eBay cuts 3rd party providers affiliate revenue

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eBay Partner Network (ePN) is eBay’s affiliate scheme which pays a commission to websites that send traffic to eBay. Different rates are paid when a website refers a user who places a bid, makes a purchase or registers as a new eBay user.

Many companies have offered tools to eBay users and relied on ePN payments to fund their services enabling them to keep charges low or provide tools for free. That’s all changing, eBay recently stipulated that ePN was intended to reward referring websites for new or incremental traffic, not for referring users who are already using eBay.

ePN affiliate payments are intended to reward websites who drive new traffic and incremental activity on eBay. I can understand why eBay don’t want to pay for traffic from tools providers, they are essentially paying for buying and selling activity from existing eBay users.

This has left a number of third party tools companies with a large cut in their revenues. Auctiva has been the first to announce that some services (listing and hosting) will become paid for services. They will still offer a few free services such as Sellathon and 1mg of free picture hosting, but for most larger sellers who wish to remain with Auctiva, a paid plan will be the only option.

Other third party tool providers have also reacted to the news, Inkfrog are promising no price increases for three years at the same rate that they’ve held since 2006. Vendio are expected tempt current Auctiva users with free unlimited listings on eBay and Amazon until the end of 2009 with a low monthly charge and no commission fees for the whole of 2010.

Where does this leave users though? Especially in today’s uncertain economic climate sellers used to free listing tools are unlikely to want to pay for them, whether from their current provider or from an alternate. Even worse by switching listing provider and relaunching listings they would lose all recent sales history with a corresponding drop in Best Match placement.

There only appears to be three options for users of 3rd party tools who are switching from an ePN funded model to a paid model – either start paying for the service, switch to an alternative (probably paid) provider or stop using the services entirely. I’m guessing that many sellers will probably choose the later.

Disclosure: Vendio advertise with TameBay.

14 Responses

  1. Surprisingly, I have never relied on ePN payments to fund an eBay service, so it can be done – basic functionality is FREE, if members like what they use, and want enhanced/upgraded functionality, then they pay a subscription fee , which is a flat £40 per year, less than £1 per week !

    The only site I have dependant on ePN payments is AuctionTrax – which uses PlaceOffer API, which by default (by eBay) is ePN tracked, and even then I share that revenue with users in the form of a 1% CashBack.

    Getting back to the Auctiva changes, the outcry is amazing, which just goes to show, eBay sellers do want services for free, and maybe now they will realise ‘somebody’ has to pay to create and maintain that service, and I am also wondering which other ‘free’ services will now either have to charge of close down ?

  2. Eddie you could not be more wrong. The auctiva mess is entirely due to their delusional new fees. FVF and listing fees for the current auctiva product are a fantasy. Auctiva is not a robust multi-channel tool. It is a basic suite of eBay tools and photo hosting. When your competitors are offering a service for $8-$10 a month you are not going to get customers to pay $50-$250 for it.

  3. The only valuable reason I see for this cut is financial difficulties: they just can’t afford having so many affiliates, so they cut where they want: 3rd party providers, or random account (see how many US accounts have been closed for no reason, generating frustation among the affiliates).

    The fact that eBay wants to generate incremental trafic and increase regular users sales doesn’t entirely explain this cut. The EPN commission system is derfined according eBay’s strategy: new active members + sales are rewarded. If they want incremental trafic, then can pay more for new active members generation and less on sales. Moreover, 3rd party providers help increasing sales, that wouldn’t have occured without them.

    I think eBay is loosing more and more credit with this affiliation program. They wanted to do it big on their own, and they are realising that it’s not easy, and they just can’t afford their ambition. In France they are asking agencies to manage their program through EPN platform, after having fired 50 people out of 60. In Germany, they kept their partnership with affilinet which seems to be doing a great job, and you can’t be a german affiliate through EPN.

    I’ve been an affiliate now for more than one year, and I don’t trust the program anymore. Transformation rate suddenly fell on new active members (which are very lucrative) for no reason. In the meanwhile, cuts are being made everywhere (affiliate exclusion…).

