eBay Increases Seller Fees and Announces Other Site Updates and Changes

The eBay Seller's News, January 2007, Special Mid-Month Issue

Learn How To Sell More on eBay with The Newsletter for Professional
eBay Sellers by:  Skip McGrath

In This Issue:

1. Musings
2. eBay Increases Seller Fees
3. Changes Coming To eBay's Search
4. eBay Makes Bidder IDs Private
5. FREE Wholesale Sourcing Tele-seminar, Wednesday Jan 17th
6. eBay and PayPal Expand Buyer Protection Program But Limit it To Transactions Through PayPal
7. PayPal To Introduce Electronic Keychain Security Key

"Success is the sum of small efforts, repeated
day in and day out."
~ Robert Collier ~
 

1. Musings

This is a special update issue designed to give you my take on the eBay fee increase and some of the new initiatives being rolled out by eBay. So far only a few of the new changes have been announced. As these things go, eBay will probably announce more changes the day after this goes out.

I don't like to put out special issues that often, so the best way to keep up with the changes is to check eBay's Announcement board frequently and then check my Make Money on eBay Blog for my take on the new features. If you use Google, Yahoo or MSN as your home page, you can add a blog feed to your home page by clicking on the logos for those pages at the top of my blog and following the simple instructions.

I am going to try and keep this issue a little shorter than usual. You can read about all of these changes in greater detail on the eBay Announcement Board and these topics are the subject of lots of message boards posts on eBay. Although you have to sift through all of the complainers and grouses, many of the posts are very thoughtful and informative. Click here to access the eBay Community Pages.

Mike Enos of PlatinumPowerSeller has come out with a really concise FREE eBook aimed at new sellers. The book is free and you can download your copy here. Even if you are an experienced seller you might want to take a look at this as there are some really good ideas and some good information about mastering the basics which is always a good idea for experienced sellers to revisit.

Mike and I don't agree on everything --but that is OK. He gives a somewhat different take than I do on some aspects of selling on eBay, but we agree on the basics and he continually surprises me with his imaginative insights and techniques.

Mike's training materials are very good and he stands behind his products so don't be afraid to try some of the resources he mentions in the book. You won't be disappointed.

In late breaking news, eBay announced this week they will acquire the leading internet ticket seller, StubHub for $310 Million. This is one acquisition that really makes sense for eBay. eBay's tickets category is huge and essentially eBay acquired a major competitor. You can read more about this in my blog post at: http://blog.skipmcgrath.com/public/blog/135199

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2. eBay Increases Seller Fees

Sellers were bracing for the annual January fee increase and it came on January 3rd to take effect on January 30th.

The fee increase notice on January 3rd should have started out "Happy Birthday Skip, here is your annual eBay fee increase (Jan 3rd was my birthday if anyone wants to remember that for next year)."

When the announcement came I opened the email with some trepidation, but was pleasantly surprised. While no fee increase is ever welcome, as fee increases go this one was not too bad. Instead of an across-the-board increase, eBay raised one level of auction listing fees ($1.00 - $9.99 level) by a nickel and the final value fee for items selling from $25.01 to $1,000.00 by 1/4 of 1% from 3% to 3.25%.

Predictably there was a lot of grousing on the eBay community boards, but in reality this increase will have little impact on seller's profits.

Although this does not sound like a lot, it will have a huge impact on eBay's profits as the bulk of eBay's sales are in the $25 to $1000 sweet spot. eBay stock jumped over 4% in one day on the news.

So what does this mean for eBay sellers? I looked at one of our most popular selling items. It is an EZ Cube Light Tent set that sells for around $197. The starting price is higher than $9.99 so there is no change in the listing fee. The current final value fee is $6.47. With the new fee increase the final value fee increases 43 cents to $6.90. I am not excited but I can live with it.

There were other increases related to eBay motors. Rather than cover these here you can read the announcement at: http://www2.ebay.com/aw/core/200701.shtml#2007-01-03144839

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3. Changes Coming To eBay's Search

Earlier this week eBay announced the first of many changes to come to eBay's venerable search engine. eBay now allows bidders to search for results by category.

This is a nice move and will help buyers refine their searches to make them more relative, however it may slightly hurt sellers, as items of similar interest, but from a different category, may not show up.  This could ultimately benefit eBay by incentivising more sellers to use List in Two Categories which earns additional fees for eBay.

This is only the first change however. eBay has been beta testing a major overhaul of its search engine for several months. I tried to get in on the test but was refused. I have spoken to a couple of sellers who are in the beta and they are keeping eBay confidence and won't reveal any details. So far the feedback is mostly positive --but mixed. Hopefully eBay will really get all the bugs out before rolling it out across the entire user base.

You can read the full text of the announcement at this link: http://www2.ebay.com/aw/marketing.shtml?ssPageName=f:f:US

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4. eBay Makes Bidder IDs Private

Two months ago I told you about a new initiative on eBay Motors called Safeguarding Member IDs known around eBay as SMI, and predicted that eBay would roll this out site wide soon. Well it hit this week. For the moment SMI only covers items that sell for $200 or more, but I am fairly certain it will be expanded to cover all items by the end of this year.

