Tuesday, August 19, 2008

eBay Announces Big Changes! Drumroll please!

I spent the day at eBay's San Jose Campus (quit laughing) and here are the changes that will be announced on Weds to the public.

If you are a Blog Utopia reader, feel confident you are one of the first to get this info. Though I think Ina Steiner and Chris and Sue at Tamebay have the info as well.

There are a lot of changes and rather than give you my 12% on each of them, I've decided to just list them, so that the info can get out quickly. I will post a follow-up with my 12% probably later this evening or tomorrow morning.

Fees: (Changes go live Sept. 16, 2008)
  • No changes to Auction Format fees. (All categories)
  • No changes to Store Format fees. (All categories)
  • Fixed Price items will now have a 30-day duration with GTC (Good Till Canceled) in CORE for a flat $0.35 per listing. (Exception is Media)

    Example: One FP (Fixed Price) listing with a qty. of 100 Ipods will be available for 30 days in core for only $0.35. Yes, that is correct, start price and quantity no longer add to the cost of a Fixed Price listing. With the current pricing you would have to pay $4 for a 7-day FP listing.
  • The Fixed Price FVF may go up or down, depending on the category. Each category has a different FVF percentage.

    Example: Computers went down to 6% FVF, Consumer Electronics went down to 8% and Media went up to 15%. I did not get access to the changes for each category in time for this post. These FVF changes are on Fixed Price items only.

Media Specific changes:

  • Media listings (CDs, DVDs, Video Games, Books, etc.) will have a $0.15 cent 30-day Fixed Price fee, but if a seller lists a FP item with the pre-filled catalog information, it will cost only $0.05 for each Fixed Price listing. (Again no matter what the start price or quantity available)
  • FVF will rise to 15%
  • Shipping and Handling will be capped in the media category.

    Example DVD's and CD's will have a $3 cap for S&H on domestic standard service. (This change will go live in early October. Video Games, Books will have a different cap. Media is the only category with a S&H cap at this time.

Shipping Changes:

Expect to see more promos going forward for the use of Free Shipping, including advantage in search and double FVF discounts on items with Free Shipping -- more details to follow.

Seller Standards:

Beginning Nov. 1st, sellers with a 4.25 rating on any of the 4 DSR ratings will be suspended. According to eBay, this is a very small percentage of sellers.

Payment Changes:

Beginning in late October, checks and money orders will no longer be an acceptable method of payment on eBay. Sellers can use a Merchant Account, PayPal or other acceptable payment method. (Don't even ask)

Finding 2.0 Changes: (I'll post more about this later)

  • Auctions will get their own Best Match sort with a heavier weighting on ending soonest, in addition to the trust factors and S&H.
  • Fixed Price listings will have their own Best match sort with limited to no weighting for ending soonest and the addition of Recent Sales History.
  • The two formats will still be displayed on the same page, but will no longer be sorted the same way. Basically, the current Best Match was not ideal for both formats.

Other bits of info:

  • Classic Search will be replaced completely by Finding 2.0 some time in 2009.
  • eBay Express will be shut down (no timeline).

I heard a lot of stuff today, so forgive me for the "Plain Jane" approach to posting this. I felt it was better to get the info out as quick as possible and it will take some time to analyze these changes.

I still haven't had time to do the math, but at first glance I can see some positives in these changes -- I know, I know, I must have spent too much time in the Sun.

There is a lot to go through, so I will follow-up this post shortly.

Just my 12%

20 comments:

Henrietta said...

I can see positives in the fee structure and more of the usual BS elsewhere. HOW can there be a S&H DSR for media with fixed shipping? A processing TIME yes.

I see media sellers caught between a rock and a hard place with eBay buyers, media mail they can ship 1# s-l-o-w-l-y with DC for $2.41 but first class a VHS with padded envelope will eat the entire $3.

Amazon buyers are more realistic.

Tony P. said...

Randy, were you the entire audience for this meeting? Perhaps you were blindfolded and led to a room? You didn't drink the koolaid, did you???? Man, you is one brave soul - I wouldn't put anything past them.

Anyhoo - seriously - that Payments thing will be a real thorn to many. Mostly the auction sellers, and mostly of mid-to-high dollar collectibles. They don't risk chargebacks (as in, they stopped taking Paypal long ago), so this will just be another "sign that auctions are dying".

As far as Finding 2.0 changes go, it sounds like some good news for the collectibles sellers, with a more auction-centric BM. Which brings us to the pearl of your post (IMO)

This quote - priceless! The two formats will still be displayed on the same page, but will no longer be sorted the same way. Basically, the current Best Match was not ideal for both formats.

Working backwards... Big Duh... and... still sounds like it's gonna look helter-skelter. I'm still chuckling over that "not ideal" term. Where they looking at their feet and shuffling them when they said that? :-)

Thanks for the excellent post!

Mike G said...

Randy, thanks for the heads-up. A lot to think about in both the small and big picture, but, as always, we will not really know until it all hits the fan in the coming weeks.

ms.pat said...

I'll reserve judgement until I see this plan in action. I have no idea how, or even if it will affect what I list. Certainly most of us would do fixed price listings if we can get 30 days worth at a clip. My gut feeling at this point is Ebay has been hurt bad or they'd never give even this much to the sellers. Up till now we've only been a herd to be milked for revenue and otherwise ignored.

Randy - thanks so much for bringing this to us.

Randy Smythe said...

