posted on July 19, 2006 01:28:00 PM
Since its debut in 1995, the eBay marketplace has continually evolved to meet the needs of the eBay Community. For the most part, the behavior of buyers and sellers has naturally adapted to changing conditions over time, we've learned to allow the marketplace to direct itself as much as possible. On some occasions, though in the interest of the eBay marketplace's long-term vitality we've had to step in and implement new policies, introduce new formats, or make changes to our fee structure to create needed incentives for eBay members.
Put simply, we at eBay have two basic roles: to deliver the best overall value for buyers, and to maximize cash flow for sellers. As eBay has grown over the years, we've added various enhancements and tools to the site but in essence, our products are two types of listings:
Core listings (auction-style, auction-style with Buy It Now, and Fixed Price) deliver the signature eBay buying experience. For sellers, they're the fastest way to sell inventory on the Internet the only place where items typically sell within about two weeks.
Store Inventory listings were introduced in 2001 and intended as a low-risk way for sellers to display large amounts of product in their eBay Store. This format employs low insertion fees and higher final value fees to encourage an abundance of inventory on the site.
Amid all this change, one thing has remained constant: auction-style listings are the foundation of eBay. Auction-style and other core listings made eBay what it is today and they'll always be front and center on eBay.com. They account for about 91% of the gross merchandise value sold on eBay.com. But recently, we've been wrestling with some troubling facts:
Store Inventory listings now comprise about 83% of active eBay.com listings on average.
While eBay.com core listings typically sell in about two weeks, Store Inventory listings on average take 14 times longer to sell. In some media categories, Store Inventory listings take more than 40 times longer to sell than core listings.
And, when you compare our operations costs for an average Store Inventory listing and an average core listing factoring in the duration of each our cost to host a Store Inventory listing is more than 50% higher than for a core listing. In fact, current Store Inventory insertion fees don't cover eBay's costs for hosting them.
It's vitally important to your business and ours that we maintain a healthy balance between listing formats on the eBay marketplace, and ensure that inventory conversion across the site remains strong. So we're taking action.
Today, I want to inform you of changes we're making to eBay.com changes intended to rebalance the overall eBay marketplace by further distinguishing the roles of core listing formats and our Store Inventory format. In short, we're improving the advantages of selling in core listing formats and taking action to manage the proportion of Store Inventory listings to ensure that the buying experience on eBay stays true to shoppers' expectations.
Core Listings
Core listing fees will remain unchanged. So for the vast majority of eBay sellers who use only these formats, their fees are not increasing.
And we'll be providing greater exposure for core listings on eBay Express. In late August, we'll begin displaying auction-style listings with Buy It Now on eBay Express for qualifying sellers. Also in late August, core fixed price and auction-style Buy It Now listings that qualify for eBay Express will be advantaged over Store Inventory listings.
Also, in response to the requests of many large sellers, we're raising the 10-item multiple listings limit to 15, effective Aug. 22.
Store Inventory Listings
For those of you who operate an eBay Store, we're making changes to Store Inventory listing fees, as well as to the on-site exposure we provide for this listing format.
We'll begin charging variable insertion fees for Store Inventory listings, as we do for core listings. Beginning Aug. 22, eBay.com Store Inventory format insertion fees will be tiered with an item's starting price.
These Store Inventory format insertion fees take effect Aug. 22, 2006:
Please note that for current listings, the new final value fees will apply only after these listings are renewed.
For more detailed information on these fee changes, please see our fee changes overview.
For some time, we've been working to identify the best way to display Store Inventory listings on the site. In the spring, we pledged to sellers that we would test a variety of ways to mingle their Store Inventory listings with core listings on eBay.com. We've tested several alternatives and these tests showed the ideal approach is how we're doing it today that is, when a buyer's search returns 30 or less core listings, we display up to 30 Store Inventory listings. This is what we'll stick with going forward.
However, starting in about a month, we'll also include an unlimited number of Store Inventory listings after all matching core listings, when the buyer clicks the Buy It Now listings tab at the top of every search results page. When the buyer hasn't selected this option, eBay.com will display Store Inventory listings along with core listings as described above.
