If you were looking to dirupt eBay's business model, you couldn't pick a better time.
While considering a price adjustment on a high-value item I'm selling, I went to their fee calculator to explore some other price points. I was mystified to see not only the fee I expected of ~$55, but a 'New Fee' of $123. Thinking I'd made a mistake, I explored further, and noticed that as of April 16, casual sellers who don't have an eBay 'store' will be charged 10% of their final sale value in fees. Store owners will keep the existing fee schedule, but it will cost them a monthly fee beginning at $16/mo. Add in the 3% Paypal fee and they're taking a very large cut. For many categories of goods, this represents a doubling of current fees.
I only discovered this by accident; I listed the item yesterday and there wasn't any warning about an impending fee increase. They haven't sent any notifications by email or to my eBay mailbox either; seems this is being rolled out quietly.
Now I'm lowering my price in search of a quicker sale rather than risk paying an extra $70.
EDIT: I've just realized that this fee increase begins right after Tax Day in the US - when many people list and purchase items because it's time to pay taxes or receive a tax refund. I've always defended moderate eBay fees because they provide relatively smooth access to a big marketplace, but not any more - this is pretty sleazy.
Interesting to see this move by eBay - we've found that high fees for casual sellers is a huge pain point. By focusing their fee structure towards power-sellers they also happen to be alienating a large group of casual sellers.
We're trying to solve this problem (among others) with our product SellSimple. Free app, free postings, and 5% if it sells.
What are you doing for fraud? I can tell you from (too much) experience that as soon as you gain any traction in being the "broker" between parties in transactions, you will become a magnet for a non-stop, cat-and-mouse, painful game of fraud.
After years of fighting and with a dedicated team, eBay is still losing that battle.
And, as the "conduit" for this fraud, you will be blamed by both buyers and sellers, which is obviously no good for your brand.
Not to be negative, but fraud can literally put you out of business.
Totally valid points and it's something we're building for everyday.
We've already encountered a bunch of fraud early when our system was less developed. Luckily we caught all of those and have had time to grow / build a plan of attack.
We'll never be able to eliminate fraud - but we can make it a pain in the a for a black-hatter to use SellSimple over the hundreds of alternative places.
Few ways:
1. Escrow via Balanced
2. Shipment Purchasing, Tracking & Confirmation all in-app.
3. QR code scanning to release payments for meetups.
4. Verified sellers.
5. Fraud API's - https://siftscience.com/ & https://www.signifyd.com/
If they do get passed all of the systems, there is still large chance they screwed up somewhere and it will be pretty obvious to us what happened. That said - its an uphill battle.
Good to see that you're trying to get out ahead of it. It's unfortunate because as a small startup, you'd rather put your time into building the business.
But, fraudsters are relentless and they come in waves. You beat them back, all goes silent, then they come back with a vengeance. It never stops and they are inventive. Much of the fraud comes from outside the U.S. as well (China-big time in our experience), so there's virtually zero chance of prosecution. So, these guys have nothing to lose and everything to gain. If they get busted, they just don't get their money. It's all upside for them.
BTW, I used to think that raising the bar so they'll go elsewhere would be sufficient. It definitely helps, but it's not how it works. If there is any opportunity, there will be parties who persistently work you to find it, such that it will be a constant fight for you.
In any event, you are right that you will most likely be able to detect them at some point. It's just the cost/time involved and the damage to your brand/customers as they keep changing tactics. One thing you should assume is that whatever you put in place, they will defeat at some point. It is guaranteed.
Finally, services like siftscience also help, but they tend to just raise the signal and/or help you to corroborate suspicions. It can still take quite a bit of effort and invariably human interaction to interpret those signals.
Not that it can't be done. Just encouraging you to brace yourself for the fight ahead. While you may be starting out to build a marketplace, you will likely find that you spend more time in the fraud-detection business.
