posted on September 22, 2000 03:02:26 PM
Okay - Please don't rehash the same old stuff. If you do not want to own a viable thriving business, then why are you selling on eBay? I'm a legitimate Antiques Dealer and am glad Paypal is available to MY customers. I have a normal merchant account and find Paypal's fees more often than not less than my merchant account. I look at Paypal like I do any of my expenses in running my business, just like my Dad taught me in running his. You have to pay for paper, pencils, ink, phone lines, everything imaginable to run a successful business. Why should the fees associated with Paypal be treated any differently?
posted on September 22, 2000 03:18:48 PM
Billpoint started charging fees for all customers as of August 1. But I don't think there was ONE SINGLE post here complaining about it.
Why? Becuase they never claimed it would be "free forever" and they gave everyone plenty of notice before starting the fees.
The fees aren't the problem. The problem is the Paypal repeatedly lies to us and clearly has very deceptive business practices, yet they want us to trust them with thousands of dollars of our money and give them complete access to our bank accounts. That's the problem.
posted on September 22, 2000 03:23:36 PM
Where/When did PayPal demand "complete" access to your bank account? Last I checked you did not "HAVE" to even give the the account number.
posted on September 22, 2000 03:25:41 PMIf you do not want to own a viable thriving business, then why are you selling on eBay?
Um, how about....the time before last when I moved, I had 26,000 lbs of stuff. A year after that, when I moved, I had more than 30,000 lbs. and I have been here for more than 4 years--accumulating, of course--and plan to move into a 5th wheel when my son graduates from high school in May? How's that grab ya?
So, when did selling on Ebay mean that you have a viable thriving business? I thought it was a person-to-person auction venue for one person to sell what they don't want and another to add it to their collection. (at least that is what it STARTED OUT to be...) Could be wrong here....
posted on September 22, 2000 03:28:02 PM
Actually, you are correct. You do not have to give them access to your bank account. But if you do not they warn YOUR BUYERS that you are "NOT VERIFIED." It implies that you are somehow not trustyworthy, in my opinion. Now if they wanted to change that warning to "This seller refuses to give us access to his bank account," I would have no problem with that.
Let's suppose that your Merchant Account holder had you on a 5 year contract, at 3%. You've made business plans based on the assumption that you'll have that functionality at that price for that period of time. You've invested in their credit card processing hardware and software, advertised that you accept Visa and Mastercard, and the like.
Then they arbitratily changed the terms of that contract, adding an additional 2% (now 5%) to your term, stating that they needed more money to stay in business.
Would you just consider that a cost of doing business, like anything else?
Or would you feel that you'd been misled by your merchant account processor- that they'd not lived up to their end of a bargain?
posted on September 22, 2000 03:40:19 PM
magazine_guy:
Actually, my account fee was lowered just recently because of volume, but that's another issue. I would always have the option of shopping around for a better deal, and that's what I would do. Do you all stop buying pencils because the price goes up? I doubt it.
I posted my originally statement for business owners. If you signed up for a business account to accept credit cards through Paypal as a business, then do what every other business does. Pass the charges on to the customer. Period.
Like my mother always told me when I whined about something not being fair:
"I don't remember you being born with a tag on your toe that said life WAS going to be fair".
I'll always remember those words, and try to remember them everyday when someone does something I don't like.
I didn't like it either when Paypal did what they did, but just added it into my pricing. If my customer's complain I'll either stop accepting Paypal or find an alternate way of accepting credit cards over the internet.
posted on September 22, 2000 03:51:42 PM
In an auction format, the only way that I can see that you can "pass the cost on to the customer" is by adding it to your "shipping and handling" fee.
Many sellers are committed to to charging their customers actual shipping charges, so I don't see how they could pass the cost along to their customers without compromising their principles.
If you normally start your auction at $9.99, just up that to $10.25, that's what I mean by passing it on to your customer, as you said in an auction format.
I really don't understand what all the oopla is about.
I can just see all the people complaining about this quarter going through their phone bills each and every month and calling the phone company about each penny they may have been overcharged on! I'm only trying to put light on the subject.
It's only a quarter people.
