Friday, August 22, 2008

My take on the new eBay

A couple of days back, eBay announced some forthcoming changes to its policies. I would have talked about this two days ago, but I didn't have the appropriate time to make this post until this morning.

In a nutshell, eBay is changing the way you can pay and fees for the most part, but there are also a couple of smaller changes that will affect a small number of sellers.

Currently on eBay, sellers have three basic ways of accepting payment: PayPal, money order and check. I know there are other, less used ways as well, but those are the major three you will run into today. Before I give you the excerpt from the official eBay press release, please note that eBay owns PayPal.

Starting this fall, we're moving to an electronic checkout process that's faster and more reliable for sellers and buyers. As part of this move, checks and money orders will no longer be accepted on eBay, although buyers can still use these payment methods for item pick-up, at the seller's discretion. In addition, the electronic payment methods will be fully integrated into eBay checkout. For example, if a seller has an internet merchant account, a buyer will be able to directly enter a credit card and never have to leave the site.

While they talk big about being able to used credit card checkout, what they really are doing is getting more people to sign up for a PayPal account to use on the site, earning them the nickname Greedbay by a member on The Bench Trading.

Greedbay is about right as they are now utilizing their own secondary service to double their revenue from sellers, creating a very big conflict in interests (much like the one many people pin to Beckett). Had eBay not owned PayPal or another similar service, would this change have happened? I'm guessing not.

While I do have a problem with eBay trying to increase revenues in this manner, I am more upset that money orders can't be used anymore. I don't do much selling on eBay, but most of the card buying I do through PayPal which is all money that comes from selling cards elsewhere. However, when I buy something non-card related, usually a series of TV shows on DVD, I prefer to use money orders so I don't burn through my card money that fast. Outside of shows or the occasional blaster box, I don't spend money out of pocket on cards.

By using PayPal, sellers lots of times will implement an extra fee to the shipping and handling charges to cover the PayPal fees, thus making the next part of their resolution a little fuzzy.

Shipping is an important factor for buyers as they shop online – and expectations are higher than ever. Today, buyers want free or reasonable shipping. So, if you're already offering free shipping on items, we're going to reward you even more. Beginning on October 1, 2008 and running through the end of the year, all sellers will receive the option to use subtitle for free, worth $.50 per listing, when free shipping is offered. And for eligible PowerSellers, you will receive double your PowerSeller Final Value Fee discount on these items, starting on the same date and running through the end of the year when you offer free shipping - this is up to a 40% discount!

They also are including limits on items that can be shipped via media mail.

Sure, it's nice to give sellers who offer free shipping a discount, but it's no big secret that a lot of times with free shipping comes higher listing prices. eBay knows and loves this because it allows them to reap higher listing fees, despite giving the subtitle line for free. If the discount becomes the norm after the special offer, eBay has found another sneaky way to get more money from seller.

I've heard many people saying that the shipping limits are going to help eliminate the sellers who charge $3 or more for shipping on auctions for one card. However, cards aren't shipped through media mail and will probably remain the same.

Some other highlights of the new policy include:

Accordingly, we are shifting the majority of our costs for most categories to the back end (final value fees), which you only pay if you're successful in selling an item.

This is the funniest line in the whole message if you ask me. Yes, you only pay FVFs if you sell your item, but they don't mention that you still have to pay the listing fee whether you sell your item or not.

Finally, we're instituting a new minimum Detailed Seller Rating (DSR) requirement, as a way to further improve the customer experience for everyone on eBay. As of November 1, 2008, sellers will need at least a 4.3 across all four DSR categories, over the prior 30 day or 12 month period depending on volume, in order to list on the site.

I find this to be a bit unfair to sports card seller, especially given the type of rating system they have combined with the ignorance of many collectors. Many sellers find their shipping charges rating to be very low because most collectors will give one star for a $3 shipping charge. I don't feel that is appropriate considering there are people that get $4 and $5 for one card, which is far greater robbery that $3. I also am not saying $3 should get five stars, but I feel it should be given three or four stars depending on how the seller shipped the item.

So being almost exclusively an eBay buyer making purchases through PayPal 95% of the time, I don't really have any gripe with the new policy except for feeling bad for those who it does effect. The only really bad effect this may have on me is that my Omar Jacobs collection may continue to suffer. Anymore, there averages just 25-30 listings for him at any given time. With all these increased costs, people are bound to be only selling the big name stars making my collection even harder to build.

I have no doubt that eBay will still be the biggest marketplace for sports cards, but I can see prices increasing and listings decreasing because of these new standards.

1 comment:

James said...

What a rip off. So we have to pay fees to list the item, pay fees on the final value of the item, and pay fees to accept the money that bought the item.

That's pretty bad. I plan on going to card shows to work on my collections and checking out the new SportsBuy/Naxcom.