Bill Cobb's New Store Inventory Fee Increases

[systemagic]

The porcine Bill Cobb explains his new gluttony:

http://www2.ebay.com/aw/core/200607.shtml#2006-07-19134256

As of August 22, 2006

Starting Price New Insertion Fee Current Fee

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

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%

With the last enormous fee gouges in January 2005 I was forced to retreat into my store. Now I'll have to look at closing it altogether. Clearly I should have quit then.

Marty

[cartoonsinabox]

I guess this is the end of the journey with Ebay. I am thinking of closing ebay store and sell only on my website.

[skylarstuff]

Ebay had another record sales quarter, with over 500,000 Ebay stores accross the world. The only way the message is going to be heard is if all Ebay store owners were to close their store. Emails are not going to do anything.

[esellerauction]

X-( My store will close on August 21, Sales have been soft,
so long ebay!! Hello VirtualMart.
I still may sell a few auction Items buy will only do that to drive buyers to my own store.
Bill you disgust me saying ebay is surely moving in the right direction, you suck.
I'm confident the actions we're taking are the right thing to do for the overall eBay Community.

You will certainly drive stores shut,
You are a greedy man. leading a greedy company, how about dropping fees instead of take take take, this is it for me. I hope google squashing you like a bug
Regards
disgruntled X-(

[jasonsportscards]

thinking of doing the same, sales are slow to be expected though with what i sell. one quick question if u list your item for 3 months in store now, instead of renew every month, will that price stay at 2 cents or will they have the increase in it?
thanks
jason

[jakeeangel]

You haven't been able to list items longer than 30 days since early this year. Since around January or so. It's 30 days or GTC. Period. If you list on August 20th you pay 3 cents. Who lists in a store without gallery???? When it renews in a month you pay either 6 or 11 depending on the value of the item.

---

[youreinthebook]

They made sure to close that little loophole, didn't they? 😉

[whoscloset]

Ebay has a major problem on it's hands. They definitely have an issue with sellers who are opening stores and dumping 1000's of unsellable items into them for 2 cents a month. The cost of hosting these listings for ebay is too much and they don't want to carry them. How they jump from that to increasing back-end fees I will never know. Like I told my ebay rep....charge me 25 cents an item per month but reduce my FVF's and give me some exposure.

They honestly think they can force sellers back to the auction format, but you can't put the Genie back in the bottle. They fail to realize that stores were not the downfall of auctions. Increased front end fees and a lower number of bids per auction and were the downfall of auctions. The format just became too expensive for most sellers to use it as anything more than a venue for advertising. I actually write off my ebay expenses as an advertising cost.

In all honesty this is the most short-sighted decision I have seen a major firm make in a very long time. ebay has the name recognition, the expertise and the resources to become THE major on-line shopping mall. They are close to reaching the peak of their growth for the core auction format which is evidenced by the lower list/sales and bids/item ratios. Any substantial future growth will have to come from a different avenue. Enter stores. If they managed the store format properly it could be their largest future revenue generator.

Charge a higher front end fee to ensure that only items that have a potential to sell are listed...lower back end fees to somthing the sellers can live with and still make a decent profit...provide some exposure for the store inventory listings.

It's not rocket science, but you'd think it was given the actions ebay has taken in the past few years.

ebay no longer wants your store business. Maybe they will come to their senses at some point but it isn't likely to happen soon. It is time to develop your off-ebay site and promote it at every opportunity...

Flyers in your shipments...URL in every e-mail...keyword programs...message boards.
Monique

Himalayan Salt Lamps - A Guide to Purchasing

[youreinthebook]

Listings don't take up that much space. When you look at a listing, only the text and pictures submitted to eBay is the data that "takes up space", and because it's mostly text and small pictures it's not storage-hogging data like video is, for instance.

The cost of data storage is at an all time low. Hard drives are increasing in size and shrinking in price.

The whole "store inventory listings are costing us money" line coming from eBay is completely bogus and they have PROVED that by increasing Final Value Fees in addition to the listing fees. They've also PROVED that by showing a steady profit this last quarter.

If store inventory listings was truly the cause of eBay's woes, why didn't the last round of increases in the store's fees help? Remember the outrage over those? "So, the last round of fee hikes failed to help bring in more auctions, so we'll just charge even higher store fees. Yeah, that'll work."

