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Thursday, August 24th, 2006

Ebay Hikes Rates, Where's Google?

 

Recently the world of online auctioneers saw the rates at eBay spike a little higher, and has a number of sellers very unhappy about the situation. This has also sparked a number of eBay listings surrounding this hike, like this T-Shirt “I survived the eBay Rate Increase of August ’06“. Wonder how many they will sell?

Finding information on the eBay rate increase was more difficult than expected. One would expect to find a press release, but a look at their PR page come up blank (). I’m curious, eBay sends out a ton of messages advertising free listing days and other various news to its users. I on the other hand did not receive a single message from them stating the rate increase. Would this not seem like a natural thing to do?

Many are turning to Google in hopes that the internet search giant will come out and develop a true eBay competitor. Today eBay has a virtual monopoly on the online auction business. While there are many auction sites on the internet, none can even come close to comparing to the immense power and spread of eBay. Where’s Google? Even Yahoo has an auction site, although I have to be honest, I have yet to try it.

This does bring up the question, why has Google not come out yet and created a competitor? Google seems to have a knack for this kind of thing. It seems to me that because of the power and revenue generated by AdWords ads, they could do quite well even offering a free online auction service. The ad revenue could far exceed the auction listing fees and combined with an even stronger online presence, Google could certainly overtake eBay and profit considerably.

A search of Google Labs, or even a general internet search doesn’t turn up anything official even suggesting that Google is thinking about going in this direction, but it does seem like a natural progression seeing as how they have roughly 50% of search already, and have developed a name trusted around the world.


7 Responses to “Ebay Hikes Rates, Where's Google?”

  1. Richard

    “…they could do quite well even offering a free online auction service.”

    Now that’s a good suggestion. I wonder if they don’t consider it necessary because adwords is already a good alternative to an auction. I used to find parts for my classic Volvo 1800 on eBay, but the last time I checked there weren’t any. So I did a Google search, and ads came up selling parts. I bought what I needed from one of those ads, from a guy who used to sell parts over eBay. It’s already cheaper than eBay if the keywords are not too expensive.

  2. Bidsonfire

    I to wondered if someone was going to start up an auction site that would be for the people and not the people running it. I know it takes money to run business and some hikes are needed. eBay is getting way out of hand. Google is large and making one of the best search engines out there.

    So I purchased an online auction site called Bidsonfire.com. It’s worth checking out. We have just put it up and its free to use. Most people ask why should I use yours because you don’t have much traffic.

    The answer to this is keep some of your products where you might sell them and redirect them to where they can buy them cheaper and save you a lot of money. (list fees)

    My wife is doing it as we read this. Once she sells something she has their email address. So she adds them to her email list then sends them the link to all of her stuff that they can get a much much lower price.

    The Online Auction Rules Have Change!
    http://www.lwbs.com

  3. furryfriendsshop

    Original message from Bill Cobb is below. It seems pretty obvious to me that eBay does not understand “its” real online presence as the world’s leading online marketplace. Personally, when I shop on eBay, I’m not looking at the stuff up for auction, I’m looking for the exact stuff I want in the online stores and most times, it’s there. So eBay, do you want to be an online auction house or an online retail superpower? (sorry for the long post)

    Dear furryfriendsshop,

    Since its debut in 1995, the eBay marketplace has continually evolved to meet the needs of the eBay Community. For the most part, the behaviour of buyers and sellers has naturally adapted to changing conditions – over time, we’ve learned to allow the marketplace to direct itself as much as possible. On some ccasions, though – in the interest of the eBay marketplace’s long-term vitality – we’ve had to step in and implement new policies, introduce new formats, or make changes to our fee structure to create needed incentives for eBay members.

    Put simply, we at eBay have two basic roles: to deliver the best overall value for buyers, and to maximize cash flow for sellers. As eBay has grown over the years, we’ve added various enhancements and tools to the site – but in essence, our “products” are two types of listings:

    Core listings (auction-style, auction-style with Buy It Now, and Fixed Price) deliver the signature eBay buying experience. For sellers, they’re the fastest way to sell inventory on the Internet – the only place where items typically sell within about two weeks.

