Archive for September, 2007
Written by Steve Grossberg, IMA President
If you listened to the BSC/IMA conference call on eBay you would have heard us talk about finding 2.0 on ebay. This will be a huge change for buyers and sellers on eBay. Ebay is still doing a lot of A-B testing and now is the time for us to do our own testing and make some noise on the good and the bad we see so far.
If you have not tested this find 2.0 for your own items, I encourage you to do so as soon as possible. You can get to the ebay playground by clicking here.
The playground is finding 2.0. The finding 2.0 experience is getting rolled out to ebay.com now. In my category 20% of buyers see the new search and this is true in 3 other categories as well (not sure which ones). In other categories it is only seen by a very small percentage of buyers, but all categories will eventually have increased exposure to finding 2.0.
Let me walk you through a search I just did in my category.
First have 2 browsers open with one at
http://www.ebay.com and one at
http://playground.ebay.com/
In the search box type or copy and paste for both sites
xenosaga 2 ps2
Notice the huge difference in search results. On ebay.com it pulls up 100 results for me. On the playground or finding 2.0 I see 3 different Xenosaga games presented to me titled “best match” – all with photo images.
As you can see the second item down is Xenosaga 2 or actually Xenosaga II. It has only 37 items listed total as indicated there on the search results. So again on ebay.com we had 110 items appear and on the playground 37 items. So finding 2.0 eliminated the 73 items that were not actually the item buyer was searching for Xenosaga 2.
This is extremely positive in my view as it cleans up the clutter.
You will notice under the 3 items presented for best match are listings combined for all 3 best match items or sort of like the view buyer sees on ebay.com, except this search eliminated items that were not the actual video games, like action figures and strategy guides.
Now click on the Xenosaga 2 under best match
You will see some information regarding the game like platform, publisher, release date etc. Again very good information and presentation IMO.
Now you also see this.
What is it Worth?
Just Sold on eBay: $0.01 – $19.95
Suggested List Price: $13.89
This is horrible in my opinion. First off where does ebay come up with the suggested list price of $13.89. This is misinformation and totally wrong. No video game on the market today has a MSRP of $13.89, but notice ebay does not say manufacturers suggested list price and only says suggested list price.
What is suggested list price, eBay’s suggested list price? Where do they get this information because again it is not the MSRP. Then eBay’s says it sold for between .01 and $19.95. So what is this telling buyer? If they pay more then 1 cent they are paying too much? Was the 1 cent item new or used, was it damaged etc?
Again this is not relevant information to represent to buyers because, first, the MSRP is wrong, and second, what it sold for on ebay is not enough information for buyer to make an informed decision.
Ebay get rid of this section completely. This is like having a DSR for shipping and handling
Next you will notice under the information section ebay presents 5 of these items to buyers. I ask why only 5 when we know there are 37 listed. Would it not be better to present 9 or 12 or 15? What happens if all 5 presented happen to be used items and consumer is looking for new or vice versa. Does buyer think those are only 5 available and leave ebay? Does buyer know enough to click on button “buy one like this” to see all items?
Also keep in mind this is not always presented in ending soonest and I have personally seen it change from ending soonest items appearing, to newly listed, to simply what ebay determined best match. So this will surely affect seller and buyer behavior.
Also notice not all of the 5 items have gallery images, which in my opinion creates an ugly presentation to buyer. Even if seller chose to not list item with gallery, ebay can still have the stock photo shown in best match appearing next to the 5 items presented, but better yet should make gallery free in all listings. Ebay is very hypocritical here saying they want to improve the buyer experience and not include gallery for free which makes for an ugly presentation to consumer.
But it would not surprise me with eBay’s thinking, they will have a weighting for those who use gallery in the algorithms for the 5 items that appear. Thus favoring items listed with gallery is a means to get sellers to pay for gallery. But guess who pays for gallery? Ultimately it will be passed on to consumers raising prices once again on the eBay buyer.
