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How Will the New eBay Policies Impact Sellers?The eBay Seller's News, August, 2009, Volume 9, No. 11 eBay Tips, Tools, News and Resources for the Professional eBay Seller
eBay announced their latest round of policies last Friday. I blogged about the announcement, but decided to wait a few days to research and reflect on the impact the latest round of new rules will have on sellers and the marketplace. The first article below gives my initial views. Over the next couple of weeks, I will be updating our free eBook, The Future of eBay to reflect the new policies. I hope to have it ready by the next issue where you will have a link to download it. You can still download the earlier issue here. In the last newsletter I announced the availability of my latest book, Making Money with An Online Consignment Business. I want to thank all of my readers who bought a copy. The sales for the past couple of weeks have been excellent. There must be a lot of interest in eBay consignment selling, because the sales page for the consignment book is also getting tons of hits (and sales) from web searches on Google and Yahoo. I spoke with one of the large consignment sellers who gave me input for the book, and he reported that his sales for July were excellent despite the normal summer slowdown. Last Week, online shoe retailer, Zappos announced they would not be selling on eBay. Everyone wondered why --- and then the other shoe dropped when Amazon announced they were buying Zappos for $840 million in stock. Amazon plans to leave Zappos basically alone, but will give them access to their network of warehouses and distribution as well as access to the Amazon platform. I don’t know if you have been watching the health care debate in Washington over a new health care plan that would include a government option. I actually looked at some of the proposals online and they are very scary for self-employed folks who do not have access to group insurance plans. The Senate plan drafted by Senator Kennedy is currently the most favored of the three bills submitted. It will essentially force individuals, and the self-employed, into the government plan. I spoke with a health insurance expert who says that health insurance companies will find it difficult and expensive to offer individual health insurance plans because of the new rules. And, if you do not have a plan when the new bills go into effect, then the only option available to you will be the government-run plan. It is not yet clear that these rules will pass. A lot of senators and representatives have been hearing from their constituents and are backing away from some of the nuttier provisions. Besides the self-employed, the other group raising questions are senior citizens. Although the AARP has signed on, many seniors have not, as it is becoming pretty clear that Medicare benefits will be greatly reduced as a way to subsidize coverage for folks who can’t, or won’t, buy health insurance. Senators and house members are home on vacation now and plan to vote on the bills when they return to work in September. I am not going to get into politics in my newsletter, but as someone who is self-employed and will be using Medicare soon, I am paying attention to this one. So, no matter what your opinion, pro or con, now is the time to let your Senators and congress people know how you feel. You can contact your Senator on house members at this link: http://www.usa.gov/Contact/Elected.shtml. It is pretty rare for a Senator to actually read an email, but their staff members do and they report to the Senators on the mood of the people. Congress members often read and respond to email. But if you are abusive or sound like a nut case they just delete it. So be reasonable and polite and you will have the best chance of getting your views heard. August Articles: [top] 1. How Will the New eBay Policies Impact Sellers? The announcement from eBay covered a lot of ground. I don’t have the room here for a detailed analysis, so I will just give you the highlights for now. In the next issue I will cover some best practices and the new product pages, the search visibility tool and look at how sellers can make the most of the new policies to improve their business. But, before we get into the changes, as someone who has been very critical of many of eBay’s policies, I think eBay is finally getting it right. Overall the new policies are a big positive. These changes will cause some howling on the boards and in the blogs, and there will be a few pain points for some sellers, but taken as a whole these changes fix many of the problems the earlier policy changes caused. The changes are also good for buyers. They should improve trust, help prevent fraud and provide a better –and more consistent, buyer experience across the platform. We sellers who have been on eBay a few years all miss the “Good Old Days” when eBay was the wild-wild west. But those days are gone. We can grouse and complain all we want but they are not coming back. But all is not lost. eBay is still welcoming new and small sellers and some of the new policies will actually make it easier to start and grow a business as long as you are serious about running your business in a way that benefits your buyers. Probably the most significant new policy was the change to rewarding sellers based on their quality of service rather than their size. Although eBay didn’t say so, when I read between the lines it looks like the PowerSeller program will be eventually phased out in favor of the Top-Rated Seller Program (see below). So let’s look at the changes and what they mean: Top-Rated Seller ProgramStarting in October, a new eBay top-rated seller status will be added to the PowerSeller program to recognize and reward sellers providing great buyer experiences based on the new way to look at DSRs (very few 1s and 2s). eBay Top-rated sellers will receive the highest PowerSeller Final Value Fee discounts (20%), increased visibility in search results for Fixed Price listings, exclusive access to purchase Featured First --and a prominent Top-rated seller badge will show on their item pages. eBay will be testing The Top-rated seller badge in search results pages this summer. The current PowerSeller icon will no longer be displayed on buyer-facing pages including item pages. Here are the rest of the details on the top-rated seller program:
The nexus of the TSP is that eBay will now focus more on any low (1s or 2s) DSR scores. To remain in the program, the percentage of 1s and 2s will have to stay below 0.5% of all your DSR scores. On the high end, sellers will have to keep their average DSRs above 4.6. This will allow more sellers to receive the 20% fee discounts. A really big point that was hidden in the announcement is that DSRs from international buyers will no longer count. I had stopped selling overseas altogether because I always got low DSRs due to shipping and customs delays that were not my fault. Now these DSRs won’t count against you. (See below under International Selling). It will also be easier to control and enhance your DSRs. All transactions and DSRs from repeat buyers will count—great news for sellers who inspire repeat business from satisfied customers. And eBay will be placing stronger measures to control buyers who abuse feedback including a pledge to investigate all reports by sellers about buyers who abuse the system. Sellers will also be able to track the number of 1s and 2s from their seller dashboard.
