Be Prepared for Another eBay Store Fee Increase!

According to Scot Wingo of ChannelAdvisor, eBay is preparing to raise store fees once again. You can see Scot's take here at his blog eBay Strategies. The increase, that Scot predicts, seems very high to me but is possible when you consider that last years Stores Fee increase didn't move enough listings off of eBay and as Scot says "stores continue to grow much faster than core. eBay hit the brakes, [ Last July] they slowed down and now they are climbing again. ".

So, what is a store seller to do? My suggestion is to plan your exit strategy now. I don't suggest moving everything until the fee increase becomes a reality but you need to be prepared. Find a webstore that fit's your needs and sign up for Google AdWords using PPA (Pay Per Action) Keep your high volume items on eBay and move the rest to the webstore. With PPA you only pay when there is a sale and you can set the terms.

This strategy will be beneficial regardless if eBay raises store fees or not.

Changing Landscape for Online Marketplaces!

I just got back from the ChannelAdvisor Catalyst conference in North Carolina and thought I would recap some of the key takeaways. Ina Steiner of Auctionbytes.com was there and has written a nice recap of the conference. So if you want a quick snapshot of what happened please read her article.

My key takeaway from the conference was that the top online marketplaces are changing markedly:

Amazon is renewing their focus on 3P (Third Party) sellers with their invitation only offering called Seller Central. Currently 3P sales represent 25% of Amazon’s business and this number will continue to grow. By making this invitation only, Amazon can bring in the best and brightest sellers without flooding the market with too much inventory and too much competition. If you are a large online seller you should be considering how you could take part in this offering from Amazon. If you are interested in the program please email me and I can introduce you to someone at Amazon.

Overstock.com is undergoing some significant changes in their marketplace. According to CEO Patrick Byrne 3P sellers now make up 68% of their core business (not auctions) and with the recently announced agreement with ChannelAdvisor that percentage will increase substantially. With the agreement between CA and Overstock sellers can now include their product in the main Overstock site -- not auctions. One of the first eBay sellers to take part in this new program is Designer Athletic. If you are a large online seller you might contact ChannelAdvisor to discuss being part of the Overstock program.

EBay – eBay has just announced that Half.com sellers can now opt into eBay Express as an additional sales channel. While most media sellers think eBay Express is not worth their time as a marketplace, I’m not sure why they wouldn’t look into this for incremental sales growth. The opt-in process is pretty seemless and the fee structure is better for them on Express if they are high volume sellers. My Take: I think this is a precursor to moving the entire Media category off of eBay and onto Half.com -- remember you heard it here first. Here are the details on the program.

Google is now testing a PPA model for Ad Words that may have a huge impact on online sellers. In this limited Beta test sellers can set a specific fee per action. Here are the details from Google. This new wrinkle may be what kills the Golden Goose (eBay). PPA is a godsend for those sellers who have avoided using Google’s AdWords up till now.

According to Jeetil Patel of Deutsche Bank in a research note on the Channel Advisor Conference “Having attended the ChannelAdvisor Catalyst e-commerce conference, we believe that third-party sellers currently on eBay are increasingly diversifying their channels to incorporate direct (incl. paid search and comparison shopping) and most importantly Amazon.com. Seller feedback towards Amazon.com was particularly positive while eBay feedback was more bearish.” He goes on to say “…the same sellers have been aggressively shifting a portion of their inventories to Amazon with strong success (especially in the media categories). Sellers indicated that higher pricing; lower commission and higher collections (relative to eBay) represented key advantages for Amazon. However, it is important to note that sellers still enjoy profitability on eBay, yet would like to grow these profits (either by way of eBay, Amazon or direct).”

It is clear that eBay’s large sellers are increasingly looking for alternatives to eBay and that the exodus has begun. If a product sells profitably on eBay it will stay on eBay but sellers will move the Long Tail over to other marketplaces like Amazon or their own website. eBay’s catch phrase “Whatever IT is you can find it on eBay” may need to be revised to “Whatever IT is you can find it on eBay, except the Long Tail.” Of course eBay will be able to direct you to the Long Tail -- on other sites -- through their paid search links via Yahoo and Google.

