Levers that eBay can pull

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eBay is a bit of a beast, and most of the time pretty uncontrollable by those that run the company. It must have seemed such a neat idea when Pierre set up a person to person auction site, but today’s marketplace bears little or no resemblance to the eBay of the 1990s.

It’s a bit like steering a boat. If you’re in a little motor launch it’s quite easy to change direction and steer where you want to go, but if you’re in a massive oil tanker or container ship it can take several miles to change direction and as much as five miles to come to a stop.

With the latest seller release we’ve heard, read and listened to a lot of viewpoints, it’s good for some sellers, it’s disastrous for others, so today we thought we’d take a look at how eBay can control the marketplace.

LevereBay have a limited number of levers that they can pull and push to affect marketplace behaviour.

Fees

Fees are the obvious one and free listing days and other promotions are one way they can attract inventory to the site. With the latest seller release eBay have effectively given sellers free listings for eBay UK with any eBay Shop subscription but it doesn’t stop there.

eBay are constantly being accused of turning their backs on auctions, but the latest seller release aims to encourage more high value auctions by dropping the insertion fee price from £1.30 down to as little as 15p per listing.

Search

How products are presented in search results is another of eBay’s levers. It makes sense to put the fastest selling lines at the top of search results which is what the recent sales aspect of Best Match does. However eBay also use seller status, price and a whole load of other attributes to try and surface the best possible deals and ideally the one deal that the buyer won’t be able to resist.

Feedback

eBay Feedback was always a great idea, but it doesn’t really work for today’s marketplace. Postive/Neutral/Negative’s weren’t good enough so we got Detailed Seller Ratings (DSRs). Measuring the best DSRs didn’t work so eBay started to measure low DSRs. Then they measured open and unresolved cases and even here they failed to differentiate the very best sellers from the simply good sellers. eBay have virtually given up on feedback as a way to influence behaviour, not that it’s been abandoned, but they’re starting to mandate behaviour instead.

Mandatory Policies

Expect more of this in the future, eBay have just mandated that all sellers will offer 14 day returns on all listings (Fixed price and auction) and that sellers will specify who pays the returns costs. Businesses are supposed to follow the law but so many weren’t that eBay have made it compulsory to do so for returns.

Free Postage

Let’s face it eBay never cracked the fee avoidance trick of loading the item price into the postage. That’s why it’s no surprise to see fees charged on postage as well as the item price. This change also makes it more attractive to offer free postage where possible as you’re paying fees either way.

Cross Border Trade

eBay want you to sell overseas and they’re going to make it more attractive to list on overseas eBay sites than to list on eBay UK with international availability. Even with a Featured Shop eBay are giving a ton of free cross border insertion fees and discounted EU listings and the whole lot are free with an Anchor Shop.

I’ve heard a fair amount of reluctance to list on foreign eBay sites, but it’s time to grasp the opportunity and start using those free listings. Yes it’ll mean time and possible cost investment in channel management software, but that in itself will streamline your business and save time and money for your UK sales.

Cross border trade is a lever that eBay are pulling hard, the UK isn’t exactly washed up as far as sales go, but there’s most certainly a lot of competition. Selling in other territories with much lower competition not only gives easy expansion for your sales but potentially greater margins as well.

Understanding the levers

We don’t like everything that eBay do. Some may vociferously disagree with changes that they make. On Tamebay we tend to set aside what we like and don’t like in favour of figuring out how to work best with the changes and offer strategies to maximise profit.

It’s important to look beyond the changes themselves to understand why eBay are pulling the levers that they’re using. eBay have access to all the data and know through rigorous testing the effect changes will have. Look at the overall seller update and you’ll see without a doubt that it’s is all about encouraging more listings and especially more listings on overseas eBay sites.

Are you rolling with the changes or fighting the changes? If you’re not prepared and ready to take advantage of listing overseas is it time to change strategy and work with eBay rather than fight against them?

22 Responses

  1. I can’t/won’t be able to achieve TRS with the new rules changes,

    So I loose £80 per month in additional postage fees, they give me back £20 in “free” listings as I have a shop and I am a business seller,

    So a loss of £60 per month for me which ebay will use to subsidize non business sellers with a shop a boost with free listings, and the general public reduced listing fees,

    Loosing TRS will ultimately reduce my sales as I won’t be as visible in Best Match, the new picture rules will mean every listing will look the same, and will share sales amongst a larger selection of sellers,

    Ebay have shown their true colours, legitimate businesses on ebay are now getting penalized, as now private sellers pretending they aren’t businesses who compete directly against us but don’t need to pay tax, are on almost a level playing field.

  2. I always play along with eBay. It does not matter if I like it. I just think there is no point fighting them.

    I still moan about the amount of work it creates though.

    No one has explained to me the benefits of listing on other sites.

    I sell a lot of stuff to Australia. If I list directly on their site I understand I will not get my TRS discount so it will cost me more.

    Will I get better visibility?

    Can anyone explain the benefits?

    Thanks

  3. lots of things to consider rather than free listings when selling on another site, paypal fees, currency exchange rates,
    buyer awareness of your location the postage costs and shipping time are aproblem ,also what you sell influences where you sell ,if I were johnny foreigner I would be looking for typically British items Directly on the UK site not on ebay bongo bongo land, lol

  4. Always roll with the changes unless you have a better idea how to access such a huge market. Sometimes it is uncomfortable, inconvenient, requires process change but is there really an option?