Half.com Listings Added to eBay.com Search Results
I recognize that sellers in the Books, Movies, Music and Video Games categories will have unique challenges with the changes we're making. As many of our media sellers have requested, starting in late August we'll again provide visibility for Half.com listings in core search results, by bringing back the Half.com listings merchandising feature we used previously (click here for an example). We're also exploring additional ways to promote Half.com listings in search results on both eBay.com and eBay Express.
How These Changes Affect You
I'm confident the actions we're taking are the right thing to do for the overall eBay Community. We'll more effectively deliver on our buyers' needs and expectations. And for sellers, these changes will ensure that eBay remains a differentiated and distinct e-commerce channel with fast inventory turnover.
I know there's a lot to digest here, and that you're probably most interested in quickly determining if and how these changes will impact your business.
A typical eBay Stores seller who uses Store Inventory format making no adjustments to his or her selling strategy following these changes will experience an overall fee increase of less than six percent, based on our analysis of all June selling activity. Of course, you need to clearly understand the impact on your business which could be greater or less than six percent. To get started, please visit the seller resources page or consult the Frequently Asked Questions we've prepared. Also, use your seller support resources in Customer Support. Our CS teams are fully prepared to help you understand the effect on your business, and discuss your options for adjusting your eBay selling strategy to minimize impact to your bottom line.
In addition to help eBay Stores sellers make informed decisions about any changes to their selling strategies we're making eBay Marketplace Research Basic available to them at no cost for eight weeks, starting today. Through September 19, eBay Stores sellers can use this data to compare selling formats or determine how best to price inventory on eBay. You can access eBay Marketplace Research here.
I'll be hosting a Community Town Hall discussion tomorrow at 4:00 p.m. Pacific time, where I'll answer your questions. Please click here for more details on the Town Hall, or to submit a question in advance.
posted on July 19, 2006 02:14:42 PM
That is a 50%+ fee increase
And, Bill had the nerve to say it would amount to a 6% for most sellers?
Guess he was computing fees to final sales but the worst of it is the fact they really don't want stores at all.
That's what I have thought for some time and now Meg and Bill have admitted.
No way will they see an increase in auction listings over this (Or I don't think they will).
I'll just raise my prices and see how it all plays out. But, if stores die then I'm done with Ebay. Auction sell through is just too low to go back to listing hundreds of items a week.
posted on July 19, 2006 02:16:47 PM
Somehow, I didn't think he would take the time and effort to compose a letter that long without sneaking in a fee increase. I was right again.
If Murphy's law is correct, everything East of the San Andreas Fault will slide into the Atlantic
posted on July 19, 2006 02:19:14 PM
Yup, they lost their marbles. I haven't been selling much on ebay lately, just dosen't seem to be any reason to. Just plain fed up with it all and this is enough to push a person over the edge. Might just close the oll ebay account on Aug 22. Screwem.
1 out of 4 people are mentally unbalanced. Take a look at your 3 closest friends. If they seem alright, you're the one! - Kyle Stubbins, CMS
posted on July 19, 2006 02:22:55 PM
And to think, I was actually toying with the idea of opening an Ebay store. That announcement just helped me make my decision.
If Murphy's law is correct, everything East of the San Andreas Fault will slide into the Atlantic
posted on July 19, 2006 02:33:16 PM
Smilin' Bill Cobb, must for sure be a disciple of J. R. Bob Dobbs, figurehead of the "Church of the SubGenius"
See the last paragraph below....eBay is beginning to squeeze everything it can for additional revenue. It's now time to squeeze the store owners then sometime after the first of the year I believe it will announce an increase to it's core listing rates "in the interest of the eBay marketplace's long-term vitality".
Everyone seems to forget that eBay's one and only interest is to "INCREASE SHAREHOLDER VALUE".
AP
Earnings Preview: EBay
Tuesday July 18, 10:28 am ET
EBay Seen Posting Inline 2nd Quarter Results, Declining Core Raises Concerns
NEW YORK (AP) -- Online auction site eBay Inc. reports earnings for the fiscal second quarter Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: EBay watchers keep an eye on the growth of "core listings," or auctions posted on the eBay main site, as a way of gauging demand.
Core listings have weakened in recent quarters in the U.S. and the U.K., according to Deutsche Bank analyst Jeetil Patel, but May and June showed this metric stabilizing a bit. Still, for the first half of the year, U.S. core listings grew just 2 percent and U.K listings grew 15 percent -- compared with 50 percent to 75 percent in previous quarters -- according to Patel.
