posted on February 1, 2005 04:33:32 AM
don't have the link, but it said lots of sellers are leaving Ebay.
Where are you (and they) going besides Ebay?
http://lwright.biz/index.html
posted on February 1, 2005 04:59:44 AM
Some Sellers
Leave eBay
Over New Fees
By MYLENE MANGALINDAN
Staff Reporter of THE WALL STREET JOURNAL
January 31, 2005; Page B1
Carol Adams has been selling Italian ceramics and tiles on eBay Inc. for nearly six years. But this may be the year she abandons the Internet auction site, following the announcement earlier this month of a new fee schedule for eBay's millions of merchants.
When the new fees take effect Feb. 18, Ms. Adams says the $200 she currently pays eBay in a typical month will double - erasing nearly all the profit on her eBay sales of DeSimone ceramics, which total some $1,000 a month. Ms. Adams, a 65-year-old resident of Milan, says she plans to close down her designated "store" on eBay's main site and reduce her eBay auction listings. Instead, she'll try selling on other Internet auction sites or create her own Web site and promote it with search-engine ads.
"We 'grew up' with eBay and leaving is not a good thought," says Ms. Adams via e-mail. "We never expected to get wealthy, but we did expect a fair margin of profit."
Fee increases usually prompt grumbling from eBay sellers, who insist they will peddle their wares elsewhere. But in the past, disgruntled sellers haven't had many other options. Now, though, there are several alternative auction sites available, including Overstock.com Inc. and Bidville Inc. A new site, Waggle Pop, is set to launch in February.
In addition, small merchants can sell new and used goods on Amazon.com Inc.'s giant Web site. Yahoo Inc. has auctions and offers tools for building Yahoo-hosted Internet stores. Retailers also can hang out their own shingles in cyberspace and advertise using Yahoo's search engine or Google Inc. Search-engine advertisers pay to have their ad appear when a user searches a particular term, such as "cocktail shaker" or "wedding dress."
Terry Rhodes, a 59-year-old resident of Dixie, Wash., has been investigating alternative auction sites for her small business of restoring and selling antique quilts. After eBay's new fees take effect, she says, there will be "no point" in selling on the site: "I won't make any money."
Ms. Rhodes says she is tired of seeing her eBay profits nickeled-and-dimed away by fee increases on features she considers critical. The fee an eBay seller pays to run a photo with a listing, for example, is expected to rise 40%, to 35 cents a photo from 25 cents. The five-cent flat fee for the "Buy It Now" option is expected to be replaced with a tiered fee, which in some cases could rise as high as 25 cents an item.
That may be literally small change for eBay's casual sellers, but it adds up fast for the small businesses that sell dozens or hundreds of items a month on the site. (Although eBay doesn't disclose how many sellers it has, it does say that 430,000 U.S. users make all or some of their living on the site.) In addition, eBay is raising the monthly fee it charges operators of online stores to $15.95 from $9.95, a 60% jump, and lifting its commission on sales in the online stores.
The threat of seller defections is attracting more notice amid hints that eBay's torrid growth may be slowing. Shares of eBay fell 19% on Jan. 20, after the San Jose, Calif., company reported disappointing earnings and offered a subdued financial forecast. Growth slowed most significantly in the U.S. and Germany, eBay's biggest and oldest markets. Meanwhile, competition in online retailing is heating up, as national retailers such as discount giant Wal-Mart Stores Inc. and consumer-electronics seller Best Buy Co. enhance their Web sites.
Executives at eBay point out that fees haven't risen across the board, but only on optional features that sellers may find useful in setting their listings apart from the millions of others on the site. Michael Dearing, an eBay vice president and general merchandise manager, says eBay hasn't raised fees for merchants' designated stores since 2001, even while adding tools that help them customize and analyze sales.
"The only way we're successful is if our sellers are successful," adds Bill Cobb, president of eBay North America, the company's biggest business unit. Executives also note that eBay's gross merchandise volume, the value of all successfully closed listings, continues to grow every quarter. They say eBay has changed fees not only to generate more revenue but also to ensure that the marketplace remains an efficient, pleasant place for sellers and buyers to trade.
Even before the new fees kick in, some analysts say they see signs of slowing growth. Derek Brown, an analyst at Pacific Growth Equities, San Francisco, says eBay's average number of items for sale per registered user has been declining for more than a year. And he says he believes sellers' profit margins "are decreasing, in some cases materially."
At the same time, Mr. Brown says, "the challenges of selling on eBay [are] increasing." With more alternative ways of structuring an online business now available, he adds, "there are more reasons to explore those options."
