Saturday, January 05, 2008

I Need Your Help!

I'm working on a story regarding eBay's NPB (Non-paying bidder) rates. I've heard from several sources that they are increasing.

If you are a seller, please email me or use the comments section to provide information on your NPB rates Y/Y, so I can gather some data. Also, if you are a regular on the eBay message boards and can solicit this info for me that would be great.

Here are my chief concerns:
  • Is eBay counting these non-paid orders in their calculation of GMV? A 10% NPB rate would reduce the GMV for 2007 from an estimated $60 Billion to $54 Billion. If the seller does not follow through and request a credit then eBay never knows if it was paid or not. eBay management wouldn't care because they still received the fees. Perhaps their published numbers for GMV are inflated much the same as their registered member numbers.

    This might not mean much to investors, as long as fees are collected, but it does affect the perception of the marketplace and growth of GMV

    When I was selling we did not file for credits because, with our volume, the process was too tedious, so we just factored the cost into our numbers. We did eventually automate the process but that ended up increasing our customer service time.
  • How many sellers follow through with the tedious credit process? Even if they do, they only get the FVF credited, not the listing fees.
  • Has the introduction of sponsored ads helped increase the NPB rate? With so many alternative sponsored links available to the buyer, are they making a purchase on eBay and then clicking through a sponsored ad and never completing the eBay transaction? eBay gets the listing fee, maybe the FVF fee (if a credit is not issued) and the revenue from sponsored links - what a business. Unfortunately, the only one who could track this is eBay and somehow I don't see that happening. File this concern under wild speculation.
  • What is the increase in NPB rates attributed to? Is it buyer remorse, high S&H, Sponsored links, etc. ? The number of factors make it almost unmanageable for the seller.
  • If a seller chooses immediate pay, there is a double digit abandonment rate, so while they never have an NPB their sales are affected.
  • If eBay required Immediate Pay how would this affect their GMV numbers?
  • NPB's greatly affect seller economics and are another reason sellers are moving to other marketplaces like Amazon.

    During Glacier Bay's best year on eBay we did $4.6 million in sales but when NPB's were factored in, we should have done $5 million.

Are my concerns overblown? Please let me know what your experience has been.

Just my 5 cents.

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