But why does someone have to sign-in to buy? That is a major turn-off. I can't use something that people need to register an account for to buy. Just take a CC and shipping info and pass it to me.
Seems to be a fraud deterrent. I once had an eBay listing that was "purchased" by a Nigerian scammer. Buyers need to have a reputation system as well in a viable eBay replacement.
Yup - I think from a technical aspect we could totally have a user purchase before creating an account / signing in, however this limits us when it comes to dealing with fraud as well as brings up problems with the escrow system.
Since all payments enter escrow, without an account, the buyer can't release the payment to the seller.
No Bitcoins yet - but it's definitely something I'm personally interested in and when the time is right would consider implementing. Still a bunch of un-tested use cases IMHO.
Right now we're using Balanced (awesome product - http://balancedpayments.com) to process payments & escrow funds.
Do you know of any API's that are similar to Balanced but for Bitcoins?
Few ways currently, and more to come in the next few months. Basically:
1. Sharing your listing on social networks (good, not great for driving traffic).
2. Ability to list on multiple marketplaces, so you don't NEED to sell it through SellSimple - you can still list it on ebay, craigslist, etsy, etc. If it sells on one of those marketplaces, we'll auto-delete your item from SellSimple and all the other marketplaces. You're also not charged any SellSimple fee if it sells somewhere else.
3. Retention features on iOS - can't compare to eBays network, but downloads are growing quickly and users are buying items.
This is more a long-term strategy help to help us overcome chicken - egg. If we can exist long enough for that to happen through a free posting tool - we'll be able to (eventually) have enough traffic on our own listings to generate a high sell-through rate.
Your fees are 5%, eBay users will soon be charged 13% (including PayPal fee). So give your sellers the option to list on SellSimple for a price 5% less than eBay. For example, a $100 item on eBay would sell for $95 on your site.
Then in the ebay listing description add some key phrase like "Heyy Folks Be Quick" - the buyers will quickly learn that such a phrase means "get a 5% discount by making your purchase through SellSimple".
Your idea is against eBay's Link Policy[1] and eBay actively remove listings (and in some cases limit users ability to sell on eBay) as their Policy states if you link to non-eBay sites where other items are offered for sale.
Likewise, adding a phrase which may even suggest purchasing for less on another marketplace will probably lead to them editing or removing the listing from eBay as well.
If you are going to do that idea then, do it as a marketing campaign, not on eBay listings.
Cool, though I wouldn't use it because of the listing page. Your formatting is great for an image search if how the image looks was my only criteria I was looking for. But to find out the price, where it's shipping from, who's selling it, etc. I have to hover over each and every item, and that's rather daunting when it comes to hundreds of results.
I'd really want to be able to scan over hundreds of results in seconds. Not tediously hover over each and every result to see what it's worth. It takes too long.
looks like a good product, downloading now - always willing to try a sales competitor! quick typo in your App Store update description, though! separate. anyone have an easy mnemonic for that?
Limited to US only for now - our main limitation is on the payment processing / bank account side. Once our processor (balanced) is ready for international payments we should be able to jump in pretty quickly (they're working hard on it now - hopefully its ready soon!)
Why is this a good time? User acquisition in this space is expensive, and I don't think eBay raising their sell side fees makes a huge difference in bringing in consumer traffic. Sellers still have to list on eBay due to sheer volume. eBay may lose some sellers who no longer have a profitable margin, but I don't think you lose an equivalent amount of buyers in the process.
Well, that's sort of a rhetorical flourish, but I expect this to result in a fair degree of backlash. I trade synthesizers and high-ticket audio gear fairly regularly, and I feel comfortable calling myself an expert on that market. It's not a business for me, but I make my living working with pro audio so it does have a professional dimension. I think a lot about pricing strategies, and incline towards building listing and shipping fees into my price - I make a bit less, but my trades move quickly and a single all-inclusive price creates goodwill with buyers.
