eBay have announced another raft of changes today, this time to fees and selling formats. As ever, there’s dense detail, unanswered questions and a great dea of speculation. Sellers will be getting calculators out to try and understand whether these changes advantage them. They’ll also need to work out how they can adapt and make the most of the changes when they roll out on September 24th.
When considering the changes, I think it’s worth remembering a few things:
– Buy it Now listings are still growing on eBay and represent 43% of sales. Recent results have been lack-lustre.
– Amazon is going great guns. The third-party marketplace where businesses sell goods on Amazon is a rip-roaring success and it’s anencroachment on eBay’s territory.
The Changes in a Nutshell
Simplification of selling formats. Previously there have been auction and Buy it Now (BIN) formats. BINs could be single items, multiple items or Shop Inventory Format (SIF). SIF was available to eBay sellers who owned an eBay Shop and SIF was cheaper than a BIN, but less visible in search.
Under the changes there’s now only one BIN format, good for single or multiple items. SIF will disappear altogether. This new BIN format will last for 30 days (SIF could last for for 30, 60, 90 day or be Good til cancelled. Normal BINs could last a maximum of 10 days) and will cost a flat rate of 40p, regardless of the value or number of items for sale and be fully visible in Search. The new BIN will not be visible internationally (ie UK BINs will not show on eBay.com). BIN FVFs will increase slightly (apart from on items that sell for more than £600) and range between 9.9% and 1.9%.
An eBay Shop still has value: it’s how you can get BIN listing fee reductions but Shops subs have increased. A basic Shop rises to £14.95 (from £6) and your BIN listing fee will be halved to 20p, a featured Shop rises from £30 to £49.95 and nets a 5p BIN insertion fee, and an anchor shop will cost £349.95 (up from £300) and a BIN will only cost a penny to subscribers.
For the new BINs, the new changes to search known as ‘Best Match will not rely on ‘Item Ending Soonest’ as the dominant search criteria. Rather, the seller’s feedback DSRs (Detailed Seller Ratings) will be critical. In a new development, listings that have generated a sale will enjoy greater prominence.
Gallery will be free. Notwithstanding the 1p promo that’s been held over the summer, this is a reduction from 15p and good news for buyers and sellers.
Auction insertion fees will remain the same. There will be some minor changes to auction Final Value fees. Tech and Media listing fees are being reduced but FVFs are unchanged. Featured First will be a new feature aimed at sellers who want to buy greater prominence in search.
For more details, there’s a good digest of the changes on Tamebay. The Guardian and Businessweek have also made useful comments. eBay’s official pages are here.
What does this mean?
BIN becomes the de facto default listing format on eBay. Whilst it’s hardly the death of the auction, when you’re selling and making a choice of format, the 30 day BIN listing for 40p represents extraordinary value. I can see sellers who might otherwise use auctions, using BIN because it’s such a good deal for 30 days exposure. eBay is clearly taking the fight to Amazon but Amazon’s Search is superior when it comes to commodity style sales (and postage is fixed) so eBay has to do it better in some way. I’ve recently given up trying to find what I want on eBay and gone to Amazon because the finding experience was, frankly, poor and tricky. From a selling perspective, Amazon makes selling such items easier with a simpler listing process and better catalogues.
These changes are bad news for volume sellers of low value items. These are sellers, in categories such as crafts, who represent a loyal army of customers, who have been successfully using their Shop to merchandise their huge inventories. It’s difficult to see how these guys can continue to operate with such tight margins without the very low SIF fees. It’s quite easy to see why so many are complaining that eBay doesn’t want small sellers such as themselves any more.
Retailers, who have multiple items and a selection of key lines, will love these changes. Indeed, if you were a big High Street chain who wanted to tap into eBay, this is what you’d want to help you punt out your inventory. It will also benefit those sellers who have successfully been combining SIF and BINs to sell new and in-season goods.
So, buyers have been served well by changes to Feedback earlier in the year. BIN sellers will (broadly) like today’s announcements. It’s time to look after the auction sellers, especially those in collectables, antiques and the like. These categories are what give eBay the colour, sense of fun and amusement that has been critical in generating such a loyal following. Many will be feeling a bit bruised and unloved. Many have commented that eBay doesn’t want them because it’s trying to ditch the ‘car boot sale’ image but these guys are critical. Rather like the locals propped up at the bar in your local, they are dependable and you need them when times get tough.
Sellers have had to swallow several very large, very stodgy servings of change this year. Most are willing to evolve and be nimble and imaginative but it is disruptive to their operations. I think most would appreciate a period of calm, especially in the run up to Christmas 2009.