If eBay thinks every time they improve the buying experience someone must pay, it is flawed thinking and high time ebay started giving to improve their own site.
Okay now click on “buy one like this” button. You see the same information header as before and all 37 listings. Notice there is no tab for buy it now only but instead on the left navigation bar is a link. Also notice there is no link to review completed items.
One other observation I noticed on finding 2.0. One cannot search by UPC or ISBN number. For Xenosaga 2 the upc code is 722674100175. If you put this upc code in a search on ebay.com the item will appear. On find 2.0 it will not and it thinks it is a keyword. On Amazon the UPC is searchable as well.
Please tell us what your findings are! We would love to hear your comments.
September 18th, 2007
written by Steve Grossberg, IMA President
I was looking at eBays DSR’s this morning. I pulled up the top 100 active ebay sellers in the USA and compiled a list of their respective DSR’s
Here are my findings
Item as described – average score 4.79
Communication – average score 4.66
Shipping Time- average score 4.58
Shipping Fee- average score 4.41
Below is percentage of top 100 scoring 4.5 or better in the respective category
Item as described – 99% scoring 4.5 or better
Communication – 93% scoring 4.5 or better
Shipping Time- 81% scoring 4.5 or better
Shipping Fee- 44% scoring 4.5 or better
What is really disturbing here is looking at the shipping and handling. When eBay announced the DSR strategy, sellers were voicing concern that eBay was going to use shipping and handling as a rating category.
This is totally unfair of eBay to do since it is human nature when something to do with prices consumers pay, the ratings would always be lower than what is probably realistic or true. Consumers always want a better deal when it comes to pricing.
Also it is disturbing that of the 4 DSR categories, shipping and handling is the only category that buyers know 100% for sure upfront in advance what they are getting before they purchase or receive service or item from a merchant. The other 3 DSR categories the buyer will never know before the transaction is completed and item received the service they will get. Shipping and handling fees are known and it is totally unfair for a buyer to rate someone on something known in advance with 100% certainty. It is fair on the other 3 DSR where the buyer would never know in advance.
Not only that but I cannot find any other venue or seller rating system on the internet where buyers rate sellers on shipping and handling fees charged.
Whoever thought of putting down shipping and handling as a DSR category should be fired, in my opinion. This was an idiotic move on eBay’s part and something that will hurt sellers and hurt eBay. What was this person smoking who came up with this?
I encourage everyone to look at their own DSR and I would be willing to bet 90% plus have the lowest DSR rating on shipping and handling regardless if you are actually losing money on your shipping and handling fees charged.
As we all know eBay is the highest cost place of doing business on the internet.
Looking at my personal numbers, in the month of May 2007 my combined ebay/PayPal fees were $26,052.00 and sold 4800 items only that month on ebay, but 400 were never paid for, leaving 4400 paid item. My average ASP was $15.54, so simple math taking $26,052 and dividing by 4400 items sold gives me $5.92 paid to ebay/PayPal per item sold. Average ASP again was $15.54 so divide $5.92 into $15.54 – 38% ebay take rate.
And eBay has the audacity to allow buyers to rate sellers on shipping and handling? I would gladly lose money on my shipping and handling if eBay was to lower their fees or take rate. As we all know eBay fees are a function of buyer demand or sell through. The higher the buyer demand or conversions, the less per item we pay in eBay fees or lower take rate per item.
I think we all need to take a strong stance against eBay having shipping and handling as a DSR category as it will ultimately hurt most sellers and eventually hurt eBay. It is a DSR that is destined to backfire and consistently be the lowest scored DSR.
I would rather see ebay replace this DSR with Would you buy from this seller again?
What eBay is doing here by adding shipping and handling as a DSR category is encouraging sellers to lower the shipping and handling, regardless if they are actually losing money on the shipping and handling fees charged vs. paid. I am willing to bet the vast majority of sellers will still be rated lower on the shipping and handling DSR then any other.
