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Ebay's 911 Attack on Sellers

Ebay's 911 Attack on Sellers

Feebay attacks again

Ebay is on the move again to make you love to hate it. In an email to all sellers ~ an email that is an insult to our intellect ~ they are announcing that as of 10 September 2009, they are providing "improvements" to their Australian ebay sellers with their "new Stores packages". So really, though they have tried to avoid the exact date, it is a 11 September attack where ebay has taken the leading role of being Osama bin Ladin.

They couch their changes in deceptive terms of "offering" us "volume discounts and value you've been asking for."(WHO? WHO has been asking for these changes? Not me, that's for sure and it must be an imbecile who would actually ask for such changes as they are telling us they will be imposing.) And certainly they are not "offering" us sellers these new Stores packages ~ they are "imposing" it on us. Just like they did in the past with the 500% price hike a few years ago, like they imposed on us sellers the inability to leave feedback about our buyers, like they tried to impose on sellers the inability to offer any other payment method but the ebay-owned PayPal option (but thanks to the intervention of Australian ACCC, they failed in that devious ploy).

In the supposed "Community" ebay Forum at: http://forums.ebay.com.au/topic/Big-News-Changes/New-Fees-Huge/500112554&start=0, where some discussions are starting amongst more alert sellers, I posted the following reply to the post "New Fees = Huge increase for small sellers!". My post below was removed by ebay within 20 minutes of my posting (If only their Customer Service was as speedy and as efficient, one could almost forgive them their continuous, increasingly underhanded price hikes. But as I said before, ebay Customer Support is a Joke.)

Everyone here is so right but not vehement enough I think. If the economy was bad before or sales have been slow and fees have been a killer, then this really is, as someone noted, our 911. A massacre.

Ebay response here:
"We believe that the changes will be of benefit to the majority of sellers and more importantly it will ensure that eBay.com.au is not left behind by rapid growth in demand for Buy It Now listings.

With the changes coming into place in eight weeks time, we believe that sellers will have plenty of opportunity to carefully crunch the numbers and create a business strategy that works for them. Be it with or without a Store. "

What a joke! And what sneaks. What did ebay's subject line say? "News so big we don't need to shout"? What a hoot. The only reason they are not shouting is because they have to announce the changes but would prefer if it could slip under everyone's radar as much as possible.

It is like a magician's trick - move this hand so that you can't see what the other hand is really doing.

Better search results/placements? "volume discounts"? "Most Insertion Fees are being lowered while some Final Value Fees are slightly increasing". This is all a joke. At the end of the day you will find that you will be paying a whole lot more. Because the reverse is true .. i.e. very few FVF are being lowered and most of our insertion fees will increase.

Thanks sincomau for the detailed breakdown. BTW, the increase to Anchor store fees is $200. No small amount either.

With the Basic Insertion Fee of 40c, it is virtually imperative that you can only have a few items up on ebay knowing full well that a significant percentage of it may not sell. So if you have all your eggs in one ebay basket and don't have another outlet, you might as well be dead in the water.

forevayoung_vinatage said "ebay is FORGETTING that the majority of sellers on here ARE NOT powersellers and/or do NOT list multiple items to warrant 40 cents a listing." In fact, the sad truth is that ebay has NOT forgotten about the majority of sellers. They just don't care.
In the time I have been on ebay I have seen them make 2 previous outrageous price hikes and autocratic demands on us, their customers. And always there was an uproar with sellers and sometimes buyers claiming that they would leave ebay (me included). Ebay has learnt that they can virtually ignore these uproars as they win in the end.

Why? Because their competition out there is not strong enough. 
magical*books said that they had moved all their listings over to the "O"ther side. I suggest we all do the same. It is like living in a despot country - the only way we can have effective change is for THE MARJORITY of us to move in the one same direction - i.e. away from ebay.

The main reason why sellers like me who have moved before and then returned is because the market reach of ebay is still much wider than any 'O'ther auction/selling site. Maybe if we all did it so that the market has to move with us ... then the 'O'ther side can grow. It is going to hurt for a while ... but staying with ebay will hurt much more (as I keep learning).

For those of you who think they will have to revise their business plans so that they can remain viable ... let me just say that with ebay, that is only a temporary solution. They will do this again and again.

I once had 2 stores and was a silver power seller. Now I have an ebay store only as another means of outlet. If you want to survive, you CANNOT RELY on ebay - they are heartless. And it is a true insult to injury when they claim that this is something for the benefit of all, that most fees are being lowered, that most sellers will come out on top. You can bet your last dollar that they have had mathematician/statisticians/actuarians crunching out their figures to ensure that they come out on top.

Huh .. I actually thought when I got their email that they had finally learned and changed and was actually back on the "good" road. Fat change.