New minimum standards for all sellers
Negative Feedback from Non Paying BiddersAnother important change (and one I really like) is the elimination of feedback posted by Non Paying Bidders, NPBs.
New Selling Practices PolicyA new Selling Practices policy will define clear standards for accuracy and professionalism in listings and listing descriptions, and for all stages of a transaction. Adhering to the new policy will be required for eBay Top-rated seller status in October and for all other sellers in early 2010. In short:
Free Shipping and AuctionseBay has been pushing free shipping because it works. There is no question that free shipping improves sales, but the problem comes when you use it in the auction format. In the past, the eBay search engine has favored offers with free shipping, but the problem with auctions is that you can’t really build the shipping cost into your price because you don’t know at what price an auction will end. So, when the changes take effect in September, eBay will continue to favor free shipping in fixed price listings, but will no longer advantage them in auction style listings (Yeay!). However, all listings with excessive shipping charges will be demoted. This is a little worrisome as it relies on a robot to do the calculation to determine if shipping is excessive. See the next article for more information. Optional Listing FeaturesHere is another change I really like: Most optional listing features (and their fees) are going away. Features to make your listings stand out such as Featured Plus, Border, Highlight, Gift services, ProPack and Homepage Featured will no longer be offered as of October 1. The Bold feature will still be available. Featured First will be available only to Top-rated sellers and won't be displayed when buyers select a different sort order than Best Match. When sellers purchase Featured First or Bold along with International Site Visibility, these features will be displayed only on the site of purchase to ensure that domestic listings get top visibility. This is a great change. There is no question that those features worked –but they were expensive, and if your competition was using them then you were forced to as well. I would often see listings at the top of search results that were from poor performing sellers. In the end, the elimination of those fees should save sellers money and bring more relevant searches closer to the top of search results. This will make keyword-rich titles and seller performance more important. Search PlacementeBay will once again adjust the search results algorithm. Trusted Sellers and items with a higher sell through rate in fixed price will be favored in search. Items ending soonest will continue to be favored in auctions. International SalesThis is an important change. I stopped selling internationally last year because it negatively affected my DSRs. This change will fix that glitch.
One thing that is not clear is the shipping and handling cost on international sales. It looks to me like you can only set one S&H charge that will have to cover both. I may be wrong on this and have reached out to eBay for some clarification. [top] 2. eBay to Change How Search Results are Presented in Best Match eBay will introduce a number of changes specifically designed to surface more relevant listings to more of the right buyers. Best Match updateeBay will continue to refine and improve the technology for surfacing the most relevant, best-quality listings from sellers providing the best buyer experience at the top of search results. And, eBay will provide expanded information to help sellers get the best possible exposure for their listings.