But there is no way that I'm going to just silently eat fees of 12-13% (including Paypal transaction charges), when I also pay shipping, insurance, and signature confirmation fees to minimize the risks of chargebacks on items costing hundreds or thousands of dollars. I have other markets I can sell in, of people who I've known for years on pro audio forums and a moderately active electronic music scene where I live. I liked selling on eBay because I could usually get a 10% premium or so over a local sale, but now that margin has disappeared. bulk dealers will just treat it as a cost of doing business, but traders in specialty markets like myself will just raise their prices or sell in informal markets. As a buyer I'm also much less inclined to subsidize ebay.
User acquisition of auction customers is indeed expensive, but I bet there are opportunities in peer to peer trust arrangements similar to escrow transactions.
"User acquisition of auction customers is indeed expensive, but I bet there are opportunities in peer to peer trust arrangements similar to escrow transactions."
I like where you are going with that. I can envision a marketplace that is built around consumer trust and seller expertise, I just don't think that eBay is that marketplace.
It isn't worth the legal costs of suing all those small fry.
eBay can leave them to bubble along making next to nothing (relatively), competing with each other for the few users who are looking for and managing to find an alternative, and hope they just die out. If one does end up looking like they might have a chance of growing to a size worth caring about, then the legal team will be called to action.
Worked very well for me in Australia and was mostly free (you only pay for 'premium' listings). You did have to sell locally and usually actually meet the people you were selling to, but it did seem to work.
Gumtree is a richer form of our Craigslist. I've had better experiences on Gumtree, because there's less volume and better sorting. Craigslist is a non-profit, though.
I'm surprised they haven't been disrupted already. The only real secret sauce they've got is a huge amount of traffic. How could you ever compete with a household name where success is determined by traffic and volume?
Once you have a leading position in this markets it's very hard to change it. The network effects and chicken-egg problem gives you huge competitive advantage.
In Poland we had ebay clone (allegro.pl) several years before ebay. Then ebay tried to enter the market several times, failed each time. There also were several other startups trying to conquer this space with much lower fees, but they also failed.
I'm not sure if it holds for all items, but for the collectibles I buy, most of the sellers are actually companies, which are better served by their own ecommerce platform, but use eBay due to the discoverability / traffic.
There are thousands upon thousands of small stores - I believe the alternative to eBay should be a vertical search engine that aggregates all those stores.
Maybe a homogeneus e-commerce platform (with some sort of discoverability for their items) + vertical search engines.
For the individual "garage sale" sellers, something like Craigslist or other classifieds, that just has a listing fee and doesn't handle payment & shipping.
There have been so many startups over the years that have tried to replace Ebay. They almost always failed.
Why?
1) Buyers need to trust the sellers and without the history and system already in place, it's not going to happen. You didn't need this system in place when Ebay started, because it was such a new idea.
2) Without the buyers, the sellers won't bother. I've been a seller for a couple of years and all of the smaller sites combined don't even compare to the number of sales I get on Ebay (Amazon is the other big marketplace).
I don't even waste my time on the other sites anymore.
The elephant in the room is this: ebay is all but impossible to use for big ticket items. I tried to sell a camera (>$1000) and after two months of agony and several failed auctions, I pulled out of ebay and immediately sold it on craigslist.
Why? Fraud. The first time, I didn't set the option to only sell to established users. I got bids from people with minutes-old accounts that I knew were fraudsters waiting for the end of the auction. Sure enough, they tried to pull a scam and I contacted ebay. After weeks they ended up locking that account. I relisted and the same buyer bid, even though I really cranked up the safety controls that an ebay customer support rep told me to use. The winning bidder? Account created 5 minutes before. I called ebay, said the email I got from the winner was a carbon copy of the first, fraudulent bidder's email.... it still took weeks while I waited for the auction to be voided. The total time I lost was well over a month.