Some of the core slip is due to sellers on eBay setting up "stores," or customized eBay pages solely featuring their merchandise. To lure more sellers back to the core, eBay changed the way search works on its main site. Search results now omit store listings.
It's WAY more than a 50% increase. The SMALLEST increase is from 2 cents to 5 cents. That itself is 150% of an increase. For those that sell things higher than $25, it becomes a 400% increase. Then, you have to tack on the increase in the Final Value fees. It's absolutely ridiculous.
posted on July 19, 2006 02:50:12 PM
Obviously, the feeBay STORES have just become an OVERPRICED & UN-NECESSARY LUXURY that few of us will be able to afford after AUGUST!
Tis AMAZING just how quickly feeBay ruined one of the few things that USED to work GREAT!
Time to set uo a web-store & then offer INCENTIVES to buyers to buy off THAT as opposed to buying off feeBay.
Interestingly enough, I've found over the past 12 months that a large numbers of BUYERS no longer want to purchase off feeBay! Many have BEGGED me for a DIRECT SALE! This has been an unexpected yet VERY PLEASING recent development!
I wonder what's up with BUYERS???
Also, it seems that Meg-O-Matic is busier with polishing up her resume for her next "conquest" as opposed to the daily "nuts-&-bolts" everyday hands-on operating of feeBay? Seems like the direction at the TOP has been lacking direction for the past 18 months??
Tis really sad just how badly these clowns are firetrucking-up feeBay -- OH WELL, twas FUN while it lasted...
posted on July 19, 2006 02:55:05 PM
Look at a possible benefit of this action. Many of the stores which should have never been opened, will most likely close. At last look, there were store owners who listed 2 items in their store. These small stores clutter the marketplace.
As to the fee increases - I have to admit that although I have not fully analyzed the increases, I am most certainly not happy with them. I am tired of changing my ebay listings!
Unfortunately, for me, I still believe ebay is the place to have a store. The sheer numbers of visitors, lookers, and buyers, make it the place to do business. The changes in search should help with store inventory turn.
I also have a Vendio store. I will have to take another look at that dog, and see if I can breath any life into it.
Perhaps as a group, we can discuss our plans for the future.
I usually run 7 auctions a week. I have no plans to increase auction listings. My plans were to increase store listings.
[ edited by kozersky on Jul 19, 2006 02:58 PM ]
[ edited by kozersky on Jul 19, 2006 03:02 PM ]
I came up with the 50% number by using my own listings as an example.
I usually have 3000 items for sale so fees went from $90 a month to $180 a month.
Guess that should have been a 100% increase not 50%
I had planned on having 10,000 postcards listed by first of year. Now, I guess I'll try to get back to my own website and keep 1,000 or so on Ebay.
Then, every eoa can point them to my site to check out other postcards I have.
Anyway, Ebay has made it very very clear they don't want stores around.
What they don't know is that ending stores will probably not increase the auction count. I know I won't be listing more in auction format anytime soon.
posted on July 19, 2006 03:04:17 PM
They don't want stores that's fine. I just closed mine. They can stick that in their big corporate pipe and smoke it.
1 out of 4 people are mentally unbalanced. Take a look at your 3 closest friends. If they seem alright, you're the one! - Kyle Stubbins, CMS
posted on July 19, 2006 03:13:30 PM
With the volume of things I list it comes out to around an extra $25.00 a month in fees!
Edited to Add...$25.00 additional just in listing fees. I haven't figured out the increase in FVF...I now spend about $15.00 a month in listings fees.
I'm thinking about moving most of my book inventory back to half.com as they say they will start including the box at the bottom of the search page again with 1/2.com listings starting late August.
posted on July 19, 2006 04:03:38 PM
First, I find it hard to believe that the "holding" cost of store items is not covered by insertion fees. Second, this seems to be a decision that is being driven by quarterly profits thinking, not good business sense.
There was a good book by a Harvard b-school prof titled Do Lunch or Be Lunch and it dealt with predictablity and entrepreneurial success. It is very important for the entrepreneur/small business person to be able to sustain a business model in a relatively predictable environment; knowing full well that there is no such thing as complete predictability.
This will be the fourth or fifth time we are changing our business model based on an ebay whim.
