please note that the new payments policy will not apply to the vehicles categories in Motors, capital equipment categories in Business & Industrial, Mature Audiences and Real Estate.

    By jason on August 28th, 2008 at 2:55 am

    Limits on shipping and handling charges in some categories

    What are maximum shipping and handling charges?
    In Books, Movies & DVDs, Music, and Video Games eBay will be enforcing limits on what sellers can charge for shipping and handling. For specific information by category see Maximum Shipping Costs.

    Why are you establishing maximum shipping and handling costs?
    Buyers have told us that shipping costs on eBay are too high, and this is causing them to make their purchases elsewhere. This is hurting both our sellers and our buyers. Setting maximum shipping and handling costs based on historical date of what buyers have told us is reasonable will keep more buyers satisfied and drive more sales for sellers.

    Why were these categories selected?
    We are starting with categories where we believe buyer expectations are particularly heightened to free and reasonable shipping. Our goal over time is to bring reasonable shipping limits to more categories.

    How did eBay determine the maximum shipping and handling costs for a category?
    We based our maximum shipping & handling costs on recent transaction data of what sellers are charging and what buyers have told us is reasonable.

    Do the maximum shipping costs include handling costs?
    Yes. Handling costs are included in the maximum amounts.

    Why are you setting limits on shipping charges lower than my actual costs to ship?
    We based our maximum shipping & handling charges on recent transaction data of what sellers are charging and what buyers have told us is reasonable. We know that what buyers consider to be reasonable will be less than sellers’ actual costs in some cases. We believe that by offering buyers at least one shipping option that they deem reasonable, sellers will increase their overall sales and conversion.

    Are there shipping cost limits for international shipping services or expedited shipping?
    No. Maximum shipping and handling costs apply only to the first flat rate shipping service to the U.S.

    What can I do if the maximum shipping and handling costs do not cover my expenses for packaging and shipping?
    The maximum shipping and handling cost may not cover sellers’ shipping costs in some cases. In the event that it does not, you can do one of the following:

    • When selling a bundle or quantity of items, you can use the shipping calculator to charge actual shipping charges.
    • When selling via fixed price, include all or part of the shipping cost in the item price.
    • When selling via auction:[LIST]
    • Continue to list your item with the same start price and a shipping price at or below the maximum shipping cost. Many of our sellers have success with auctions, even at free shipping, because their item looks more competitive to their buyers.
    • If your actual shipping costs are higher than the maximum shipping & handling cost, start the item price higher to cover your shipping cost. This technique will minimize risk that you will lose money on shipping.
    • Move your item to fixed price and include all or part of the shipping cost in the item price.
    • If you are selling a bundle or quantity of items, you can use the shipping calculator to charge actual shipping charges.

    [/LIST] I’m an international seller. Do the shipping cost limits still apply?
    Yes. If you are listing your item on the U.S. site, maximum shipping costs will apply for sales to the U.S. regardless of the location of your item.

    How will limits on shipping charges affect my cross-border sales?
    Maximum shipping and handling charges should not affect your cross border business. Sellers will be required to set at least one domestic shipping cost under limit, and can set alternative options for expedited and/or international shipping. International sellers listing directly on the U.S. site will be subject to shipping cost limits on their first domestic shipping cost.

    In categories with maximum shipping costs, why is there a shipping cost DSR?
    We are only setting a maximum shipping and handling cost for the first shipping option. Sellers can still set their price lower than the maximum shipping cost on that option as well as have alternative shipping options. Therefore, we will keep the shipping cost DSR in place.

    How will the shipping calculator work with these shipping limits?
    We recommend the shipping calculator to be used for items that are being sold in a bundle, quantity, or larger/heavier than the average item listed in the category you are listing in. We will monitor items using the shipping calculator to make sure that those that are over the limit differ from the assumptions that we used to establish the maximum shipping costs.

    Will this apply to other categories in the future?
    We currently do not have other categories scheduled. Consistent with any other major change we’ve made to our policies, we will let our sellers know well in advanced to adjust their listings.

    By jason on August 28th, 2008 at 3:02 am

    If you are active on eBay or just a curious collector you might have heard about some of the changes on eBay that are coming up. These changes will have a profound impact for some collectors and sellers. The changes also hint at eBay’s strategy for 2009 and beyond.

