Thursday, January 28, 2010

eBay changes - what do they mean for vintage sellers and the auction format?

I've had a couple of days now to digest eBay's first announcement of 2010, and to hear what other sellers are saying about how those changes are going to affect their business model. I've taken some time to crunch the numbers for my own business, and to try to figure out at least a basic plan for how I am going to handle the new structure.

I have a few thoughts about how the new stores in core change, as well as the new fees, could impact antiques and vintage collectibles sellers, and there are a few things we might need to consider changing once April 1st rolls around... But, let's start at the beginning.

I think it is safe to assume that for most vintage sellers, fees are going up. How much they are going up is the question - and that depends on how you handle the new structure, and how many items you list or have in your store on a regular basis. eBay's fee illustrator is helpful if you haven't tried crunching the numbers yet.

For me, with 800+ store listings, upgrading to the Premium level and getting the $0.05 listing fee is a no brainer - I'm looking at about a $50 a month increase, but when you subtract $15 for Selling Manager Pro, which is free with the Premium level store, it is really only a $35 increase.

Not too bad - in fact way better than what I was expecting! When you add into that the reduced auction listing fee, the extra $35 becomes even less depending on how many auctions I run a month.

But here is the thing that I have really been pondering the most in the last day or so - why do I run auctions?

The Benefits of Running Auctions

1. Bidding wars - On highly desirable and/or rare items, bidding wars can drive the price of an item up significantly.

2. Exposure for items in Core search - Auctions show up in the main search, where they get more exposure, and also help drive traffic to your store inventory items.

3. Best Match - Auctions get a boost in Best Match toward the end of the listing period.

4. Lower final value fee - 8.75% vs. 12% for store items

Now, what is changing with the new store items in Core scenario? Well #2 ceases to be a benefit of running auctions right off the bat. #1 is a pretty rare situation these days - the majority of my auctions end with just one or two bids.

Side note on the free under $1.00 starting bid auctions - who starts their auctions that low anymore? It's too risky, unless you have a super rare item... I rarely start one under $9.95, and only if I can live with the item selling for only $9.95!

Anyway, here's my point. With store listings in Core, running a ton of auctions might not be so necessary anymore. Unless you are fairly sure the item will get more than one or two bids, why not just list the item for a fixed price? You can even price it high with a Best Offer option and still end up doing well, and for a $0.05 per month listing fee rather than a $0.25 per week listing fee...

Lets do a bit of math and see how it breaks down - lets just do a $9.95 item:

$9.95 start price auction - $0.25 to list, 87 cent final value fee
$9.95 start price FP30 - $0.05 to list, $1.19 final value fee

So for $0.32 more, your item is listed for a full month, rather than a week. Subtract the 20 cents difference in listing fees, and that number becomes $0.12.

See what I mean? When you factor in the fact that you can probably sell that $9.95 item for $11, $12 or even more at fixed price (I do it all the time - auction for $9.95 ends with no bids, but item sells out of my store for higher later on down the line...) then the auction is pretty pointless.

But, #4 remains a viable reason though - auctions do get a bump in Best Match toward the end. The question is if that bump is worth it or not, in the grand scheme of things...

Remember in my last post when I said that we were in for some serious math, and a re-thinking of our business models? This is what I mean! I still haven't worked it all out, and it could all change once we get into it and see how things are going to sell once all items available on the site are listed together in Core.

What I do know for sure is that it is time, now more than ever, for every one of us who sells uniques on eBay to take a long hard look at why we do it, what level we want (or need!) to be at, and the bottom line as far as dollars and cents goes compared to the time, effort and energy it takes to sell on the site. The answers - and numbers - will be different for nearly everyone - I referred to my own situation here only because it is what I know and understand the best...

I hope throwing a few of these things out there is helpful to some of you - and I would LOVE to hear your thoughts about the changes, and your own plans for dealing with them - feel free to leave a comment or ten ;)

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Saturday, January 23, 2010

New round of eBay changes coming Tuesday, January 26th!

If you are a regular seller on eBay, you have probably already heard that the first round of eBay changes for 2010 are going to be announced this coming Tuesday. If you are like me, you've spent at least a little bit of time the last few days poking around for info, trying to get at least a general idea of what is up eBay's sleeve this time...