    I highly recommend affiliates to work with an affiliation platform like Affilinet in Germany, or Pepperjam in the US. At least you won’t have to cope with eBay hypocrisy, and you’ll be represented, as an affiliate, by a neutral 3rd party.

  4. Auctiva are just idiots to go from no fees at all for anything, to a huge monthly fee, plus image fee, plus most outrageously listing commission! Why should I pay auctiva anything when my item sells? When i dont need them. I can use Turbo lister for free. Today after having used auctiva for 3.5 years, I closed my account and moved everything over to vendio. I actually like vendio so much better, Auctiva functionality has always been terribly annoying, slow, convaluted, and Vendio was soo easy to move to. I created my free store and uploaded 210 existing ebay items into it in 10 minutes! Thank goodness they are taking the angry auctiva customers into their nest, FOR FREE!

  5. A number of Auctiva sellers have opted to open new stores on Buyitsellit, a division of InkFrog. Free or paid, it’s up to you.

    Auctiva still has my attention but I’m leaving the door open to other avenues.

  6. #5 I have to ask the question – if Auctiva functionality “has always been terribly annoying, slow, convoluted” why were you happy to carry on using it for three and a half years? It can’t have been that bad 😉

    To be honest I feel a bit sorry for them – for years they’ve provided services which, although I’ve personally never used them, thousands of sellers did. Now they’ve been forced to change their revenue model suddenly a service which was good enough for so many sellers to base their businesses on has changed to a terrible service.

    Price point aside, Auctiva must be a pretty attractive offering for so many sellers to have used them for such a long time.

  7. Yes Chris – Auctiva was VERY attractive to sellers whilst it was free, they loved it, but now they are having to pay for the same service, overnight it has become the spawn of the devil!

    Dreads the day PhotoBucket enforces its ToS and makes commercial (a business) users pay for image hosting LOL

  8. @ 9 Eddie

    Have you taken a look at the Auctiva forums ? The problem everyone is the pricing structure.No one at all is saying it should be a free service still. They want a cut of the FVF which is causing the biggest concerns. Then a limited offer was put out for $10 for 15 months upfront fee of $250 . They are in dissaray as their EPN was their main source of income. They have 100 emplyees and no real revenue to speak of and now expecting users to pay prices that are no where near their competitors.

  9. Kev – no not looked at their forums, but I do feel Jeffs pain, and also his staff team, who also must be unsure about their future employment !

    Obvioulsy Jeff has ‘run the numbers’ to try to maintain the status quo with a reduced membership, and I guess reduced staff, and I hope he has enough dedicated members to make it work for everybody concerned – after all they do have a great product, which many are forgetting about.

    Ironically I am seeing other forum posts where users are leaving, joining up with other ‘paid for’ services – where the new fee is probably greater than they would pay at Auctiva, it seems they are just joining the flock to leave ?

  10. I am a Powerseller and I loved Auctiva. It was so simple to load up a listing. Yes, what is upsetting everyone is the FVF and the extra listing fees they are asking for. I wouldn’t mind paying a small flat fee a month like alot of others but this isn’t the case. It’s almost to the point of it’s not worth your time and effort to sell anything anymore on Ebay with their HIGH FEES. I will be leaving Auctiva and probably just use Turbo Lister and have plain jane listings from now on. I’m not too mad at Auctiva, it’s just a shame that it’s come to this. I have noticed my sales trickling down and when they add sales tax to everyones sales on the internet it’s just going to get worse (sales-wise).

  11. Just to let Tamebay readers know – Vendio’s Bailout Plan for Auctiva users is ending soon.

    To recap: we are offering our ecommerce solution, Vendio Platform, for free for 2009 and just $10/month for 2010.

    Using our Platform, you not only get the eBay sales automation, but Amazon and comparison shopping engines (Google, Shopzilla, Shopping.com). We also have a robust, full-featured online store that is 100% free (and will remain free). For seller who want to reach buyers where they shop – Vendio is the best solution.

    Questions? Send us a tweet:

    https://www.twitter.com/vendio

    Thanks,

    Helen

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