On Craigslist, I definitely got a bunch of scammers, but they had no power over me. I just ignored their emails and waited for someone serious, which didn't take but a few days and we finished the deal at a local bank. We were both happy with the transaction.
Many years back I was trying to sell my ipod on ebay. I restricted to the US only because I didn't want to deal with overseas shipment. The winner goes on to tell me that he is on a short trip to the US and to ship to his hometown in Nigeria. Feeling a scam going on, I worked with ebay to get the auction voided to resubmit. By the time that was done, Apple released a new ipod and the value of my old one plummeted.
I have actually done OK with that up to now, and have defended them for it before - but I've been using eBay a long time, set fairly restrictive terms, and trade specialty rather than general consumer items, so I'm generally dealing with knowledgeable counterparties.
YES!!!! The new price changes are actually going to save me money. Plus they're still cheaper than AMAZON.
FYI: I sell on both Amazon and eBay. On ebay I pay for "Buy it Now" listings ($0.50 insertion) and 11% final value fee. So for me the cost is going to drop by 1% and .50 cents.
eBay is doing this to compete and catch up to Amazon. Auctions are a fad on their way out, and "buy it now" is where it's all at. Store style.
Amazon fees are MUCH worse than ebay + paypal fees combined, btw. Plus on Amazon you can't have calculated shipping so you have to buffer your shipping. I had to lie about my calendar weighing 4lbs just so I can force Amazon to calculate shipping more fairly. So sometimes you lose some money and sometimes you win. While on eBay calculated shipping charges buyers based on dimensions, weight, and destination so you charge your buyer the exact shipping cost down to the penny.
The problem with the OLD ebay rates is that they discouraged people from posting "Buy It Now" items. There's a barrier to entry. If you wanted to sell, lets say, 10 products on ebay with a "buy it now" price you had to pay 0.50/listing (not per item or sale) and they would be on there for a month /or/ until that item's quantity reached Zero and sold out. Now, you can put up to 50 items on ebay for free.
Ebay's old prices favored Auctions, ebay's new prices favor store style listings. It's now cheaper to start a store on ebay.
I just started selling on Amazon, but I break out in sweat thinking about how the hell I am going to handle returns. Amazon is known for their Costco style return policy. How do they expect a small time dealer like me cater to people's retail whims?
Also, my first time on Amazon, someone from a US military base in a foreign country ordered my product. Crap. I have never had to ship anything out of the US.
With eBay I can specify no returns + US shipping only. My experiment with Amazon is probably over. I like how fast things sell, but I think eBay makes more business sense for small timers.
I would love to know what has an 11% FVF, because I can't find it in their fee calculator. I agree that the new fees work out slightly better if you don't have a store and if you are selling items under $90. On the other hand, eBay lets you charge precise amounts on shipping but it takes the same commission that it does on the FVF. So if shipping an item costs $20 you'll end up paying $22 - $20 to the shipper and $2 to eBay.
I actually prefer Buy It Now to auctions, but I don't agree that they're a fad on their way out. Perhaps that's because I tend to trade high value rather than commodity items. I don't sell on Amazon and have no opinion about their fee structure; looking at at my own sales history it seems like eBay was about the same or very slightly more up to now, but Amazon will be significantly cheaper going forward, at least for anything over about $100.
While it does probably amount to an increase overall, there are certainly plenty of situations where the fees will be lower. And without doubt, they are now far simpler than before, which is important. Being able to quickly determine what it will cost to sell an item on eBay may well make casual sellers more likely to do so, even if they end up paying slightly more on average than with the complex rules.
It's OK if you have a store, but you are paying a monthly fee for the privilege and FVFs are close to what they are now. As an occasional seller who does maybe 5-10 moderately high value trades a year, it's a terrible deal - simplicity is not worth hundreds a year in additional fees, or an equally complicated 'store' that I have no wish to rent.
Agree with you there. Presumably eBay is looking for more volume of the smaller stuff, which would fit with the theme of strengthening competition with Amazon.
