eBay have just announced a pile of sweeping changes to be introduced in September and October 2008. We’ve provided a summary of the changes below along with our comments. You can read the full announcement here.
Fixed Priced Fee Insertion Fee Goes Down
The Fixed Price listing insertion fee goes down to a flat rate of $0.35.
Listings with Multiple Items Charged at Flat Rate
Fixed price listings with multiple items available will no longer be charged on the total opening value. You can now offer unlimited multiples from one fixed priced listing at the flat rate of $0.35.
Comment: Larger sellers listing multiple fixed price items get a significant advantage over smaller sellers listing single auctions.
Fixed Price Final Value Fee Changes
How Have Your FP Final Value Fees Changed This Year? |
|||
| Category |
January 2008 |
February 2008 |
September 2008 |
| Computers and Networking | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 6.00% T2: 3.75% T3: 1.00% |
| Cameras and Photo | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 8.00% T2: 4.50% T3: 1.00% |
| Electronics and Video Game Systems | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 8.00% T2: 4.50% T3: 1.00% |
| Books, Music, DVDs, Movies and Video Games | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 15.00% T2: 5.00% T3: 2.00% |
| Parts and Accessories | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 12.00% T2: 9.00% T3: 2.00% |
| Clothing, Shoes and Accessories | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 12.00% T2: 9.00% T3: 2.00% |
| All other categories | T1: 5.25% T2: 3.25% T3: 1.50% |
T1: 8.75% T2: 3.50% T3: 1.50% |
T1: 12.00% T2: 6.00% T3: 2.00% |
See full details here: http://pages.ebay.com/sell/August2008Update/BasicFees/
New Fixed Price Listing Duration of 30 Days (up from 7)
Comment: eBay believes that buyers prefer instant gratification over low prices so this is even more incentive for sellers to move away from auctions to fixed price. This change may also cause sellers to move listings from their stores back into the core.
Media Changes
- Insertion fee for Books, Music, DVDs & Movies and Video Games drops to $0.15.
- Holiday promotion promised of $0.05 insertion fees.
- Shipping charge limits introduced in the Media Category.
Comment: eBay wants to give Amazon a run for its money in the Media category, which is why insertion fees have become way more competitive (Amazon’s transaction fee is $0.99). Although the final value fee has gone up, it is now on par with Amazon’s 15% final value fee. As for the shipping charge limits, sellers will be forced to increase their product cost to make up for any additional profit they used to get on shipping – the question is, will the market adapt to this change?
Incentives for Offering Free Shipping
Sellers offering free shipping will be able to add a subtitle (worth $0.50) to their listing for free. Free shipping will also give you an automatic boost in the Best Match search results.
Electronic Payment Only
Non-electronic payments (check, money order etc) will no longer be accepted. Sellers are left with three options: Paypal, ProPay and a merchant account.
Related: Top PayPal Alternatives
Comment: Quite a lot of panic about this change from some sellers, but we believe the trend for electronic payment is universal and will soon be accepted as standard practice.
New Seller Standards
Sellers will need to maintain at least a 4.3 across all four DSR categories in order to list on eBay. Drop below this number on any one of the four and your eBay career will be in jeopardy.
Search Results Altered
Your sales history will now affect where your listings rank in eBay search results. The more repeat sales you get, the higher your search ranking.
Comment: This change favors larger sellers because fixed price listings offering multiples helps to dramatically improve your recent sales history.
What Does it All Mean?
eBay’s aim is to force sellers to rethink the way they sell and push those selling multiples of consumer goods (in other words, the majority) to the fixed price format - leaving auctions to sellers of one-offs and collectibles. However, the precise impact of these changes will depend on your sales strategies and turnover. Channel Advisor’s Scott Wingo works through a couple of examples to show that your conversion rate and average selling price play an important role in determining whether Fixed Price or Auction format will be more profitable for you in the future.
In general, smaller sellers will find it even harder to get visibility on eBay, especially if they only list a few items at once. Finding niche markets will therefore become more essential than ever.
Larger sellers will benefit most from these changes and eBay may even attract some of the bigger media sellers from Amazon with their competitive rates.
As usual, eBay’s examples don’t give the full picture, so before you can be sure how you will be affected, you need to sit down and do the figures for yourself.