Hi All, having a heated discussion about these changes over at Twitter but didn't want to fogrget you guys and gals.

Henrietta,

Media guys will have some challenges with this, because many of them use Stores right now. The S&H cost DSR will trend positive when everybody has set shipping, at least that is the thinking.

Tony, I tried to stay away from the Koolaid. I told them I didn't think the two (auctions and FP) could co-exist. We shall see. At least they are treating them differently.

Mike G., yep it will take some time to digest this.

Pat,

If they don't improve the demand on the site none of these changes will work. I sat there and looked them in the eye and asked tough questions and they answered them honestly.

Anonymous said...

Randy this is terrible for media sellers AND ebay. The exodus of quality items to Amazon will continue because it is now much cheaper AND less work. It's only worth paying ebay fees now approaching 20% on junk.

30 day FP will not work on average items because ebay buyers do not have a sense of urgency like a 7 day listing.

Eliminating checks/mo right before christmas was a nice touch.

nadine said...

Randy, do they intend to kill off the Stores format? I don't see why I shouldn't move everything out of the store into Fixed Price format at a flat .35/mo. Especially if the FVFs remain equal or lower than Store FVFs. Only for the very cheapest items would the lower store monthly fees make sense - for multiple qty items, or just expensive items, why would you want a Store anymore? The good news is that this is sort of like SIS, only bassackwards.

Thanks for the heads-up. Whether it works demands on demand on the site, which a slew of changes doesn't help, even if they work.

nadine said...

I did the math to compare the new fixed-price fees against the current store fees, using the 12/6/2 fvfs of 'everything else'. At every price point, the new fixed-price fees work out to a 1% to 2% higher take rate than current store format. Is it worth it? If there is a higher conversion rate, yes. Otherwise no.

Anonymous said...

"30 day FP will not work on average items because ebay buyers do not have a sense of urgency like a 7 day listing."

Initially, I really liked the new changes because Fixed Price is my favorite way to list. But the above poster makes sense. Will see though if this proves true. I have a feeling it might.

Randy Smythe said...

Nadine,

The Store sellers will certainly have to re-evaluate their listing strategies.

If they do not go to the new FP listings, then they risk even less exposure than before.

Some categories fair better than others with the new fees.

Anonymous said...

This is horrible for media sellers who are SUCCESSFUL on EBAY and have high conversion rates. Why am I punished for a good conversion rate while others who put up 1000 dvds at a time and hope 100 sell are rewarded?

Why would they eliminate the 7 day fixed price? Why just have 30 days? There is now no incentive for customers to buy if everyone has 30 days. I'm signing up for Amazon today.

Anonymous said...

Also, no more checks or money orders? There are a lot of customers who dont want to use paypal and feel safer using others forms of payment.

Nice, keep on giving more to Ebay. Why can't they make these corporate idiots who are trying to change Ebay into Amazon become powersellers before they try to change Rome overnight??

Anonymous said...

The successful sellers is NOT disadvantages.

The sellers who has sold more of an item get BETTER placement, and hence another sale!

Those who are occasional sellers (or sell items with low sell through rate) are going to be in trouble and their items will never even see the light of day.

Randy Smythe said...

Anonymous,

That is the case for Fixed price items now with the Recent Sales weighting in Best match. If your listing sells well then you will be advantage over your competitors like product with less sales.

Anonymous said...

Yes, but from my experience when I have one DVD with say - 30 available, buyers perceive my listing and price as not as attractive since so many are available of the same item. With the new EBAY search tool buyers will now only be able to see 1 listing of each DVD from each sellers, am I correct? Thanks

Anonymous said...

Off Coment -- Does anyone know of any consultants that can give advice on starting a separate on line DVD business (outside of EBAY/AMAZON?

Randy if you know anyone offline email me and I would greatly appreciate it, thanks!

Randy Smythe said...

Anonymous (Second to last)

Basically a seller will create a listing for a DVD and fill that listing with as much inventory as they have available. Now if there are 30 sellers selling that DVD there will be only 30 listings. (in theory)

Tony P. said...

What Anonymous states about showing a quantity of 30 and it being perceived a certain way by the buyer, is part of that loss of 'sense of urgency'.

When I first heard about the "10 max viewable" and 1-dup rules, it was obvious that ebay doesn't understand their own business.

Next up will be the catalog page view, like Amazon, where all sellers of the same SKU share a common pix and title.

ho-frinkin-hum. all the same. mono tones. window shopping in a gulag. Not to say that it doesn't work - it works AOK for Amazon.

But... the ebay buyer expects something different. We all know that. How about the folks at SJ, do they know that? I'm guessing, NO. Or, they actually believe they can change the entire ebay image and the buyers will accept that?!

Someone needs to tell the Ebay Elite that they can shed their ingrained, public image as easily as they can regain the trust of their seller community.

They appear to have zero business acumen when it comes to the psychology of buying. They have proved that time and again by removing all of the Fun things that made ebay, ebay.

They Improved Things until auctions can't take any more damn improvements. Now, they've turned their attention to FP. Good Luck!

Brian said...

Randy, did the EBAY ELITE in SJ seem to give a reason as to why they are changing media in such a drastic way?

Sales down? Did you speak to Suzanne Scott about all this?

Randy Smythe said...

Brian, I haven't talked to Suzanne but the sense I got is that Media has greater margin issues than most other categories so they got the best listing fee structure.

If you listed in core this may be a saving but if you were 100% stores than this is a fee increase.