Also, google seems to have changed the way it is indexing items. My Vendio store used to be right at the top of most searches, now I am lucky if it shows by page 4.
Time to go back to the drawing board and figure out, once again, what to do and how to do it.
Beth
www.vintageads4u.com
posted on July 19, 2006 04:21:27 PMI find it hard to believe that the "holding" cost of store items is not covered by insertion fees.
Can I ask why you think that?
I don't find it hard to believe at all. A Store listing can cost only a couple of cents. Out of those two cents have to come the listing's pro-rated share of operating expenses. Operating expenses for the three months ended June 30, 2006 were $806.8 million.
An unsuccessful basic Auction generates 20 cents in listing fees and lasts 7 days.
An unsuccessful Store item generates 2 cents in listing fees and lasts 30 days.
I imagine this was one of the easier decisions Bill Cobb has had to make. I don't think he raised Store fees enough, even. Sorry to have to say it.
posted on July 19, 2006 04:22:50 PM
G. I thought Bill Cobb thought I was SPECIAL when I saw the e mail personally sent to ME Now I RUN over here and see he sent it to you folks too!
I love the part where the Number of Multiple listing has been INCREASED to 15 from the MAX 10. I remember when e bay was flooded with hundreds of the SAME auctions,,,, Motorcycle jackets was the thing that caught my eyes back in 2000. I thought how insane! The SAME item over and over and over and over. Ten seemed like a good Cap rate....But e bay is losing money. So PUSH up the limit to 15. pretty soon they'll just drop the limit and the idiots will again FLOOD e bay with 100's of the SAME auctions. E bay likes that
posted on July 19, 2006 04:25:53 PM
Let's see. I can raise my prices or take my mailing list and go elsewhere. This will have a negetive impact on my business as I sell many small items.
On August 21st I will close most of my store items and relaunch them in my Vendio Store.
In the interim I will enclose a note to every buyer letting them know this as well as doing a bulk mailing via snail mail.
I also will encourage my buyers to use alternitives to PayPal, and am closing my Prostore to boot.
If enough sellers boycott eBay their share value will drop which will affect Bill and Meg.
posted on July 19, 2006 04:36:35 PM
I would imagine this message from Bill Cobb will probably be on the agenda for discussion at the next Google board meeting. I would love to be a fly on the wall at that meeting.
If Murphy's law is correct, everything East of the San Andreas Fault will slide into the Atlantic
posted on July 19, 2006 04:40:46 PM
Question?? does anyone have a vendio store and how does it do for you?
I am going to check out the cost vs Ebay stores. With my last job, we had a Vendio store where we would sell quite a bit by sending a few items over to Ebay but they would want more items, so they would come over to the vendio store.
mama
posted on July 19, 2006 04:52:37 PM
Wow, this just really sucks. I figure this will cost me an extra $300 a month in profits, that is really quite unacceptable. Ebay stores have been great for me, but with a 10% FVF and a nickel per listing, I am going to have to reduce my inventory to probably a couple of hundred listings (down from about 6000) and this will finally push me to get my own website up and running. I think I will go with yahoo though, after this is done less than 5% of my business will be through ebay.
posted on July 19, 2006 05:01:53 PM
Hmmm...Well, just last night I was thinking it was time to raise my S/H prices up .50 ..........Might have to raise them up a ful $1 now per item!! Anyone else just want to punch that cocky look off of his face? LOL
posted on July 19, 2006 05:02:04 PM
My ebay store is now officially toast. Perhaps there should be a boycott from all sellers and see how their increase worked out in the long run for their botton line.
posted on July 19, 2006 05:05:10 PM
I am thinking the FREE Vendio store is looking a WHOLE lot more attractive....Beth are you still seeing great sales?
I have never used the Vendio checkout - is it seamless or do buyers grumble about it? This seems to be the best way to pull buyers into the Vendio store..thoughts on this?
-------------------------------------
posted on July 19, 2006 05:18:59 PM
can't we report them????...doesn't this fall under that policy about excessive amount charged for shipping/handling(corporate BS)? I like how they STEPPED up the inforcement of that JUST BEFORE doing this increase.....
1 out of 4 people are mentally unbalanced. Take a look at your 3 closest friends. If they seem alright, you're the one! - Kyle Stubbins, CMS
Now I RUN over here and see he sent it to you folks too! 
