Power Sellers Unite

LurkeyLou · Posted: Wed Jul 19, 2006 5:45 pm Post subject: eBay to Raise Fees for Stores

By John Shinal
Last Update: 4:25 PM ET Jul 19, 2006

SAN FRANCISCO (MarketWatch) -- EBay Inc. (EBAY : ebay inc com EBAY25.93, -0.66, -2.5% ) reported late Wednesday second-quarter profit fell 14%, hurt by the cost of employee stock options, while sales surged as expected on growth in its online payment unit. San Jose, Calif.-based eBay said net income for the three months ended in June fell to $250 million, or 17 cents a share, from $291.6 million, or 21 cents, a year ago, when the company didn't include option costs in its results. Excluding option expenses and other items, eBay said it earned 24 cents a share, matching the average estimate of analysts surveyed by Thomson First Call. Sales for the operator of the world's biggest online marketplace rose 30% to $1.41 billion, also in line with expectations, as revenue from eBay's PayPal payment business rose 39% to $339 million. The company also said it will buy back $2 billion worth of its own shares during the next two years and will raise fees for eBay users who list items for sale in their online stores.

reference: EBay profit down on option costs; sales rise 30% as expected

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They already charge $15.95 @ mo, 0.03 a listing ( 0.02 insertion + 0.01 gallery) + 8% FVF.

I'm going to post this at eBay, and then get back to work on my independent store.

LurkeyLou · Posted: Wed Jul 19, 2006 5:50 pm Post subject: Re: eBay to Raise Fees for Stores

HA! Someone at eBay beat me to it...Erin/2BoysandToys predicted a fee hike in August...that's when store costs are slated to rise: August 22, 2006

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EXCERPT

Ebay Meets Earnings Forecasts, Ups Fees
Wednesday July 19, 4:28 pm ET
By Michael Liedtke, AP Business Writer
Ebay Meets Earnings Expectations, Raises Fees for Some Stores

"...Beginning Aug. 22, eBay said it will raise a variety of fees for merchants operating online stores on the site. The change, affecting an area called "store inventory," could apply to up to 541,000 stores worldwide that sell on eBay. The new prices will raise fees by an average of 6 percent for affected merchants, eBay estimated.

The company isn't changing the listing fees for any other format, including the auctions that turned eBay into an e-commerce bellwether. EBay ended June with 203 million registered users, but the company doesn't break down how many of those are sellers.

By raising the costs to operate stores, eBay hopes to push more listings back into the auction format, CEO Meg Whitman said in a Wednesday interview. Store inventory listings represent about 83 percent of the volume on eBay's site but generate just 9 percent of the gross sales volume, according to the company...."

reference: http://biz.yahoo.com/ap/060719/earns_ebay.html?.v=1

2BOYSandTOYS · Joined: 14 Mar 2005 Posts: 10095 Location: Kansas

Well...I wish I could find that original discussion - we talked about more than the fee hikes - the entire thread, or majority was forward looking - based on our experience and thoughts 'at the time'...

Be interesting to see how much 'more' of that thread is reality now - know what I mean?

I do suspect that if stores are affected in August, the auction fees will most likely be increased sometime in the Q4 - they have to be to meet market projections. This year, with the trends, ebaY will NOT be able to pull a Q4 like before without a rate increase on the other side of the business.

Another possibility (but not likely - due to G-Buy) is to adjust upward PP fees. And yes - PP does bring in a huge chunk of ebaY's profits..

:D :D :D

I did just hear this at another place, and was going to share here - my buddy Lurkey beat me to it!!! :wink: :mrgreen: :psulove:

Dep-T-Dawg · Joined: 12 Feb 2005 Posts: 6273

Your correct LL>>In our email this PM>> :( (it just keeps on
doesn't it??) :roll:

Subject: A Message from Bill Cobb: Resetting the Balance of the eBay Marketplace

eBay sent this message to Lana, your registered name is included to show this message originated from eBay.
Learn more.

Dear Lana,
Since its debut in 1995, the eBay marketplace has continually evolved to meet the needs of the eBay Community. For the most part, the behavior 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 occasions, 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 has 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 center on eBay.com. They account for about 91% of the gross merchandise value sold on eBay.com. But recently, we've been wrestling with some troubling facts:

Store Inventory listings now comprise about 83% of active eBay.com listings on average.
While 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 costs for 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 that 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.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
Core listing fees will remain unchanged. So for the vast majority of eBay sellers who use only these formats, their fees are not increasing.