Many factors are considered in Best Match and can vary with different circumstances. But the bottom line best practices for optimizing your position in Best Match will be the same. List in the right format and the right categories, write accurate and relevant titles, offer good prices and reasonable shipping and provide good service. [top] 3. Dropshipping with Amazon Fulfillment Services Amazon offers a service that allows eBay, Amazon and small website sellers to set up their own dropshipping business. Dropshipping is a great way to make money. You do not have to purchase inventory in advance and you don’t pay for an item until it sells. And, the dropshipper does the work of shipping for you. All you have to do is list the item and send your order and payment to the dropshipper when an item sells. You can even keep your business going while you are on vacation. As long as you have access to the internet, you can sell from any place in the world. It sounds like the perfect business. If only it were that easy. The problem is in the math. Dropshippers have a higher cost structure than bulk wholesalers. They simply cannot sell products individually at prices as low as when they sell them in bulk. Let me give you a real example. Last year I was selling a popular set of Rachael Ray kitchen knives on eBay and Amazon. I could buy them in bulk for $55 set. But the price from a membership dropshipping company on that same set was $66 + $2.50 dropshipping charge. The knives were selling on eBay at an average price of $79. When I sold a set from stock I made a margin of $24 before fees. But if I sold the same item through a dropshipper, the margin dropped to $10.50. Now look what happens when you deduct the fees: My fees averaged $10.90 on eBay (eBay & PayPal fees) and $11.85 on Amazon. If you subtract that from my $24 margin, when I sold from stock I made a profit of $13.10 on eBay and $12.15 on Amazon. However if I used a dropshipper to fulfill the order, I actually lost $0.40 on eBay and $1.65 on Amazon. So obviously if you want to make money dropshipping you have to find a better way. There are two ways to solve this problem:
The other fulfillment company used by sellers today is Amazon. Amazon offers a service called Fulfillment by Amazon (FBA). FBA works essentially the same as Shipwire but FBA has some significant advantages. If you are an Amazon seller, FBA makes your items available for Amazon Prime which is a paid service that Amazon buyers subscribe to that gives them One-Click ordering and free two-day shipping. Also, if you sell on Amazon, your FBA listings on Amazon.com get the same treatment that Amazon gets. They sort them on the item price without the cost of shipping, which gives you an edge when competing for the Buy Box. If you sell on both Amazon and eBay, or even if you only sell on eBay, Amazon will still fulfill the orders for you. Currently Amazon ships your eBay orders in an Amazon box, but they plan to move to plain boxes in the near future. You can also use FBA to fulfill orders from a website. FBA fees are very reasonable. For example if you were selling a book that weighed about one pound, Amazon would charge you $0.90 to ship that order. A two pound electronic item would cost about $2.50. And, your customers get Amazon’s great customer service. [top] 4. Can You Make Money on eBay With Thrift Shop Finds? The vintage and collectible categories are some of the most reliable and consistent sellers on eBay. Garage sales and thrift shops remain the two best places to source these products. A lot of new eBay sellers are looking to sell the latest hottest consumer product in the mistaken belief that these are where the big profits are. There are profits to be made with iPods, BluRay DVD players, Tommy Hilfiger shirts and Coach handbags –but try finding them at low wholesale prices that allow the small seller to make money. The price competition on these items is such that you are lucky to make 10% profit after fees. Meanwhile, there are thousands of sellers who are cruising garage sales and thrift shops where they can buy items for $1, $2, or $5 that they can sell on eBay for $10, $20, $50 or more. It is not uncommon to find something at a thrift shop where you can double or triple your investment. Not too long ago I found a collection of Folk Music CDs that I bought at a Thrift shop for $10 that sold on eBay for over $160. Some other items I have found at Thrift shops include:
Vintage items sell like hotcakes. An old pair of shoes that are in good condition can fetch hundreds of dollars. Glassware, silverware, dishes, and jewelry can be purchased from thrift stores for pennies on the dollar and resold on eBay for small fortunes. It’s no wonder vintage items are among the most searched items on eBay today. But here's the most important reason you can be successful selling vintage items on eBay: 99% of the time no one else is selling the exact item you are selling. This means more demand, less competition, and much higher auction prices! You can find the same items at Garage Sales –and I often do. But what I like about Thrift shops is the one-stop shopping and most of the junk has been sorted out for you. I can find more to sell by stopping in two or three thrift shops than I can at a dozen garage sales. Recently I came across a great little book called Thrift Store Goldmine about finding treasures at thrift shops by eBay seller Brigitte Martinez. The book is not all that long but it is packed with money making information. Here are some of the highlights of Bridgett’s book:
Check out Thrift Store Goldmine and you won’t be disappointed. [top] 5. Breaking the ClickBank Code for Profits If you have been selling online for a while you have probably purchased something through ClickBank. ClickBank is the oldest and largest information products site. Since they started ten years ago, ClickBank has paid out over $1 Billion in affiliate commissions and their clients have earned over $1.3 billion selling their information products. The secret to their success is one of the largest affiliate networks on the web and the easy-to-use affiliate system. When you think of ClickBank you usually think of products related to making money –and that is probably the largest category of products on ClickBank, but there are thousands of products sold on ClickBank that have nothing to do with making money. You can buy eBooks, videos and other info products that range from learning a language, to playing a guitar to improving your golf swing. There are literally thousands of products available on hundreds of topics –and most of them qualify as niches which mean you can find a niche to market to. ClickBank pays very generous affiliate commissions. Take a look at this image below.