If eBay does not change their ways I think it would be great for all sellers to show their eBay fees paid in every listing. In other words, in my listings I could add to the template:
“In May 2007 $5.92 of the total purchase price of this item went to eBay for eBay/PayPal fees.”
This would be no different from what eBay is doing to sellers by having a DSR rating, than it would be for sellers clearly alerting eBay buyers of the factual information regarding the fees they the buyer pay eBay. Because ultimately it is the buyer paying those fees to eBay since sellers who are not recouping their eBay fees, will obviously not be selling on eBay.
Now honestly I do not think the best way of handling things is doing what I described above as I would be disparaging my business partner eBay. But obviously eBay has no problem in disparaging their business partners, us the sellers by having shipping and handling as a DSR category.
My eBay’s fees are my biggest expense next to cost of goods. Looking at my expenses of running budget video games, in eBay is 33% of my total expenses paid. Ebay is by far the biggest expense and eBay gets a lot more then I pay out in payroll even. How can our highest paid employee stab us in the back like this? Do they not know where their bread is buttered? Ebay, wake up and smell the coffee, stop disparaging and working against your sellers (customers) and start working with us. Our pain is ultimately your pain, what don’t you understand about this?
I would love to hear your thoughts and ideas.
Click Here To Read Part 2
September 17th, 2007
written by the Lively Prognosticator
When I got suckered in, I mean asked to write a blog, the first thing I had to do was select a subject. Initially, I thought to myself that I would keep it positive, and pick a topic where maybe I could give some great suggestions on how to increase effectiveness as an internet marketer. But a couple of mojitos later, I said naaahhh, what fun is that? So I decided to go for the gusto, pick a topic, and share my thoughts in a manner reminiscent of Bill Maher, with a little Geraldo Rivera thrown in. Not that I’m as witty or talented as either of them, but I gotta aim high, ya know?
Just a few more things about me before we get started. I choose to remain anonymous. I’ve been told by many naysayers that eBay doesn’t get mad, they get even. But many of you know me. I have been selling items in my category for over 25 years, using many different methods, including mail order, face to face sales, and ecommerce. For many of those years, I was also a senior manager for a Fortune 500 company. I’ve been selling on ebay for almost 10 years, and became a PowerSeller almost immediately. I’ve got a wealth of knowledge, and people often seek out my opinions on a variety of subjects. OK, enough said. Let’s get into it.
My first thought about eBay is that they have a business philosophy that is counter to the philosophy of every major corporation in the United States. Every major business in the country is built upon Customer Satisfaction. Mission Statements, Core Values and Corporate Philosophies are built upon the foundation of providing world class Customer Service, and treating the customer in the manner you would like to be treated. So how does eBay measure up? First off, who is their customer? Who put over $6.7 billion into their coffers last year? Well, let’s see, buyers don’t pay for membership or the right to bid, they pay eBay nothing when they buy something, and they pay zero when they use Paypal. Total cost to buyers for using and buying on eBay? Zip, nada, bupkis, nothing. How about sellers? They pay a listing fee whether the item sells or not. Then eBay charges extra for everything from Gallery to featured listing to store fees. Then the seller pays a final value fee if it sells, and pays another fee to Paypal if the buyer pays that way. So it’s pretty clear that eBay’s customer is the seller, who is putting almost all of that revenue into their pocket.
OK. Now we’ve established who eBay’s customers are. So how do they reward those customers? They’re rewarded by the “e” in eBay. eBay’s entire Corporate Culture is built upon these 4 “e’s of eBay:
Excessive Fees – If you are a seller on eBay, you don’t need to be reminded of the outrageous fees that ebay charges. But let’s do a quick analysis. A seller lists an item for $9.99, and it sells for the opening bid. He pays a 40c listing fee, a 35c gallery fee, a 53c Final Value Fee, and a 55c Paypal fee. Total fees $1.83 or 18.3%. But wait, it gets better! That’s assuming a 100% sell-through rate. Every time one doesn’t sell, you still pay that 75c listing and gallery fee. When a buyer doesn’t pay, you STILL pay that 75c listing and gallery fee. And if you use eBay tools, or selling enhancements, you pay, pay and pay some more. Stores cost money, listing tools cost money, other features cost money. And you can be sure that eBay is constantly looking for methods to increase their take rate. For example, there’s a promotion going on now offering free listing fees for a whole month. Why? Rumor has it that eBay will go the route in the US that they went in France. Force all listings to have gallery, and increase the listing fee. eBay NEVER reduces fees unless there is something in it for them. So while this is a great benefit for some sellers this month, enjoy it while you can, because come early 2008, it will be BOHICA (Bend Over, Here It Comes Again).