As for the 1.9%, my merchant account for V/MC is 2.43% and Amex is 3.5%. Then they charge me .15 to authorize each charge, plus .20 for each charge to deposit it into my account! Would you like to be paying that much? I for one am very greatful to Paypal for the 1.9%, plus .25 cents, it's cheaper.
posted on September 22, 2000 04:01:58 PM
If I could start my auctions at 10.25 instead of 9.99 without affecting my sales, don't you think I would be doing that already?
posted on September 22, 2000 04:10:13 PM
amalagmata:
Have you tried?
If you have, then what you have is only worth 9.99 to the bidders. I suggest you concentrate on something worth more that you could have a little cushion in. I doubt highly that anything worth under $10 has much cushion.
Please keep in mind I am only discussing this for the benefit of businesses, not hobbyists.
posted on September 22, 2000 04:12:04 PM
amalgamated - You pass fees to your customers by making sure that your start price in the auction format covers your basic expenses to sell the item. If you can't start the auction at a price that covers basic expense to sell it. THEN MAYBE YOU SHOULD CONSIDER NOT SELLING THAT ITEM.
Padding an already falsely padded Handling Fee with your ebay list fees, packing material cost, FVF from ebay, and now paypal fees is not handling. In fact it takes on a more appropriate title of Expenses to Sell you this item fee. You wouldn't put that in your TOS so I suggest you not consider passing those fees off in the TOS.
When I sold on ebay every item I listed started at a price that recovered my basic expenses. If I sold MS Windows NT Workstation, I started the listing at $15.99, $10.00 my cost to procure the software, 50 cents my cost to list, 50 cents for the FVF to ebay on $15.99, and 33% markup over my procurement cost. The bidding nature of ebay provided the real profit. If the item only sold for $15.99, I still made 33% profit on the $10.00 item.
The problem as I and others have said till we are blue in the face is the average ebay seller has no concept of basic business principles. Even if you sell rare antiques, you know the value of the antique when you list it. Let's say it is worth $100.00, and you bought it for $45.00. Using my system it starts on ebay for $58.25. If it doesn't sell for nothing but start price I have made 20% profit. If it sells for the hundred I think it is worth I make over 100% profit. To close know what it cost you and set basic profit at 15% to 33% of that plus list fee and FVF on the base list. You will turn a profit everytime and when the auction part kicks you will see real money. Not hard to do if you run a business. Hard to grasp if you view this as just something to do to clean out the garage.
[ edited by networker67 on Sep 22, 2000 04:16 PM ]
posted on September 22, 2000 04:13:44 PM
Well, acutally, I was using the number that you gave as an example. Personally, I don't sell anything with a starting bid of less than $50.
But I don't know of any professional seller would knowingly sell an item for less than they thought they could get for it. What would be the point in that?
posted on September 22, 2000 04:15:01 PM
Once upon a time.....
Get a customer base entrenched in using/promoting PayPal. Get their customer bases paying with PayPal.. all under the premise... its fast, free and easy. Everyone's comfortable, no problems.
Then change the rules of the game. It's still fast, it's still easy, it's not still free.
If your margin is slim to begin with, all them "only a quarter"'s add up. Dont forget, over half of eBay's revenue comes from those quarters!
"This www stuff is never going to catch on.." (me, late 1900's)
posted on September 22, 2000 04:17:31 PM
Networker:
Thank You Thank YOu Thank YOU!!!!!!
Finally, an actual business OWNER! In order to do business in MY state you must first procure a name and register that name with the state. I think eBay should have verified everyone as a business owner. Life would be much simpler now.
They could have started a secondary site for people cleaning out their garages, much like they started a site for cars
posted on September 22, 2000 04:26:00 PM
I'm not going to get into the specifics of my business here, but it is a very successful incorporated business.
And the fees are really irrelevant to me, though I already pay eBay what many people would consider a good monthly salary.
But Flynn says that seller should pass along additional fees to their buyers by raising their starting bids.
I suggest that if a business has the ability to raise their prices without affecting their sales, then they are not running their business very efficiently.
posted on September 22, 2000 04:32:48 PM"They could have started a secondary site for people cleaning out their garages, much like they started a site for cars"
Correct me if I am wrong, but I thought Ebay [b]STARTED[b] as a "cleaning out their garages" site and the businesses are the ones that came in.