    Beginning in late October paper payments will no longer be accepted on the site. In other words checks and money orders are out. Buyers will either have to use PayPal, ProPay(similar to PayPal), or a merchants credit card processor. This will hit our category hard because since we sell collectibles there are many buyers who pay only with personal checks, cashiers checks, or money orders. You might wonder what will this change look like and how are they going to enforce it. In a few weeks when the new rules go into affect the option to select paper payments (ie check/money order) will disappear from listings and from eBay checkout. Sellers will be banned from soliciting in any way to be paid with a paper payment. So for example in listing descriptions buyers will be forced to remove any mention of accepting checks or money orders (this part of the rule will be phased in by January 2009). Even to this extreme – if a potential seller uses the “ask seller a question” option and requests that the seller take a paper payment – the seller is banned from posting that question to the listing since this would be in effect letting other potential buyers know that you are willing to accept paper payments.

    What if I want to continue to pay with check or money order? There is an exception to this rule. [FONT=Arial]IF the buyer initiates the question – can I pay with a paper payment? – the seller can then accept that payment or refuse without punishment from eBay. In other words the seller can’t solicit a paper payment but if the buyer is a loyal customer for example and the buyer requests directly to the seller to accept payment then eBay will not take action against the seller. However, I have already spoken to one large Boy Scout memorabilia dealer on eBay who said he is not going to risk getting in trouble with eBay and will not be accepting any paper payments when the rule goes into affect. As I explain below this bend in the policy may be temporary because eBay has a larger goal in making this move.[/FONT]

    There has been endless chatter on blogs and eBay Radio about this change. I won’t attempt to repeat everything I’ve heard or read about it. But I do want to mention one thing that I’ve picked up on because it gives a glimpse into the crystal ball of what eBay may look like in the very near future. The ultimate goal of these changes is to eliminate UPIs (Unpaid Items). This is one of the most frustrating issues on the site for sellers and eBay itself. I know as a seller I’ve had several times when a buyer indicated they would pay with a check or money order only to wait weeks for a payment that never came. Now that a seller can’t leave negative or neutral feedback that leaves the seller with little ability force payment from dead-beat bidders. So what does the crystal ball say about these changes – “Instant Payment”.

    Once the dust settles and everyone on eBay is using electronic payments look for the site to move to a system requiring or at least strongly urging instant payment. eBay designers are working feverishly to build mechanisms for this to work. What would it look like? Imagine a shopping cart feature similar to what you see on many e-Commerce sites such as Amazon and formerly eBay Express (soon to be terminated). A buyer would select items they want and then when they go to checkout and pay – the buyer would provide immediate payment via PayPal, credit card, or some other form of electronic payment. Failure to do so would effectively cancel the order and the items would remain for sale on the site. Therefore, UPIs would be eliminated because either the buyer paid for them at checkout or the purchases would be canceled. For this reason I think the leeway on accepting checks and money orders will be a temporary exemption. If eBay wants to get to the point where “Instant Payment” is the rule then that would be the final nail in paying with paper payments.

    Just in case you are curious at this time I have no plans to follow eBay’s lead and will continue to allow checks and money orders as an acceptable form of payment here at Santeeswapper.com. While my eBay store and this store are linked to some degree for the time being I have autonomy to run the store as I see fit and I’ve had very few problems from the Scouting collectors on the site with paper payments.

    By jason on September 29th, 2008 at 8:01 pm

    As a seller, I didn’t used to allow PayPal payments because I had to pay a transaction fee, and if the person paid with a credit card, I had to pay the discount rate too. On low dollar items, it was killer.

    Now if I’m forced to accept PayPal, I suppose I can simply raise my shipping fee to cover the anticipated payment associated fees. I haven’t checked recently, but can one restrict PayPal buyers from using a credit card so there is only the transaction fee to contend with? (i.e. The payment is coming from their bank account.) Would this drive away potential buyers who believe they need the added protection of a credit card purchase?

    By ISCA87L on September 30th, 2008 at 3:10 am

    well.. it would certainly drive away credit card holders who are *not* members of PayPal…. also i don’t think ebay allows any restrictions on a paypal payment….

    PayPal is still cheaper than your average merchant account…

    By hiker on September 30th, 2008 at 9:07 pm

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