And we'll be providing greater exposure for core listings on eBay Express. In late August, we'll begin displaying auction-style listings with Buy It Now on eBay Express for qualifying sellers. Also in late August, core fixed price and auction-style Buy It Now listings that qualify for eBay Express will be advantaged over Store Inventory listings.

Also, in response to the requests of many large sellers, we're raising the 10-item multiple listings limit to 15, effective Aug. 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 Aug. 22, eBay.com Store Inventory format insertion fees will be tiered with an item's starting price.

These Store Inventory format insertion fees take effect Aug. 22, 2006:
Starting Price New Insertion Fee Current Fee
$0.01 -- 24.99 5¢ 2¢
$25.00 and higher 10¢ 2¢

Some Store Inventory format final value fees also will also increase, effective Aug. 22, 2006:
Selling Price New Final Value Fee Current Fee
$0.01 -- 25.00 10% 8%
$25.01 -- 100.00 7% 5%
$100.01 -- 1,000.00 5% (no change) 5%
$1,000.01 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.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 a month, we'll also 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.com will display Store Inventory listings along with core listings as described above.

Half.com Listings Added to eBay.com Search Results
I recognize that sellers in the Books, Movies, Music and Video Games categories will have unique challenges with the changes we're making. As many of our media sellers have requested, starting in late August we'll again provide visibility for Half.com listings in core search results, by bringing back the Half.com listings merchandising feature we used previously (click here for an example). We're also exploring additional ways to promote Half.com listings in search results on both eBay.com and eBay Express.

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 all 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.

I'll be hosting a Community Town Hall discussion on Thursday, July 20th at 4:00 p.m. Pacific time, where I'll answer your questions. Please click here for more details on the Town Hall, or to submit a question in advance.

Sincerely,

Bill Cobb
President
eBay North America

CompassRose · Joined: 29 Jan 2006 Posts: 79

Deeply stupid move by eBay. If stores aren't selling fast enough, you can't correct that with a fee increase. You have to raise traffic to stores! Any ecommerce person will tell you that - sales are all about the traffic. Idiots, they're cutting their own throats.

LurkeyLou · Posted: Wed Jul 19, 2006 8:52 pm Post subject: Re: eBay to Raise Fees for Stores

Here ya' go, Erin: http://www.powersellersunite.com/viewtopic.php?t=3606

The stores board @ eBay is lit up...and it's easy to see that *most* people are refraining from truely speaking their minds.

They're gonna' nail stores now. Once they force some sellers to the auctions, they'll jack those fees in Jan 2007. Sellers, and ultimately customers, are gonna' get it in both ends.

Yeah, DTD, it keeps on...and will be more of the same next year for those who remain. We gotta' educate our buyers.

ASLANstore · Joined: 20 Apr 2006 Posts: 704 Location: MidWest

Wow... well, Bill sure spelled it out in that letter didnt he... "stores, please go away"

I mean - isn't that the bottom line? That letter is quite different than the one I recieved (not a tore owner) - but both letters pretty uch leave you with the impression that stores are not considered valuable to Feebay BigWigs

Marty

CompassRose · Joined: 29 Jan 2006 Posts: 79

Over on the stores board, someone who owns stock reported on the quarterly investors phone call today. They said Meg was clearly blaming eBay's poor performance on the stores, and that she obviously didn't like them. I am not a stockowner, and I don't know what was said specifically, but I think their attitude is clear.

2BOYSandTOYS · Joined: 14 Mar 2005 Posts: 10095 Location: Kansas

I'm absolutely 'floored' that stores comprise 83% of the total listings - on average. If that's the case, what in the world are they 'doing'?

Yes - this 'move' intends to drive more 'auction-format' listings, but many of the higher-volume folks have their own websites, and have been doing exactly what most here have been doing - working hard to redirect traffic.

So - if 83% of the listings are in stores, that means 17% of listings are in auction format - I don't buy this set of figures at all....