Perhaps they should have started a secondary site for businesses?
posted on September 22, 2000 05:19:16 PM
Networker..I guess I'm just not a good businessman. Would you please explain to me how you buy something for $45.00,sell it for "over $100.00" and make 100% profit?
posted on September 22, 2000 05:32:13 PM
radioguy:
Actually what was posted was if the item sells for the 100.00 I think it's worth I make over 100% profit.
If something is purchased for $45.00 and sells for $90.00 - that constitutes a 100% profit. Anything over $90.00 is over 100%, last time I checked anyway
posted on September 22, 2000 05:50:58 PM
Flynn
Profit is money realized after cost.$45.00 cost,$90.00 sale=50% profit.To get 100% profit you would have to aquire item at no cost. $90.00 sale would be a 100% markup from cost of merchandise.
posted on September 22, 2000 06:03:38 PM
While it is true that $45.00 is 50% of $90.00, to find the % profit, you take the cost of the item= $45.00. The % of profit is the percent of the cost that you realize.
Thus, if you paid $45.00 for the item and you sold it for $90.00, then you made $45.00 on the item which is getting the original cost of the item back PLUS and equal amount or 100% profit.
If you sold it for $67.50, you would get 50% profit because you got the original cost back plus half of the original cost.
If you sold the item for $135, you would realize 200% profit on a $45.00 item.
I think you are making an error comparing auctions to retail fixed price sales:
"I doubt highly that anything worth under $10 has much cushion."
VERY rarely do I start an auction at $9.99 that I expect will end there -- it is just a starting point to encourage bidding. Had an item last week, started at 9.99 no reserve, sold for $122. Another started 24.99 no reserve, sold for $965.
Just an observation, now I'm going back to the cushion & watch some Olympics.
posted on September 23, 2000 04:27:18 AM
labbie1 is right, ebay started as an on-line garage sale, and some of us liked it that way. and IMO it's heading back that direction due to the sheer volume of sellers, driving prices lower in many catagories. The only thing that is "so bad" about PP is that some of us (myself included)would have never signed on with the fees, we feel betrayed that the "ALWAYS FREE" promise has been broken. No problem for me, I'll close my account and find another "free" service or none at all...I will NOT add more expenses into my already meager sales amounts (check my auctions, you'll see it's low ticket stuff). But please don't try to shut us little guys out or demean us for an opinion of what I think was a underhanded business practice on PP's part. I was unhappy wilth ebay's "only a dollar" bull too, I just quit using reserves on 99% of my auctions, same as I intend to quit using PP if they insist on pushing this.
posted on September 23, 2000 09:53:58 AM
Some of us ARE hobbyists! We signed up for PayPal and promoted it to our customers because they said it was free. Now they want all sellers to declare themselves businesses and pay fees. That's the problem. If PP ultimately comes out with their "what's a business?" ruling and cuts us small-fry some slack, the problem disappears.
posted on September 23, 2000 10:06:03 AM
In an auction, there is no way of "passing along" an increase in overhead to the buyer by increasing your starting bid price, without adversely effecting your sales. I've seen this touted over and over, and it's just wrong.
You likely auction using one of two models. You auction with a low opening bid, in the expectation of getting multiple bids that will cause the item to reach it's current value; or you list your opening bid at a price you're expecting to sell the item for. The later is more of a retail sales model than an auction, and it is a model that more and more sellers are adopting on eBay.
In either case, you cannot effectively "pass along" a price increase to your buyer by increasing the listing price. In the auction model, increasing your opening bid by 25 cents will not result in a closing bid that is 25 cents higher. Indeed, increasing the opening bid under this model may decrease bidding, and lower the final sale price. Under the retail model, if you increase your listing (retail) price by ANY amount, you will lose a small % of your buyers. If you had been able to raise your retail price with impunity, you likely would have done it previously under this model.
There's no free lunch.
[ edited by magazine_guy on Sep 23, 2000 10:14 AM ]
posted on September 23, 2000 10:33:54 AM
THANK YOU MAGAZINE GUY..finally someone who can put into words what I've been thinking everytime I see the "just raise your opening bid" argument. I, along with many others, sell a wide variety of items, and I am not an expert on any of them, although I am learning all the time. I start all my auctions out low and let the bidders decide what it is worth. That is called an auction. There is no way to add on to the starting price at an auction. Although eBay is heading away from the P2P format, we are what made this site what it is today
