Yesterday, on CTS, this question was asked from Andrew Sloss, eBay.ca country manager:
Last night, eBay.ca announced a ten day promotion for sellers offering domestic "free shipping".
This promotion duplicates the 15% off FVF offered by eBay.com, also announced last night.
Luckily for me, I offer items where shipping is usually not a large factor. I already offer "free shipping" for all combined purchases exceeding $25 (and yes, I understand I pay eBay higher FVF for the privilege of offering free shipping to my customers).
We all understand "free shipping" really means offering the convenience to buyers of an "all inclusive" price; in other words, the cost of packing, handling and shipping is included in the price for the convenience of the buyer.
However, one does not need a doctorate from MIT to realize this kind of promotion benefits eBay at the expense of sellers.
By adding the cost of packing, handling and shipping in the price of the item, the buyer pays higher FVF and the 15% FVF discount will NOT (on average) reimburse sellers for the extra fees. Furthermore, including shipping charge in the selling price will also mean higher listing fees at times. Considering eBay's overall (and declining) "sell through" rate of about 40% it leaves sellers paying eBay more fees for a majority of items that do not sell.
Sweet deal for eBay but deceptive for sellers (and I use the word "deceptive" knowingly).
It gets worse.
It is bad enough for eBay.com to offer such promotion in the USA where shipping cost are substantially lower than in Canada, I simply cannot understand why you, the Canada country manager, allowed such offer to be duplicated for Canadian sellers on the same terms.
It does not make sense. It is unfair.
My question to you this morning is: why did you?
His answer:
"Timely question, pierrelebel. Marketplace data leads us to believe buyers are motivated by and respond to shipping deals even where the total item cost is no lower. The purpose of the promotion is to encourage sellers to try this approach if the economics make sense for them.
For some sellers, this price promotion may be valuable to them and their business requirements. For others, it doesn’t make sense. Plus, there are a number of potential benefits to trying free shipping, beyond the FVF discount. These include:
- Listings with free shipping may get additional exposure in Best Match
- Listings with free shipping typically earn higher DSR scores
- Improvements in a seller’s DSR score may lead to additional exposure in Best Match, and further FVF discounts if they are eligible.
eBay Canada is offering Canadian users the same opportunity to take advantage of this promotion as US users. Whether you take advantage of it is entirely up to you. "
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