Come on people .. let's all EXODUS en masse. It is a WHOLE LOT CHEAPER on the 'O'ther side.

And here is a breakdown worked out by seller sincomau in the same discussion board thread mentioned above.

SUBSCRIPTION FEES:

Basic: $19.95 (Increase by about $5?)
Feature: $99.95 (Increase by about $50)
Anchor: $499.95 (not sure) (ClearlyChosen personal comment: this has increased by $200 per month ~ so no small sum either. And do note, these are MONTHLY, not yearly fees.)

Bin for Basic: 40c (x4 increase)
Bin for Feature: 30c (x3 increase)
Bin for Anchor: 10c (no change)

FVF for Basic: 7.9% (Drop of 2.1%)
FVF for Feature: 7.4% (Drop of 2.4%)
FVF for Anchor: 7% (Drop of 3%)

If you sell over $75 item then yoor FVF drop another 2.5-3.5%

If you sell for over $1000 then there is an additional drop of 1%

So FVF good for high end sellers.

For a $9.95 example...

BASIC COST: 40c + 79c = $1.19 (vs $1.06)

FEATURE COST: 30c + 74c = $1.04 (vs $1.06)

ANCHOR COST: 10c + 70c = $0.80 (vs $1.06)

The problem comes about from any slow moving stock.

BASIC (1000 items): $400 (vs $110)

FEATURE (1000 items): $300 (vs $110)

ANCHOR (1000 items): $100 (vs $110)


Costs to operate a Basic Store now appear to have easily quadrupled

Feature seems to have more than doubled and are now almost 3x what they were (with negligable change to cost of items that sell which roughly match current...the killer is the insertion)

Anchor fees have dropped marginally over all and are the best value on this front.

Summary

One does not have to spend hours to work out the specifics and variables. The bottom line is, if you are a seller, you have a 99% chance of being "offered" to death by this new ebay move. If we decide to continue to be ebay's customers (what a joke), we are in essence, deciding to work for them at reduced income and soaring fees. And if anyone is foolish enough, as I have been on more than one occasion in the past, to think that if I can only modify my pricing/business structure and if I can survive this, I will be all right ~~ let me tell you now that is an empty pipe dream. Every year or so, ebay will continue to do something outrageous which leaves anyone who is objective and thinking clearly, to have to conclude that surely ebay must be trying to kill itself in the long run.

What to do if you are an ebay Seller?

Here are some suggestions. I have been with ebay since 2006. I have had 3 stores on ebay over that time. One had a Silver Power Seller status, the other a Bronze. I might not have seen all of ebay's descent to what they are today but in the time I have been with them, after thousands of transactions and many more thousands of dollars paid to ebay ... I think I certainly have a little insight of what one can, or at least, should do.

  • If you have not selling on ebay ~ DON'T! The hardest part is not the starting or the few fees you might have to pay to try and sell a few items. It is when you plan on ebay as your stable platform and so start on a process of investing a lot of money, time, effort, and thought. Before you know it, you are paying a few hundred to a few thousand per month to ebay (for being what is only a small to very medium sized seller) and worse, you have a huge amount of stock. Then when ebay pulls one of their stunts, you feel you are in quicksand. You can't pull out because of your heavy investment (some have even given up jobs in the false belief that ebay can sustain them for the long haul) and you can only go on by increasing prices and losing customers, or by working even harder than you already were.
  • If you are already selling on ebay and own a store ~ if you can, pull out now. It only gets worse and worse each year. And if you don't believe me, then you will have to do what I have done ~ spend the next few years learning the hard way with your hard-earned dollars.
  • If you are selling on ebay but cannot pull out ~ start today to make plans to diversify. Even if the planning is just in your head, start today. There are still other sites like Oztion (for Australians) which, though it has not grown as big as ebay, does offer you a HUGE cost differential. And they do not charge for listing fees ~ which is really where the Killer cost is (or biggest money earner - if you are ebay).
  • Other options are building your own website. Yes, all this will take time and effort as well. But believe me, in a year's time, you will be in this same situation again with ebay doing another thing that cuts into your heart and profits and sustainability ~ and if you have none nothing about moving away from ebay ~ you will be in the same trap as you are now, only worse. Because really, if you are like me ~ working 10-12 hours a day, how many more hours can you work?

I really believe that ebay has grown into a mega monster without heart. But I can't say we need to be too surprised as most organisations, when they reach the listed-on-stock-exchange size, they are just dead-hearted greedy monsters with eyes only on profit. So if the other sites have any chance to help us small sellers out, then we need to move en masse. Just like ebay grew on people-power, like Iran having a chance for their future based on people-power, like the toppling of the Berlin wall, and on and on ... it must come down to all the little people moving in another direction that is better for them. And that direction has to be away from huge money-hungry monster that ebay has now become.









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