Certainly, many sellers are turned off by what they see as a long-term pattern in which eBay is gradually taking bigger bites out of their sales. The online auctioneer has raised some of its fees each January for the past five years. By last year, eBay's average commission had grown to 7.3% per sale, up from 6.3% in 2001, Mr. Brown estimates.
Safa Rashtchy, an analyst at Piper Jaffray's Palo Alto, Calif., office, says eBay is still a bargain compared with advertising on a search engine. He estimates eBay fees at only about 5% to 7% of sellers' total revenue, compared with search ads, which might soak up 10% to 12% of revenue. He says he doubts eBay's new fees will drive away enough sellers to hurt the company significantly.
Still, the fees seem to be stirring up more than the usual tempest. One protest petition circulating online claims more than 21,000 sellers' signatures. EBay executives say some of the anger stems from false rumors that the fee increases apply to every eBay listing.
Some sellers have already headed out the door. Malcolm Smart, who runs a dog kennel in Brooklyn, N.Y., closed his store on eBay this month after hearing about the planned fee increases. He has built a Web site to sell dog toys and other products and plans to promote it using search advertising.
Jeremy Alicandri, who sold consumer electronics through eBay for about six months in 1999, says he found it difficult to build an identity for his company, SimplyCheap.com, while under the eBay umbrella. So he built his own site and began buying search ads through Overture Inc., an online ad company that is now a unit of Yahoo. Using the search-engine strategy, SimplyCheap's revenue more than doubled in 2000 to $1.3 million from $480,000 in 1999. Sales in 2004 reached $2.1 million.
With search ads, Mr. Alicandri says, "your appeal is not just to people on eBay, but all over the Internet." He pays an average of 35 cents each time a user clicks on his ad. Last year, his marketing expenses, including search ads and postings on comparison-shopping sites, consumed 15% of revenue, about double what analysts estimate for eBay merchants. Still, Mr. Alicandri says, "I wouldn't be spending 35 cents a click if it didn't generate a return."
posted on February 1, 2005 04:59:51 AM
As much as I hate the raise in fees, I'm not going anywhere. I figure the rate increase will drive off those not selling seriously on eBay. Reducing the number of sellers might help the rest of us increase our sales. I'll just do what other companies do at times like this. I'll cut my expenses. I'm already an avid recycler of bubblewrap and popcorn. I send Priority so I don't pay for boxes. I have enough packing tape to last years and years. I'll cut using the features such as gallery and BIN. My regular customers already know that they can place a bid, email me and I'll end the auction for them if they can't wait. That's BIN enough for me. I have more than four wholesale sources and I shop for the ones with the best price. Some of what I sell is cheaper on one wholesale site than another. While the other one has other things that are cheaper. I already sell below retail so raising my price a little more shouldn't hurt that much. I think this rate increase will also get rid of a lot of 99 centers as well.
Cheryl
"No drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power." ~ P.J. O'Rourke
posted on February 1, 2005 06:59:45 AM
ROFLMAO glassgrl!!
**********************************
"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting "...holy sh@#...what a ride!"
posted on February 1, 2005 07:24:05 AM
Hi Cheryl,
Can you share where you purchase your tape if it wouldn't be a huge imposition. I use to buy it from my old job by the case at $24.00 for 36 rolls of 110'. I have 2 rolls left and I never bother to write down the company name since I never thought that the company where I worked would shut down after 18 years in business. I have looked on Ebay but they all seem so much compared to what I paid. I guess that I got spoiled using my old job to buy supplies.
thank you,
rosanne
PS I recycle popcorn, boxes and anything else that I can find. I recently went behind a Bed, Bath and Beyond near my home and hit the mother lode for usable stuff. Of course it upset my sons who don't appreciate hearing that their mom is dumster diving.
posted on February 1, 2005 08:23:33 AM When the new fees take effect Feb. 18, Ms. Adams says the $200 she currently pays eBay in a typical month will double - erasing nearly all the profit on her eBay sales of DeSimone ceramics, which total some $1,000 a month.
Considering the fantastic sell thru rate of DiSimone ceramics, this is either a case of gross exageration or a prime example of someone who has no place in business to begin with.
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If it's really "common" sense, why do so few people actually have it?
posted on February 1, 2005 08:57:18 AM
No free tape from USPS unless you have a really good postmaster like I do. (The last time I looked, that is.)
Kevin
posted on February 1, 2005 10:23:54 AM
The figures used in the article are flawed when you consider that the sell through rate has dropped through the floor. Once you figure in the relists after relists, the percentage that ebay gets approaches 20%. Not to mention what PayPal brings in.