How's this for an alternative scenario: eBay is not experiencing rapid growth like they have been in the past, and it's making their investors nervous and their stock price is going down so rapidly there's danger of a hostile takeover. Instead of looking internally at possible poor management (say, buying Skype and Kajiji was really brilliant, wasn't it?) eBay has decided to peg the problem on "not enough auctions". The stores inventory listings have become the scapegoat because it's a lot better to charge the higher fees to the majority of sellers on your site. Pegging all their woes on the success of stores is really short-sighted. Actually, I don't think they believe that. I think they know what the problems are, but have created this stores crisis as a smokescreen so they can raise the fees and generate more income for the short term.

eBay has been known historically as the place to get hard-to-find items and/or good bargains. How is raising fees and losing sellers after each round of the fee hikes make eBay better in either of these regards? If the bilking doesn't stop, eBay shoppers will leave for better pastures because the sellers of those hard-to-find items and the good bargains will be gone because eBay feeBayed them out of the site.

(Of course, this is all IMHO)

[jasonsportscards]

thanks that was something i didn't realize as i normally just put them in store and relist till they sell. have they quietly taken anything else away, if so maybe that could be their next strategy. just feel with them raising both initial fee and fvf going to hurt, guess i will have to raise my prices to cover the costs, even though i don't want to at this time, specially being summer and everything slow

[funkywatch_com]

Hey, if they don't want the store listings, why the hell did they create eBay Express???


In my mind the root of the problem for Auction-style listings is the Listing fee schedule. They reason I stopped listing auctions is because the fees are way too high when you list anything over $24.99.

I'm not ready to see my merchandise sell for lower than cost, right? And factoring in the Listing fee and Final Value Fee, it's not worth it. I get more for my money in the Store, that's all.

If they have reasonable listing fees, like 20 cents today, I will be listing more auctions. Until then I'll stick to the store, some promo items starting at 99 cents and listing auctions on Promo days.

[ricarmic]

Just a quick note on the cost of items, it is a lot more than the cost of disk space, one has to have the Oracle Databases, Disaster Recovery stuff, many servers, networks, (and remember everything needs to be redundant so when something goes down Ebay doesn't go down), piles of infrastructure software and people to manage it. That stuff costs a lot of money!

It doesn't surprise me that they're losing money at 3c a month (I agree who lists without pictures anymore!).

I too am disappointed that they're hitting us on both ends. I agree with the others that I would be a lot happier if the final value fees were larger and I sold more stuff more quickly.

I sold piles of extra stuff during the brief experiment when they included store items in searches, and I was very sad when they stopped that. In fact at the time it got stopped, I was figuring on no longer running auctions and just stuffing more stuff in the store! Boy things have changed in a few months!!

I see others, like me, treat the Ebay fees as part of the cost of selling. I've been selling via mailorder for almost 30 years and I really look at the listing/FV fees as "advertising" cost, which in the "old" days when I advertised in print was comparable to the current Ebay fees. In fact in my case, it is only in the last year or two that the Ebay fees have risen to the point that they're on par with what I experienced in print. Before that Ebay was a bargain.

I do also think that the auctions are losing their lustre. I traditionally have used them to draw people to my store. In my area at least, the auctions are weaker now than they were in the early 2000s.

Ebay does seem to have a relatively painful process of encouraging us to go the direction they think we should. When stores first came out and weren't doing as well as they liked, they dropped the prices to encourage more store stuff, now they're zipping us on them and trying to push us back to auctions, which as I mentioned for me at least are poorer than they were 5 years ago.

Someone once said that running a business is really a test of how well one can handle problems as much as anything else. I guess this is another test for us!

[youreinthebook]

It's been mentioned before by many sellers; one of the best way to use eBay now is to draw them in via auctions or store listings, but then direct them to your off-eBay e-commerce site as much as possible (while trying to stay within eBay's tight policies regarding that).

eBay's biggest selling point right now is the number of active buyers who search the site. This is why other auction sites just aren't there yet, they haven't been able to draw in and keep a steady set of "eyeballs". eBay right now is much better at marketing than Y! and the others.

[systemagic]

Just how long has this Bill Cobb guy been with eBay? I had a look at the stock chart yesterday and there has pretty much been a precipitous drop since the last fee increases in January 2005. Way to go, Bill! (Slow learner) The shareholders are going to love you. Nice Job!


Not only is he apparently mathematically impaired he has an enormous amount of data to draw on and apparently has a myopia that causes him to see the only new revenue possibilities as those that are directly adversarial to his sellers.


The free store-to-auction listing days were wildly successful for both eBay and sellers. Somehow this success was invisible to Bill. In my case the 6-8 percent sell-through rate in no way justifies my moving store inventory to full-priced auctions but it made me a power seller again and, in theory, if the free store-to-auction listings were offerred once-a-month for a year, then my store inventory would be sold out. Problem solved and significant revenues for everyone. Bill Cobb couldn't recognise a win-win situation if it bit him on his curly little tail.