For the larger stuff, they don't have as strong a competitor (outside local options like craigslist), so they probably figure they can afford to boost their margins, and bundling it in with a 'simplification' and cuts elsewhere is a convenient time to do it.
Does eBay actually think they have any juice to compete with Amazon when Amazon offers warehousing and tons of other vendor services? Sounds more like the last gasps of AOL when they were trying to deliver pretend Internet.
Unless I'm mistaken, he only compares the fees for stores. And looking at http://pages.ebay.com/help/sell/fees.html#if_fixed, it seems that for individuals, the new fixed fee of 10% is always worse for anything electronic or $100 or more.
Actually the cost to sell on ebay will be closer to 14% since paypal is practically mandatory and they take 3.3%
I wonder what they are going to do when all the bigger ticket items start disappearing from listings, except for those with $250 a year stores of course.
As a casual eBay seller, I don't really care about the fees. I mostly want to get rid of stuff and make more money than I would if I threw it in the trash. 1%, 14%, 99%... it's all good.
Don't you know that this is a simplification of the fees for casual sellers, where before, there were multiple tranches for listing an item, and if it sold successfully, you also paid a final value fee.
The new fees represent a simpler and better to understand system, where the first 50 items per month for casual sellers are free to list, and easy to understand final value fee.
This is in fact a decline in % of what you would pay!
That's absolutely not true. It's simpler but the final value fee is quite a bit higher. Yesterday I listed an item for $1200, which would have a total fee of about $56. Four weeks from now that would rise to $123. I assure you that I checked my facts and figures carefully before choosing to post here.
They obviously don't see much value in the casual seller.
Buyers have a better eBay experience when buying from an experienced seller, better descriptions, faster shipping and communication and less disputes.
eBay owns a lot of other auction site properties[1].
They probably want to differentiate their brands, have eBay focus on power sellers selling new products and have their other brands focus on the casual sellers selling used products.
I don't think there could be a slimier company then Ebay. I wish Taobao would come to the US and crush Ebay like a Zhong Nan Hai cigarette butt.
"Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose — but if we fight in the river, we win." --Jack Ma.
Seriously, classifieds and auctions of niche items is precisely where I'm headed and the more that eBay taint their product in the eyes of sellers and buyers, the better.
Wait, what? The title is completely misleading. It's not an absulute increase from 9% to 10%. The fee earlier for all the sellers was 9%, now for ebay store owners (which mind you is a lot) get rates like 4%, 6% etc based on what items they are selling.
So, ebay is actually giving great price to sellers who sell at scale (now they can open an ebay store, which is definitely a good deal!). They are just trying to promote the adoption of eBay Stores which helps their business and sellers! What's wrong with that?
When Mr. SellSimple reaches the scale at which eBay does their business, we will see how "good" they play and we start critizing them when they actually try to make money (4% cut won't help you in scaling the business).
For casual sellers (the guy who sells his iphone once in 2yrs): They will need to pay 1% extra, which is frankly not much. I sold my iphone4 after 2yrs for $240 + $6 shipping on eBay. I don't mind paying 1% extra.
This is not true. It was pretty much the same as the store owner structure with a range of fees for different categories. Don't you think that I checked my facts before posting?
You can verify this for yourself using the link below; for example, on a musical instrument selling for $1000 you save $0.50 in insertion fees but your final value goes from $63 to $100. For cameras and consumer electronics, including phones, the increase is greater, from $51.50 to $100. I trade several pieces of quality pro audio gear a year; these changes would cost me hundreds $ in either final value fees or monthly store fees.
OK, but keep scrolling on that page and you'll see it's a lot more complex, with different fee schedules for different item categories in the table immediately following if you want to offer a Buy It Now option.
eBay used to be the place where you could put all your old junk and get some nice cash for it but lately it seems to be entirely focused on resellers (stores) rather than people selling junk from their basement.