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Alive in 2005
[ edited by stonecold613 on Feb 1, 2005 10:24 AM ]
posted on February 1, 2005 10:57:36 AM
Stone - I'm just curious as to what catagory you list in. I need to ramp up my income for the next couple months so am probably going to begin selling in the US again. I'm just curious as to what catagory of items I should stay far far away from and from the multiple relists that you attest too here, seems like you may be able to pinpoint one of them.
Kevin - You can always order the free supplies from the website. You don't have to rely on a friendly manager or a competent inventory manager.
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If it's really "common" sense, why do so few people actually have it?
posted on February 1, 2005 12:47:52 PM
fenix03, I was hoping you were right but... I could not find Priority tape anywhere on the USPS site. Please, if you have a link to it , let me know.
Kevin
posted on February 1, 2005 12:56:58 PM
Kevin - If you cannot find it on the website see if they still have the 800 number to call and order. We used to get a dozen rolls at a time from them.
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
posted on February 1, 2005 01:08:41 PM
I'm not going anywhere now either, I've decided what I will do to battle the fee increases, and it will work for me. I actually sent out an email message to my mailing list, and I got nothing but positive messages back (a few people on there were sellers too and are in the same boat) - That being said, I think it is important to start looking at other options besides ebay. I presently have about 4000 items in my store, and plan to go to 5000 in the coming few months. I probably won't go above that, it would be too much for one person to manage (well, I do have a 4 year old helper) - 5000 items at 2 cents per month is $100 just to maintain the store, plus $15.95 of course. If they increase the listing fee to 5 cents or 10 cents, that would kill my business model. I see that happening because look at some of the other increases they have made. BIN going up 500% in some cases, FVF increasing 52% - These are very significant increases, and I can see ebay raising the 30 day store fee to 5 cents, and adding a 5 cent fee for good til closed listings. My $100 a month fee would then be $500 a month.
I've done some preliminary research, and think a yahoo store might be a good answer. This is NOT yahoo auctions. I have a domain, a business license, a merchant account, etc., so I have everything I need to get started. It is about $40 a month, with a 1.5% FVF and no listing fee. My present volume on ebay with the new fees will cost me about $300 a month for my store, but with Yahoo that would be more like $70 - Of course, all the traffic is at ebay, so I would not give up the store completely, but use it as a means of gaining customers (reduce my listings) and once I have them, try as hard as I can to get them to visit me off ebay. I think this summer I will work on starting something, and use both platforms and try it out. I know that in a year or so, my present business model just won't work on ebay, so it is time to address that now. Better to be prepared...
I was fortunate enough to order tons of the free USPS tape before they stopped giving it away. However, I now get rolls of it for my birthday and Christmas. That and printer cartridges and such. It may not be a personal gift, but it saves me a ton of money, which I can then turn around and spend on myself.
Cheryl
"No drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power." ~ P.J. O'Rourke
posted on February 1, 2005 02:20:17 PM
Hi Cheryl,
thank you for answering my question. I have tons of Priority tape. I am interested in clear or tan tape for taping items other than Priority. I have not look into Uline. Has anyone used Uline for anything?
thank you,
Rosanne
posted on February 1, 2005 03:16:36 PM
As long as the Powersellers remain loyal to E-Bay I'll have it made selling on other sites. At least I can make a decent profit without some seller cutting my throat for status,and I know Powersellers would rather die than to give that up even if they paid E-Bay $500.00 a month and went in the hole. I see E-Bay going up on their fees as a good thing. I am still keeping my store but I am cutting my listings on Auctions. I will spend money to sell items elsewhere which is already paying off.
**********************************
Two men sit behind bars,one sees mud the other sees stars.
posted on February 1, 2005 04:11:23 PM
"Powersellers would rather die than to give that up even if they paid E-Bay $500.00 a month and went in the hole." Darn, thats where I went wrong! They took my PS and all I could say was good riddance. Twice I was accused of being a crook, even tho these people never bought anything from me. I guess most Power Sellers are viewed as crooks, with most of them charging Huge shipping & handling. ($9.00 S&H for a CD shipped media. I found this when I went looking for Fellowship of the Ring before Christmas!)
Kevin
posted on February 1, 2005 07:12:31 PM
With the new higher fee structure, I doubt the folks at eBay are worried about losing a few thousand sellers with stores of under 1,000 items.
I wonder how the big corporate sellers will react to the new higher fees. Here are the 5 biggest eBay stores and the number of item in their stores.
posted on February 1, 2005 08:22:03 PM
Does eBay give the BIG sellers huge discounts off their store fees?
pass-along has over a quarter of a million items listed, but by looking at their feedback they have only about 1,200 completed transactions since June 2004.