Extraordinary Attention to Wall Street Analysts – eBay spends an inordinate amount of time, energy and money courting Wall Street analysts to make sure investors will continue to be confident in purchasing and holding eBay stock. And while this is normal for any large corporation, once again, ebay handles this by going over the top in their effort. Stock analysts know that if their opinion is Buy or Outperform, or if they upgrade their opinions, there’s a good chance that Meg will be at their next investor meeting. If their opinion is Underperform, or even Neutral, Meg is usually previously booked, and unable to participate. And if they have a sell opinion, they probably won’t even be invited to eBay’s analyst briefings.
Extreme inflexibility – This is the large sellers’ biggest complaint. Large sellers are treated the same as small sellers by eBay’s Trust & Safety Division, who make business ending decisions, with little forethought, and strict adherence to rules. When eBay takes down an item, they generally follow a “three strikes and you’re out” format. Sounds reasonable, doesn’t it? NOT! They don’t differentiate between the seller who lists 50 items a week, and the seller who lists 5,000 items a week. This is not about the large seller generating more volume. It’s about the fact that in this case, the small seller had problems on 6% of his listings, and the large seller had problems on less than 1/100th of 1% of his items. Or more recently, eBay decided that a neutral should be treated the same as a negative in terms of making decisions on whether to restrict a seller. While I agree that in some cases a neutral truly IS a negative, in many cases it’s not, and there’s no thought going into this. It’s just a “count up the numbers and do what the chart tells you to do.” I’ve had a number of situations where a customer bought something, there was something wrong with it, I immediately offered and issued a refund, and they gave me a neutral, with a comment stating that I took good care of them, and they’d buy from me again, but they didn’t get what they bought, so they didn’t feel I deserved a positive. You can’t levy penalties for every situation in exactly the same way. If we did this in the real world, we could eliminate our entire system of jurisprudence. A good thing by eliminating lawyers (Oh lord, do I wish), but a bad thing by not giving the accused a chance to state their case.
Every seller can be replaced – This is the final “e”, and I don’t think it needs much explanation. eBay has repeatedly set policies, taken positions, and conducted themselves in a manner that demonstrates a blatant disregard toward sellers. They are currently focused on the Buyer experience. They are also clearly focused on the stock, and the Wall Street experience. And you can bet their yearly bonus that they’re focused on their employee experience. The seller experience? Sorry folks, there’s just not enough resources to help you.
Experienced sellers are getting smarter and smarter. Many are having positive selling experiences on sites like Amazon and Overstock, as well as their own website. A recent survey of sellers by a leading financial institution found that approximately 80% of eBay Powersellers plan to do more of their eBusiness off eBay over the next 12 months. And this is not a particularly new trend. It’s only going to take one company, with the right concept, the right timing, the right philosophy to come along and put it together. You can bet your house on the fact that a Google or a Microsoft or a Yahoo will snap them up, giving them the financial background necessary to mount a formidable challenge to eBay. And when that happens, the sellers will move faster than warp speed. And eBay will have nobody to blame but themselves. It’s coming folks. Be prepared!
This is the Lively Prognosticator signing out. If you enjoyed my diatribe, please let the IMA folks know. If you didn’t enjoy it, please keep your thoughts to yourself or I’ll buy something from you just so I can leave a neg!
September 9th, 2007