Ebay Promotions actually cost you more

[anguscoinshop]

With of all the promotions going on in the last 7-8 months or so and only receiving one of them I decided to open another user id to have a better chance of getting those promotions. It turns out that is a big mistake. I made the first sale of $9.95, the buyer paid and I got an e-mail saying I had to ship while the payment would be on hold for the following reason

“The funds are held on your account for 21 days due to an eBay hold. This hold means that you are to ship your items out and 21 days after it is shipped, your funds will be released. PayPal can release these funds before the 21 days if the item has been delivered for 3 days. I apologize for any inconvenience this causes.”

 I started an e-mail conversation with eBay/PayPal until they finally spilled the beans with the following paragraph;

“One of our biggest goals is to preserve buyer confidence in our market, and to keep them retained within eBay/PayPal.  These holds motivate buyers to make purchases from those other than 'Top-Rated" sellers.” X-(

I decided to do a simple cost analysis with there fee calculator using $10.00 as a final price and free shipping, results as follow;

Auction style

‘A’ No store, not rated: fee $0.90

'B' With basic store, not rated: fee $0.85

'C' No store, Top Rated: fee $0.72

'D' With basic store, Top Rated: fee $0.70

Buy It Now

‘A’ No store, not rated: fee $1.60

'B' With basic store, not rated: fee $1.30

'C' With basic store, Top Rated: fee $1.08

I also used $100 and results were the same for cost progression. Cost is more at the top progressively getting less towards the bottom.

The bottom line is simple using the promotions are the most expensive way to sell on e-bay. My new user id is going bye bye.

To often things looks better then they really are. You have been loosing money when using those promotions.

If you have an established account with any combination other than ‘A’ you will be further ahead.

Calculate your fees before using any promotions.

[pjcdn2005]

My results are slightly different. I don't think that the majority of auctions start below $1 anymore so assuming that the store sellers are not receiving the promotion, they would be paying a listing fee of .25 for an auction starting anywhere from $1- $9.99 (.50 for an auction starting at $10-$24.99)

Totals for an Auction starting and selling at $9.99

‘A’ No store, not rated: fvf .90 + 0 listing fee with promotion  Total .90

'B' With basic store, not rated: fvf $0.75 + .25 listing fee  Total $1

'C' No store, Top Rated: fee $0.72 + 0 listing fee Total $.72

'D' With basic store, Top Rated: fee $0.60 + .25 listing fee  Total .85

Totals for an Auction starting and selling at $100

A’ No store, not rated: fvf  $9 + 0 listing fee with promotion  Total $9

'B' With basic store, not rated: fvf  $5.75 + $1 listing fee  Total $6.75

'C' No store, Top Rated: fee $7.20 + 0 listing fee Total $7.20

'D' With basic store, Top Rated: fee $4.60 + $1 listing fee  Total $5.60

So it does look like using the promotion for a $100 item could end up costing you more in fees IF each item sold but the opposite is true for some lower priced items.

Not everything is going to sell and that could make a difference too. In example A at the top, if you listed 100 items @ $9.99 and 50 sold, total fees would be $45. In example B you would be paying $37.50 fvf and $25 listing fees. Total $62.50

I hope that my figures are right..if not, please let me know. 🙂

[pjcdn2005]

You also have to look at whether you would have listed those items at all if there was not a listing promotion......no list....no sell...no profit.

Also, some say that auctions can give you more visibility..so if you are listing more auctions, your fp listings may receive more visibility too .

Obviously there are a few factors to take into account and each seller will find different pros and cons.

[dutchman48]

You also have to take into account the store fess as well as the listing fees in the store.

[anguscoinshop]

I start all my auctions at $0.99, the calculator wont take that amount so it should be an extra $0.10 non promotion, regardless after doing more calculations it is still more cost effective without promotion as a top rated and or with store in any combinations you try than with promotion with my new user id no store not rated.

Please read the paragraph i received from ebay paypal;

“One of our biggest goals is to preserve buyer confidence in our market, and to keep them retained within eBay/PayPal.  These holds motivate buyers to make purchases from those other than 'Top-Rated" sellers.”

E-bay know they will get a bigger bang for there buck by targeting small sellers, new sellers without store, top ratings or DSR.

[pjcdn2005]

You also have to take into account the store fess as well as the listing fees in the store.

I suppose if you want to get super technical you could include those. But the store fee would already be there and is the same regardless if there is a promotion or not.I think that the question is whether or not it is worthwhile starting a second id without a store so that the sellers can use the promotions.

[pjcdn2005]

angus, since you start your auctions at .99, using the promotions may not be in your favour but they do benefit some sellers so your comment in your first post - "You have been loosing money when using those promotions." isn't true for everyone.

Ebay knows that the more listings there are, the more final value fees they will have in the end. They are targeting people who don't sell regularly or only sell when there is a promotion. I think that it has more to do with having more listings than making a few cents more off of each listing.

You are right though, that people should sit down and figure out whether or not having a second id to use the promotions will benefit them. As mentioned earlier, there are different factors to take into account when doing that.

[recped]

angus, since you start your auctions at .99, using the promotions may not be in your favour but they do benefit some sellers so your comment in your first post - "You have been loosing money when using those promotions." isn't true for everyone.

Totally agree! I also started an alternate non-store id to get in on the listing promo's. The net result is that I'm paying a slightly higher FVF while at the same time I'm saving a ton on listing fees.

My fees as a percentage of gross sales has been cut by more than 50% over the past 6 months.

I also had to go through the 21 day hold period which lasted about 6 weeks until I made it past the pretty modest requirements.

In my case these listings promo's haven't cost eBay anything, quite the opposite, the lack of listing fees has allowed me to list more and sell more. While my fees as a percentage have dropped ,my total fees paid to eBay have gone up because of higher sales volume.

It's a win/win for me and eBay and even my buyers since they have been able to find things that I would not normally have listed.

Open new id, 21 day hold removed after 6 weeks, powerseller status after 2 months, TRS status and discounts after 3 months. I'm still calling every month to get my listing limits increased even though they are now at a level I would rarely reach.

[anguscoinshop]

Not me.

I'll keep on operating with the original id with auction that make buyers look into my store and buy.

Unfortunately a lot of people get caught in those promo trap.

Everything sell eventually, you just got to make sure you go about the right way to profit from the sale.

Bottom line is simple; less fees i pay, more profit for my business.