What is SMI? This is a feature that hides the bidder's ID from other bidders who view an auction --but not from the seller. According to eBay, the purpose of SMI is to reduce unwanted SPAM and fake Second Chance Offers. After SMI goes into effect, when you view an auction listing, instead of seeing a bidders ID such as insomniac_bidder4U, you will see bidders listed as: bidder 1, bidder 2 and so on.

Rob Chesnut, Senior Vice President, eBay Global Trust & Safety made the announcement on the eBay Announcement Board today. His comments included the following:

"SMI adds a new layer of privacy by replacing specific User IDs with aliases (bidder 1, bidder 2, bidder 3, etc.). To ensure buyers continue to feel trust in the bidding process, SMI also provides an updated Bid History page with aggregate information about the bidders involved in a given listing, as well as their other recent activity with the listing's seller.

As a result eBay.com and eBay.ca will be launching SMI later this week. SMI will impact listings on eBay.com that start at, or reach, a bid level of $200 or greater. On eBay Canada, it will impact listings above the C$220 level."

SMI has raised some concerns among members. One of them is the fear that hiding bidder IDs will lead to more shill bidding. eBay claims to have a sophisticated shill bidding detection system. Although they do, --and it's pretty good, it is not foolproof. I often see activity that looks like shill bidding. Most recently it was from a seller in BC Canada who was selling unauthorized copies of my materials. When I looked at his low feedback it was mostly from bidder IDs with similar names and all located in nearby Canada locations.

Although I applaud efforts to stop spam and fraud, the lack of bidder IDs also removes some of the personality that makes eBay fun. I often wonder if eBay's management still understands the importance of the fun quotient to eBay buyers and sellers.

You can read the full text of both announcements at this link: http://www2.ebay.com/aw/marketing.shtml?ssPageName=f:f:US

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5. FREE Wholesale Sourcing Tele-seminar, Wednesday Jan 17th

Please join me this Wednesday at 4:00 PM Pacific Time - 7:00 PM Eastern time for a 45 minute free Webinar on Sourcing Products for Your eBay Auctions. I will be joined by Chris Malta, product sourcing editor for eBay Radio in a 50 minute live Webinar. The topic of the webinar is: Using Multiple Methods to Source Products for Your eBay Auctions.

Here is the link to register. Register early as the number of slots are limited:

https://www.gotomeeting.com/register/425496644

Chris and I will cover multiple methods of sourcing products for eBay including small quantity (light bulk) wholesalers, Drop Shippers, importing, wholesale trade shows, and large quantity wholesale distribution.

The online live presentation will last approximately 40 minutes followed by 10 minute Q&A period. We are using the services of GoToMeeting.com. This will require you to download a little piece of script which is perfectly safe for your computer. Please be sure your pop-up blocker is turned off before signing in for the meeting.

When you register there is a survey question about your eBay business. Answering the question is required, but we are not capturing any personal information or individual answers. The survey box will only show us the results -as in, how many people gave which answer.

I look forward to seeing you at the meeting and promise an educational experience worth your time.

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6. eBay and PayPal Expand Buyer Protection Program But Limit it To Transactions Through PayPal

eBay and PayPal announced a major change to their respective buyer protection programs this week. This is a good news/bad news story. First the good news:

• PayPal will begin offering $200 of protection with NO processing fee on ALL PayPal transactions for tangible goods in the U.S. (excluding Live Auctions and vehicles). In Canada, all PayPal transactions for tangible goods will be covered up to $315 CA. There is no processing fee, no minimum purchase price, and no seller requirements.

• PayPal Buyer Protection will be increased to cover up to $2,000 for tangible items listed by qualified sellers in the U.S. This is a huge increase in coverage for high-end items being bought and sold on eBay. It doubles the current $1,000 coverage offered for tangible items listed by qualified sellers. And over 75% of listings in the US qualify. (Note: in Canada, tangible items listed by qualified sellers will be covered for up to $2,000 CA$).

The good news in the announcement is the increase in coverage and the elimination of the processing fee. What is not obvious is that you must use PayPal to get the protection. eBay's current protection program will be discontinued. This program also covered payments by offline methods such as checks, credit cards and money orders. Now buyers will have to use PayPal to get the protection.

As most people use PayPal today this isn't a huge problem and personally I will rarely buy a very expensive item from someone who does not. Much of the fraud in high-priced items stems from sellers who want to be paid in cash, money order or certified check, so I can see where eBay is going with this.

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7. PayPal To Introduce Electronic Keychain Security Key

In a move to introduce more security to PayPal where large sellers keep large amounts of cash, PayPal is testing a physical security key. This is a little electronic device you can place on a keychain that generates random numbers every minute. If you sign up for this option, you would have to type the number on your keychain screen into PayPal when you log on. This way if someone had your username and password they still could not access your account unless they had your security key.

This is a really neat system. It is optional and the cost of the key is only $5.00. At the moment PayPal is taking orders but the keys are not ready to ship out yet. You can get more information at this link: https://www.paypal.com/eBay/securitykey

Well --that's it for the special update. Look for my regular February newsletter the first week of February.

Skip McGrath