    The one thing that infuriates me is Best Match. Most buyers will think this means the item nearest their requirement and may well go for the first shown, and although it has improved, there are so many barking results out there that frankly buyers are misled by ebay. Doesn’t really fit in with their “safe place to trade” attitude for either buyers and sellers. Typical examples are the best match item being double the price of other sellers who have better feedback and equal speed of despatch. There is something very wrong with the algorithm when it produces such daft results. In some cases the apparent best match actually looks like almost the worst deal on offer from any seller.

  5. Re: How products are presented in search results is another of eBay’s levers.

    Within eBay UK do eBay use profiling of the potential buyer when presenting search results? If there are multiple sellers offering a similar product is location a factor in how best match presents results? Is search manipulated to generate maximum profit for eBay?

    Any ideas on this Chris?

  6. All of this is quite pointless until they fix the basic search function on eBay.
    Currently it is broken and when combined with the ‘spamming’ of most categories with unrelated products and multiple offers of the same item the buyer experience is now appalling.
    They can forget most of these changes and just get and fix the core issues with the site and the basic buying/selling experience.
    Is that too much to ask?

  7. Another of my eBay accounts gets limited due to to low DSR’s.

    All I do is register my bank card as lost, get a new one and register a new account.

    This lets me manage the accounts and the items. Splitting the truly second hand items that with the best intentions in the world may attract negative feedback and low ratings. Saving the almost new stuff for my other accounts which keeps them safe from the crazy buyers out there. I’m beginning to think the items I sell attract the craziest of them all.

    Buyers have no worrys at all, which is great but for Christ sake stop them ruining other people’s accounts.

    Purchasing an item and then moaning about the postage is pathetic. You chose my item over millions of others and were aware of postage costs, and you still moan??

    I encourage and beg, please someone create an alternative.

  8. Lets be fair. If there is a truly bad Trader on ebay surely we all would want them removed. The DSR system in that case has a validity. The problem is that there are very few truly bad traders(and often those that do exist seem not to be affected by poor DSR’s).

    The DSR system is used like an old fashioned Blunderbus or perhaps a sawn off shotgun to blast often totally innocent Traders by ebay.

    In my case last year I was targeted by a Fraud. He wanted the Books and his money back and was also determined to hurt my trade. He got the Books and then lied to ebay that he had not. ebay backed him to the hilt. He then put in absolutely stinking DSR’s which ebay accepted without question. They were totally contary to every other DSR/Feedback that I have ever received. Yet ebay accepted them without question and hit me with the full set of restrictions.

    I know that I am not alone in this but I suffered serious harm, and I am still annoyed about it over 12 months later. Although of course I got on with it after the restrictions were finally taken off. But it should never have happened. ebay should be able to see that the DSR’s were totally out of line with every other DSR/Feedback that I have ever had which is why I run a steady 100%.

  9. The amoral “law unto itself” entity that ebay has become can be traced back to John Donahoe becoming CEO around early 2008 and the introduction of the DSRs and a number of other egregious policies: PayPal holds of whatever length, seller limitations, forcing sellers to only take PayPal (or at least not allowing them to announce that they can and will accept money orders), the fee hikes of course, Guardrail or Quick Decline and trending. All of this has combined (by design) to create a hostile environment of fear and distrust for small sellers at ebay. All of it combines to drive small sellers off through restrictions and suspensions or because they wake up to what is going on and leave by choice. Because of the nature of predatory capitalism, ebay survives and thrives because there do not appear to be outside mechanisms (SEC, FTC, Attorney General’s offices, Senators, Congressmen) reacting to the illegalities being perpetrated by ebay. Are they blind to it, unaware of it, or “bought off”. I lean toward a combination of the three, which is why a good investigative report by some major television network may be needed to really get the ball rolling in terms of exposing ebay publically and getting a real investigation into by authorities capable of doing something about it. I personally lean toward a House/Senate Committee Investigation of ebay (televised of course) along the lines of the Watergate Hearings or the Clarence Thomas hearings. If dozens and dozens of sellers who have suffered unjustly from ebay could testify before government officials UNDER OATH factually and truthfully this would be DAMNING to ebay. The further grilling of ebay top brass as they attempt to justify their egregious actions would be the icing on the cake. I urge anyone reading this to write to your Congressman or Senator in Washington DC (you can Google contact info), state your case accurately, and request an investigation into ebay. Snail mail still works better for OFFICIAL matters, but don’t hesitate to email or call their 800 numbers as well.

  10. to be fair to ebay they need to keep buyers coming back, they need to limit the excesses of some sellers, at this moment its only our ego and pride that feedback and dsrs effect, as we dance to ebays tune, though when it hurts our pocket we will stop dancing

  11. ebay search can’t just throw up the fast selling lines; think about it- no one would sell anything. So, ebay search is flawed then; has to be to give everyone a crack at the whip. So really, its as it always has been, check your keywords. Not sure how putting average 10% on postage helps International sales, but perhaps that is why they want you to list on other sites – traffic is falling , no one is bothering? desperate times for ebay its like the Dire Straits song , “money for nothing, and the kicks are free..” should be ebays theme tune?

  12. ebay search can’t just throw up the fast selling lines; think about it- no one would sell anything. So, ebay search is flawed then; has to be to give everyone a crack at the whip. So really, its as it always has been, check your keywords. Not sure how putting average 10% on postage helps International sales, but perhaps that is why they want you to list on other sites – traffic is falling , no one is bothering? desperate times for ebay its like the Dire Straits song , “money for nothing, and the kicks are free..” should be ebays theme tune?

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