The main one that I have heard that has me the most worried is that eBay Stores will be moving more toward the way they have them set up in the UK. Sellers pay for a certain level of store, and that level dictates what your FP30 listing fee is. Get ready to do some serious math, people - there won't be any way around it, since it is probably going to work out to be a fee increase, no matter how eBay tries to spin it.

Auctionbytes has done a couple of posts, about the upcoming changes as well as about the 4th quarter earnings report. Ina's Stores prediction seem to have some weight, when you consider some of the things CEO John Donahoe said in the earnings report:

Ina Steiner:

"We're still expecting eBay to make changes to Stores this year, possibly along the lines of what it did in Italy and the UK, where it kept Stores, eliminated Store Inventory Format, and introduced a 30-day Buy It Now (BIN) fixed-price format with special rates for Storeowners."

John Donahoe:

"So I think what we’ll do in 2010 is take some of the learnings (did he mean lessons? -M.) that we generated outside the U.S. and apply them as appropriate and as tailored to the U.S. market. I think we feel we’ve proven out some of these things outside the U.S. and they will apply inside the U.S."

"But I feel good that coming out of 2010 we will have the structure and alignment of our pricing in the marketplace that is aligned with sellers and optimized for marketplace success."


Also interesting are a few of the comments from sellers on the Auctionbytes blog. I'm not talking about snarky, "death to eBay!" comments either - but real, thought provoking opinions. A couple of examples: means nothing to the powers that be anymore. It's an afterthought. They are drunken with glee, doing a happy dance around the firepit while eating greasy porkchops. ''Paypal, paypal, paypal, skype sale, $$$$$$$, YOY, Oh, not doing great this year? Oh, well. Yawn.''

Yes, the fees will go up, and the stores will either be discontinued or under a fee structure that more closely resembles Fixed Price. Those that can't hack the new listing fees will drop out. This is a war of attrition. Small sellers will continue to be squeezed out. Demand more perfection of the middle size sellers and they will be squeezed out of more profit. Have your pride and joy Paypal hold their money for 21 days. Keep this up and your will be ALL megastores. And you know what? It doesn't matter to them. That's what they want. They don't care about the medium and small sellers. We're just a thorn in their sides, reminding people that they have taken the original eBay and killed it. They're not into nostalgia. They're into CASH.

and this...

Thank you, Buck. I read the cnn article and I don't think that eBay management even gives a whit about what they have lost in marginalizing their sellers. This is what JD set out to do 2 years ago, and 2010 is his big growth year and he will continue marginalizing us.

But the stupid thing is that, with absolutely NO creative thinking, they procured all these megasellers to come on eBay and stuck them in the 'regular' people's auction/buy it now format. So now we have a ridiculous looking site with what used to be chock full of unique item after unique item -- now loaded with picture after picture of the same identical item, as if someone is really going to browse through that. That is why the buyers are dropping off. It's annoying to shop on eBay. They're trying to make it a buyer friendly marketplace but forgot to consider that factor.

I definitely fit into the "small" and "unique" category - as most of you who are reading this do, buyers and sellers alike. Our eBay seems to be pretty low on the priority list, and only on the outskirts of the "big vision" at best. So any upcoming changes are most likely going to be ones that force us to really evaluate the way we do business on eBay - or, worst case scenario, if we can even continue to do business on eBay and make enough profit.

I'm sure I will be back here posting again after the announcements are out - I have a funny feeling there is going to be a lot to discuss!

Friday, January 8, 2010

Member Spotlight - Judy's Gems

Your Name: Judy Dunn

Your Links: JudysGems
Blog Link:
Over 40 years (since 2000 on the internet)

What made you decide to start selling online?

A friend of mine introduced me to e-bay and we started selling my vintage costume jewelry on our site two crazy girls.

What are your favorite ways to find items for your shop?

Online, antique shops, estate sales, flea markets, garage sales, my pickers, and friends.

What types of items can usually be found in your shop?

Costume jewelry, designer signed, antique, Art Deco, and retro by Hattie Carnegie, Chanel, Har, Ciner, McClelland Barclay, Coro, Trifari, Jakob Bengel, Bakelite, Egyptian Revival, Czech, gold, diamonds, silver and many more!!!

What are your goals and plans for the future?

To continue in a progressive direction making our online stores a full time business and maybe to write a costume jewelry book or price guide.

If you could give one piece of advice to a seller who is just starting out, what would it be?

Be prepared for some hard work.

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