    Store Inventory listings were introduced in 2001 and intended as a low-risk way for sellers to display large amounts of product in their eBay Store. This format employs low insertion fees and higher final value fees to encourage an abundance of inventory on the site.
    Amid all this change, one thing that’s remained constant: auction-style listings are the foundation of eBay. Auction-style and other core listings made eBay what it is today – and they’ll always be front and centre on eBay.ca and eBay.com. They account for about 91% of the gross merchandise value sold on eBay.ca and eBay.com. But recently, we’ve been wrestling with some troubling facts:

    Store Inventory listings now comprise about 83% of active eBay.ca and eBay.com listings on average.
    While eBay.ca and eBay.com core listings typically sell in about two weeks, Store Inventory listings on average take 14 times longer to sell. In some media categories, Store Inventory listings take more than 40 times longer to sell than core listings.
    And, when you compare our operations costs for an average Store Inventory listing and an average core listing – factoring in the duration of each – our cost to host a Store Inventory listing is more than 50% higher than for a core listing. In fact, current Store Inventory insertion fees don’t cover eBay’s cost of hosting them.
    It’s vitally important – to your business and ours – that we maintain a healthy balance between listing formats on the eBay marketplace, and ensure inventory conversion across the site remains strong. So we’re taking action.

    Today, I want to inform you of changes we’re making to eBay.ca and eBay.com – changes intended to rebalance the overall eBay marketplace by further distinguishing the roles of core listing formats and our Store Inventory format. In short, we’re improving the advantages of selling in core listing formats – and taking action to manage the proportion of Store Inventory listings – to ensure that the buying experience on eBay stays true to shoppers’ expectations.

    Core Listings

    All US dollar core listing fees on eBay.com will remain unchanged and all but two of US dollar core listing fees on eBay.ca will remain unchanged. So, for the vast majority of eBay sellers who use only these formats, their fees are not increasing. The two US dollar core listing fees that are changing on eBay.ca are Motors feature fees: Picture Show (US$0.75 to US$1.00) and Pocket Bike Picture Pack (US$1.50 to US$2.00).

    Also, in response to the requests of many large sellers, we’re raising the 10-item multiple listings limit to 15, effective August 22.

    Store Inventory Listings
    For those of you who operate an eBay Store, we’re making changes to Store Inventory listing fees, as well as to the on-site exposure we provide for this listing format.

    We’ll begin charging variable insertion fees for Store Inventory listings, as we do for core listings. Beginning August 22, eBay.ca and eBay.com Store Inventory format insertion fees will be tiered with an item’s starting price:

    These Store Inventory format insertion fees take effect August 22, 2006:
    Starting Price New Insertion Fee Current Fee
    US$0.01 – 24.99 US$0.05 US$0.02
    US$25.00 and higher US$0.10 US$0.02
    .
    C$0.01 – 29.99 C$0.06 C$0.02
    C$30.00 and higher C$0.12 C$0.02

    Some Store Inventory format final value fees also will increase, effective August 22, 2006:
    Starting Price New Insertion Fee Current Fee
    US$0.01 – 25.00 10% 8%
    US$25.01 – 100.00 7% 5%
    US$100.01 – 1,000.00 5% (no change) 5%
    US$1,000.01 and higher 3% (no change) 3%
    .
    C$0.01 – 30.00 10% 8%
    C$30.01 – 120.00 7% 5%
    C$120.01 – 1,200.00 5% (no change) 5%
    C$1,200.01 and higher 3% (no change) 3%

    Please note that for current listings, the new final value fees will apply only after these listings are renewed.

    For more detailed information on these fee changes, please see our fee changes overview.
    For some time, we’ve been working to identify the best way to display Store Inventory listings on the site. In the spring, we pledged to sellers that we would test a variety of ways to mingle their Store Inventory listings with core listings on eBay.ca and eBay.com. We’ve tested several alternatives and these tests showed the ideal approach is how we’re doing it today – that is, when a buyer’s search returns 30 or less core listings, we display up to 30 Store Inventory listings. This is what we’ll stick with going forward.

    However, starting in about one month, we’ll include an unlimited number of Store Inventory listings after all matching core listings when the buyer clicks the Buy It Now listings tab at the top of every search results page. When the buyer hasn’t selected this option, eBay.ca and eBay.com will display Store Inventory listings along with core listings as described above.

    How These Changes Affect You

    I’m confident the actions we’re taking are the right thing to do for the overall eBay Community. We’ll more effectively deliver on our buyers’ needs and expectations. And for sellers, these changes will ensure that eBay remains a differentiated and distinct e-commerce channel with fast inventory turnover.

    I know there’s a lot to digest here, and that you’re probably most interested in quickly determining if and how these changes will impact your business.