I know this is a little hard to read, but if you look closely you will see that the first product about making energy at home pays a commission of $33.37 per sale. The next one on How to Build a Chicken Coop (now there is a niche) pays $19.99 and the Secrets to Dog Training pays $31.47 per sale. So, how do you make money with ClickBank? Basically it is all about creating content that people are searching for. And you don’t need a website. You can do it with a blog, twitter, from social networking sites such as YouTube, MySpace, Facebook or others. You can even use eBay Classified Ads or Craigslist to drive traffic to your links. I have been using ClickBank for years. Whenever I find a product that I like (I always buy the product first), I simply go to ClickBank, grab a link and put the link into my newsletter or blog or perhaps in an article on my website. I have also used Twitter to recommend ClickBank Products. You can see an example of how I use ClickBank in the article above. The book I recommend on buying from Thrift shops is actually a product that is delivered by ClickBank. I recently found a product about making money with ClickBank that was recommended to me by my friend Steve Lindhorst who wrote the best-selling book about selling on Amazon called Selling On The River. The product is called The ClickBank Code. This is a very clever and easy-to-follow system that shows you how to set up free instant websites with landing pages that promote ClickBank products that you select. I have been doing a variation of this successfully for years and it works, but my system relies on websites I already have and that have traffic. The ClickBank Code shows you how to do what I do simply and quickly. One word of warning: If you decide to buy the ClickBank Code you are presented with several One-Time-Offers (OTOs) to add to you order. They are basically an attempt to upsell you. The offers are actually not bad, but although OTOs work I am not a big fan of them. I find that you can get overwhelmed if you buy a lot of things at once. So take a look at them –and if one of them appeals to you, then go ahead and buy it (they all come with a money back guarantee), but my recommendation is that you just try the ClickBank Code and get that working before you do anything else. Those other products will always be there to purchase. [top] 6. Wholesale Sources for Books, Movies & Music Despite the economy the media category is hot. When the economy slows down people still like to be entertained. The sale of books, movies and music –both new and used are doing well on both eBay and Amazon. If you want to learn how to sell used books, take a look at my best-selling book, How to Make Good Money Selling Used Books on eBay, Amazon and The Internet. But, if you want to sell new media products, here are a few wholesale sources you can try:
Ingram Book Group FaithWorks Launched in 2000, FaithWorks provides sales and distribution for about 300 Christian publishers and music labels into the Christian marketplace. Formerly a division of National Book Network, it has been bought by Send the Light, a UK publisher. Associated Publishers Group Discounts books approximately 65% of retail, plus storage, returns, and catalog fees. They distribute about 2,500 titles. A division of Hambleton-Hill Publishing, this book distributor absorbed many publishers, personnel, and operations of Atrium Publishing Group.
Spring Arbor Distributors
Gardners Books DVA is a great distributor of specialty DVDs. They have a specials program for small quantities (1-5 each) and a true wholesale program in you want to buy in large quantities. MusicTins is a distributor of classic music group collections sold in a tin box. You need to use the contact form on the website to get the wholesale pricing info. Mountain View Movies has a large collection of old movies and DVDs on specialty subjects. International Wholesale Video carries Health videos, Science videos, Mind Body Sprit Videos, Fitness Videos, Cooking Videos, Travel Videos, Pet Videos, Horse Training Videos, and selected books. A2Z CDs is a sweet little company that specializes in non-music and non-entertainment CDs. They have lots of educational, historical, informational and entertainment titles. Provident Music Distributors distributes New Age and new artists. Very COOL web site That’s it for now. Look for my mid-August update in a couple of weeks where we will go deeper into the new changes on eBay. Skip McGrath P.S. If you missed the last issue, click here to read it.  Click Here. Double your traffic. Get Vendio Gallery - Now FREE! |
 
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