Friday, August 22, 2008

My Podcast with Ina Steiner - eBay Changes 8-20-08

If you are interested in my 15% on these recent changes and want to actually hear me talk about them, then go to http://podcast.auctionbytes.com and click on the top podcast.

I have to warn you it is longer than most podcasts (18 minutes) so make sure you've had your coffee. We don't cover all of the changes but I think it still might be interesting for you. Please no critiques of my picture or radio voice; I can be very sensitive :)

Just my 15%

12 comments:

nadine said...

Good interview, Randy. You sound just fine on radio.

One very mild critique - your answers are all media-centric, naturally enough. So you concentrate on the media category and the lowest tranche.

Ebay has raised the $50 - $1000 tranche for nearly all categories. Currently in Stores, its 8% for the first $50, then 4% for $100-1000. So raising it to 4.5% - 9.0% for all except the favored Computer category (which gets 3.75%) is a signficant increase for anybody who sells expensive items. In Everything Else, it is 6%. In Clothing and Parts and Accessories it is 9%.

Maybe you can explain why eBay has decided to love computers and hate clothing. I don't get it.

I predict that the Finding 2.0 buyer experience is about to be "enhanced" by tons of listings showing up in cheaper categories than the ones they really belong in.

Cliff Aliperti said...

Good work. I think this was your best job of explaining auctions vs. fixed price, I had less to argue about listening to you than reading you!

David said...

My fear about these changes is that prices are going to go up across the board and eBay will nolonger be considered the place to get deals.

Amazon was known for providing a great buying experience.

eBay is known for bargain hunting.

If you take away the bargains, then to me eBay is just another marketplace.

Randy Smythe said...

Thanks Cliff!

Nadine,

Yeah, I've spent most of my time looking at the media category this is true.

Here is the problem. If you are currently selling in CORE with FP you save money up front so there is less risk and you pay more on the back-end. Ultimately you will pay about the same in total fees.

If you move from Stores to CORE you will see a fee increase but you should also see higher sales so your total sales should increase.

There are going to be way to make this work as long as the FP Best Match works properly.

nadine said...

Randy, you said

If you are currently selling in CORE with FP you save money up front so there is less risk and you pay more on the back-end.

That depends heavily on your conversion rate. If you priced to sell the average item in 3 weeks or less, the new FP rates are a fee increase. If you sell in one week, the rates are a BIG increase. Unless you're selling Computers.

So more stuff will move to auction format (until their FVFs rise to match FP - I regard this as 'when', not 'if') and prices will rise to absorb the higher fees and lower shipping.

Randy Smythe said...

Nadine,

There are certainly ways to make this work. It should be easier to price becasue you have a fixed amount for listing $0.35 in most categories and a fixed FVF up to $50 If you price for a single conversion in 30 days you will be safe. If you have multiple qtys of that item you may sell more.

Bill said...

Randy, I listened to your podcast tonight. I tend to agree that not all changes were bad. I am a powerseller in the media category so that is my primary concern with the changes.

I actually do not have a problem with the fixed shipping rate, with the exception that their explanation of how they arrived at it was fairly lame and it is probably about $1 to low.

What I do have a problem with is the new fee structure. If they were trying to copy Amazon, they sure blew it. Due to Paypal fees, a $20 item now cost you over 20% to sell vs. 15% on Amazon.

I was really shocked at the large fee increase. I think they do not understand the media marketplace. I have long argued that Amazon charges 15% mainly to keep away serious competition.

You more than anyone know that the dvd category operates on thin margins. ebays new fees have done nothing to bring new merchandise to the site as they claim.

Most of us do not buy direct and have to negotiate pricing with a distributor. My 2 suppliers give me cost plus 5% and cost plus 6%.

Lest do the math. Hawail Five O season 3 cost me $31.50 and has a $49.99 retail. Now to make money with a $3 ship cost, that title will have to be listed at about $45. It currently sells on Amazon and most of the net for around $38. That certainly does nothing to make ebay a competitive marketplace.

Likely what I expect is that those that do hang on in the media category will operate on the "I am happy if I make $1 and sell 500 items a week" mentality. Thus leading to even more bottom feeding on an already flat marketplace.

Bottom line is ebay does not get the media category and it will be difficult for it to thrive again under this setup.

Randy Smythe said...

Bill, you are correct, media prices on eBay will be going up.

What's interesting is that my original model would work today.

I charged 25% off of list price and $3.95 for the first DVD in the order and free shipping on other items ordered.

I could make $2.95 for each DVD work, but this won't make them competitive with Amazon.

I'm just concerned about the deman on the platform.

Bill said...

Randy, you could actually buy cheap enough to pay 15 to 20% in fees and still sell at 25% off list and make a profit? You must have had some killer pricing.

I thought I was lucky to get cost plus 5%. You must have bought a lot direct.

Randy Smythe said...

Bill, well I don't want to give away my secrets. BTW, I didn't buy direct. I bought through distribution which caused problems when the price wars happened.

Had I bought direct I would still be selling new stuff.

Bill said...

No prob Randy, I dont expect anybody to give away secrets. I would be interested someday in having a chat with you about some general things with the industry.

Randy Smythe said...

Bill,

My email address can be found on my blog profile.