    A typical eBay Stores seller who uses Store Inventory Format – making no adjustments to his or her selling strategy following these changes – will experience an overall fee increase of less than six percent, based on our analysis of June selling activity. Of course, you need to clearly understand the impact on your business – which could be greater or less than six percent. To get started, please visit the seller resources page or consult the Frequently Asked Questions we?ve prepared. Also, use your seller support resources in Customer Support. Our CS teams are fully prepared to help you understand the effect on your business, and discuss your options for adjusting your eBay selling strategy to minimize impact to your bottom line.

    In addition – to help eBay Stores sellers make informed decisions about any changes to their selling strategies – we’re making eBay Marketplace Research Basic available to them at no cost for eight weeks, starting today. Through September 19, eBay Stores sellers can use this data
    to compare selling formats or determine how best to price inventory on eBay. You can access eBay Marketplace Research here.

    Additional Adjustments to Listing Fees on eBay.ca
    Lastly, although US dollar core listing fees on eBay.com will remain unchanged, there are additional adjustments to listing fees on eBay.ca.

    We will be lowering many of the Canadian dollar fees to reflect recent changes in currency exchange rates.

    Our US dollar fees on eBay.ca are aligned with the pricing on eBay.com. Over time, six of the US dollar fees on eBay.ca have become out of synch with eBay.com and these optional feature fees will now be realigned. These fees are:
    a) Core Listings:
    Motors Picture Show (US$0.75 to US$1.00)
    Pocket Bike Picture Pack (US$1.50 to US$2.00)

    b) Store Inventory format fees for 30-day listings:
    Listing Designer (US$0.05 to US$0.10)
    Bold (US$0.35 to US$1.00)
    Highlight (US$0.70 to US$5.00)
    Featured Plus! (US$1.75 to US$19.95)

    For more information, please click here.

    I’ll be hosting a Community Town Hall discussion Thursday, July 20 at 7:00 p.m. Eastern time, where I’ll answer your questions. Please click here for more details on the Town Hall, or to submit a question in advance.

    Thank you for your business.

    Sincerely,

    Bill Cobb
    President
    eBay North America

  4. Anonymous

    Wouldn’t surprise me that eBay hid the rate hike fees from the press. Just like the call it a 6% increase. The press should have questioned 6% of WHAT? It was (on average) 6% of your sales. NOT 6% of previous fees. More like 50%-75% increase Year over Year of FEES (Both Front-End/Listing and Back-End/Commission upon Sale). The link is here:
    http://pages.ebay.com/sell/announcement200607/overview/fees.html?ssPageName=CMDV:AB
    Thanks for Blogging! Come On GOOGLE! Tim K.

  5. exebayseller

    well,the fee hike was bad enough,but what has angered sellers even more is that Stores are now “invisible”in the way Ebay has MANIPULATED the SEARCH function!
    MANIPULATION,in fact is an other sore spot among sellers.
    Meaning,the way Ebay “spins” to have the media think we only suffer a 6% fee increase,when in reality it is as much as 500% for some sellers,depending on what they sell.
    Then,the MANIPULATION to coerce sellers to list in auction format,when auctions fees clearly are way overpriced,snd sell-through rate is extreemely low!
    MANIPULATION,again….with that 10 cent listing sale….where sellers were billed the FULL reg. price UP FRONT and will get a “CREDIT” later!
    This surely was a ploy to fool Stockholders via means of showing a huge (albeit forced)upswing in core listings and a false picture of added sudden revenue.
    Revenue that actually is owed to the sellers!!!
    I might add there were some very shocked sellers who hadn’t noticed the small print on this “special” 10 cent listing offer!!
    Trust? What trust!
    Come on Google! We’ll gladly pay reasonable fees!! Just don’t hide our product while ripping us off and manipulating us,the Media and your stockholders!!

  6. Scott Van Achte

    Thanks for your comments, and many thanks FurryFriendsShop for posting the letter and to Tim K for the link. It is certainly appreciated!

    Scott

  7. Mahesh

    Try http://www.swapblaster.com . This site has a unique approach to selling and it costs only 7c after coming out from its beta state. For the next 6 months the buying and selling will be free. The approach may be strange in the beginning but you will get a feel of it, trust me. Go through the wiki pages and spread this word around. I believe this will be an integrated solution for all your day to day needs, material and non-material. Let us make this movement successful and find some NIRVANA in the sphere of online transactions. Good LUCK and God BLESS AMERICA.

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