Now it's all $1.00 items with $16.00 shipping fees.
I've been using Craigslist to buy/sell. I would prefer a place that was targeted specifically at casual sellers.
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Sure ebay has always charged huge fees for absolutely nothing other than having a recognised domain name. Their software is terrible they've just been around forever. They don't actually do anything, their terrible software keeps churning out money for them because they were in the space first.
This entity encompasses Paypal too, another very terrible service that simply won't ever go away.
Allow my distain for other people to show through. People will continue to use ebay and paypal, as they have been for far far too long regardless of any fee increase. It is the same reason people still use Facebook. Because the synapses in their brain get configured one time, set and forget. Use facebook forever.
Use ebay forever, use paypal non stop. Buy EA products. Keep paying your cable tv bills. Oppose change when it is ever actually finally suggested and put fourth by congress.
Actually, for some people, spending time looking around for a new service, deciding which service to use, learning to use that new service, configuring it for whatever you need, etc, is a LOT of work.
If your whole business is pointing to eBay, or all your friends and photos are currently on Facebook, you've got to tell everyone that you've just changed URL.
There's a lot of cost in changing. Sometimes the cost of staying with a service outweighs the cost of changing. You shouldn't assume otherwise.
My Nan has never changed her gas or electric provider in the UK ever since energy utilities were privatised 20 years ago. Sure, she's probably wasted thousands of pounds and she knows that, but she's happy. Meanwhile, we've changed provider about 10 times - and I honestly can't say that the savings have brought extra happiness.
Yeah, or, people use eBay and Facebook because that is what everyone else uses and those sorts of websites are useless unless there are lots of other people using them.
I was successfully deterred off eBay when I tried to sell a hot item (recently released top range smartphone), other people selling same items just register bogus accounts and sabotage your auction. Getting insertion fees back is not always guaranteed, I spent almost £40 on them. Fuck eBay.
I couldn't give negative feedback to a nonpayer fake buyer because I sold the item 2nd chance. That will be my last trip ever to eBay to sell anything.
I've found selling on Amazon to be a good alternative for most mainstream, easily shippable items. You don't have to fool with writing your catchy description and worry about auction timing, reserve prices, etc. And I'd guess the fees are lower?
Do you guys agree? Are there other good alternatives?
I don't think people are willing to trade bitcoin for anything other than currencies right now, since the value of it is so unstable. By the time the item you bought arrives you may realise that you hugely over or underpaid for it. I just don't think people would go for it yet.
Also, no chargebacks on bitcoin. So, there is going to be a huge amount of scams. You need to at the very least set up an intermediary between all parties. This will effectively double shipping cost and delivery time on all sales.
eBay has been moving away from individual sellers and trying to court larger scale "shops" for several years now. It's pretty terrible for anyone who isn't doing it fulltime.
While considering a price adjustment on a high-value item I'm selling, I went to their fee calculator to explore some other price points. I was mystified to see not only the fee I expected of ~$55, but a 'New Fee' of $123. Thinking I'd made a mistake, I explored further, and noticed that as of April 16, casual sellers who don't have an eBay 'store' will be charged 10% of their final sale value in fees. Store owners will keep the existing fee schedule, but it will cost them a monthly fee beginning at $16/mo. Add in the 3% Paypal fee and they're taking a very large cut. For many categories of goods, this represents a doubling of current fees.
I only discovered this by accident; I listed the item yesterday and there wasn't any warning about an impending fee increase. They haven't sent any notifications by email or to my eBay mailbox either; seems this is being rolled out quietly.
Now I'm lowering my price in search of a quicker sale rather than risk paying an extra $70.
EDIT: I've just realized that this fee increase begins right after Tax Day in the US - when many people list and purchase items because it's time to pay taxes or receive a tax refund. I've always defended moderate eBay fees because they provide relatively smooth access to a big marketplace, but not any more - this is pretty sleazy.