What's going to be a huge 'kick in the behind' is the merge in search of half.com's listings - goodness - you can find books, etc. there for more than 1/2 of what some of the ebaY sellers are asking.

This is really going to 'light up more than the store boards' at the end of the day. I have to think hard about this to determine what follows. But - I'm still not convinced that fee 'adjustments' for 2006 are done. It's still early folks, and the key/primary selling season starts when all the kids go back to school and Labor Day is just here or just passed.

An interesting, interesting message from 'Bill' - should we all join him on Thursday - ???? NOT... :roll: :roll: :roll:

GeorgiaRose · Joined: 05 May 2006 Posts: 112 Location: Ringgold, GA

I can't tell you how pleased I am that I have spent the time to open other venues and found so many learned and genuinely nice people willing to help me learn. I have yet to finish my website down, but I've fanned out to Ecrater and Blujay and do have a geocites to direct traffic. Got a job i nterview in the morning, but I need to step up this learning curve of creating a functional self sustaining website. I feel so releived to know I'm out there and trying. Remember: "ARFEIAGO" = Any Road From Ebay is A Good One.

Good luck to all,
Rosemary

angelsolutions · Posted: Wed Jul 19, 2006 9:27 pm Post subject: Re: eBay to Raise Fees for Stores

Lurkey...that's exactly the thread I was headed for...especially post #7..LMAO!

I think before they force more stores back to the auctions, alot more stores will close. This is only helping me make my decision to close my store as I could never afford those rates.

CompassRose...you hit it right on the nailhead...eBay has the perfect cash cow in it's stores, and they want to run them off. I *certainly* picked up the tone that the stores are a "bother" to eBay. Well, I sure hate to be a bother to them....

sylvia

GeorgiaRose · Joined: 05 May 2006 Posts: 112 Location: Ringgold, GA

Jim Cramer was right! I'm so glad I don't own any of their stock. Do you think Bill Cobb even knows the percentage of buyers that are following people to these others sites or does he think we all fell off a watermelon truck?

Rosemary

flags1776 · Posted: Wed Jul 19, 2006 10:02 pm Post subject:

How does Express fit into this? If eBay was so disappointed in the profit on stores why start Express? Am I missing something here?

GeorgiaRose · Joined: 05 May 2006 Posts: 112 Location: Ringgold, GA

They are going to allow more venues into Express. You'll see auctions there soon. Wait and see.
Good luck
Rosemary

elgato · Joined: 24 Feb 2005 Posts: 17241 Location: Texas

Flags1776 ole buddy the ebay express is just another avenue for billions of $$ for ebay :evil:

From Billy-Bob Cobb himself from their boards: (Like above)

Since its debut in 1995, the eBay marketplace has continually evolved to meet the needs of the eBay Community. For the most part, the behavior 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 occasions, 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 has 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 center on eBay.com. They account for about 91% of the gross merchandise value sold on eBay.com. But recently, we've been wrestling with some troubling facts:

Store Inventory listings now comprise about 83% of active eBay.com listings on average.
While 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 costs for 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 that 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.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
Core listing fees will remain unchanged. So for the vast majority of eBay sellers who use only these formats, their fees are not increasing.

And we'll be providing greater exposure for core listings on eBay Express. In late August, we'll begin displaying auction-style listings with Buy It Now on eBay Express for qualifying sellers. Also in late August, core fixed price and auction-style Buy It Now listings that qualify for eBay Express will be advantaged over Store Inventory listings.

Also, in response to the requests of many large sellers, we're raising the 10-item multiple listings limit to 15, effective Aug. 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 Aug. 22, eBay.com Store Inventory format insertion fees will be tiered with an item's starting price.

These Store Inventory format insertion fees take effect Aug. 22, 2006:

Starting Price New Insertion Fee Current Fee

$0.01 – 24.99 5¢ 2¢
$25.00 – and higher
10¢ 2¢

Some Store Inventory format final value fees also will increase, effective Aug. 22, 2006:

Selling Price New Final Value Fee Current Fee

$0.01 – 25.00 10% 8%
$25.01 – 100.00
7% 5%
$100.01 – 1,000.00 5% (no change) 5%
$1,000.01 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.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 a month, we'll also 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.com will display Store Inventory listings along with core listings as described above.

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