Another Cheap Listing Day for Auctions on eBay!

Tomorrow (March 14th) eBay is once again running a discounted listing day for auction items only. I sold on the site for 5 years and I honestly have never seen so many discounted days. Could it be that the vast majority of sellers only list in core on these cheap listing days? This is just a hunch and I could be completely wrong but I would expect another discounted listing day on or around the 28th of March. See my earlier post on SIS.

Ask Bill Cobb a Question!

I am hoping to get 10 minutes with Bill Cobb at a conference next week in North Carolina. If you had the opportunity, what one question would you ask him? I will gather all of the questions together and ask as many as I can and report back. Please keep the questions civil. Thanks!

You if you have a Squidoo Lens you can ask your question on my Lens. (A Lens is similar to a MySpace profile).

eBay Promoting Stores and New Sellers Again!

I was driving to get my coffee this morning when I heard my first eBay radio commercial ever. It was a 30 second spot encouraging people to find something around the house to sell on eBay and giving them their first 3 listings for free. This seemed odd to me because most eBay advertising in traditional media is geared to the buyer. This is the first time I’ve ever heard a radio ad for eBay let alone one promoting selling on eBay.

My first questions were: Is eBay, having trouble getting new sellers to replace those that are leaving? Could it be that the metrics are finally showing a leveling off in seller growth? If so, are existing sellers in line for some incentives to stay? I couldn’t help that last question; it is my nature to be optimistic.

Then I got home to do my morning surfing and saw this, on the eBay Announcement board: Grow Your Sales with eBay Stores – 30-Day Free Trial Offer. Wow, eBay is (I know it should be “eBay are” but it just doesn’t sound right and its my blog) once again promoting stores. After last years store fee increase I had the impression they didn’t want any more clutter. What will more stores do to reduce the clutter?

I think these two events are telling (here goes the conspiracy theory). eBay traditionally doesn’t promote anything unless it is new to the site or their metrics show the numbers are going in the wrong direction. It’s been my experience that they make changes very quickly if the metrics are not going their way so I have to come to the following conclusion: Sellers are leaving and not enough newbies are joining to make up for it! Is there any other explanation?

March will be an interesting month because SIS skewed eBay’s 2006 numbers and it is apparent they are having problems retaining sellers right now. PayPal is being very aggressive with new promotions and now eBay Stores are once again being promoted. I wonder how balanced the site is now. Stay Tuned, this could get interesting.

Squidoo is what eBay's My World Should Be.

I've been playing around with Squidoo.com for a couple of days now and have come to one conclusion. This is what eBay's My World Profile should be.

In an perfect world, if eBay weren't so determined to control the universe, the My World profile would allow sellers to generate incremental income from the content they create while expanding their ability to connect with their customers and maximize their marketing efforts. Imagine if you had a Squidoo Lens with eBays traffic. Of course we don't live in a perfect world so sellers that are creative end up going off of eBay to find tools like Squidoo.com to help them connect with their customers and network with other sellers and heaven forbid, generate incremental income.

The money you make at Squidoo.com may be small initially but if you use it as a tool for finding new customers connecting with existing customers and networking with other sellers your business will be better for it. Check out my Seller Evangelist Lens on Squidoo (I know the name sounds a little weird but it grows on you).

Just my 5 Cents!

eBay Store Sellers! How Would you Like This?

I normally use The Digital Napkin to discuss new ideas but since this idea directly affects eBay Store Sellers I thought I would bring it up here. Okay here goes:

Since eBay wants to increase listings in CORE and disadvantage Stores in search, how about if they provide store sellers with a new referral credit? The credit would be 50% off of the sellers store FVF on purchases that began with a link from a CORE listing , Store Bookmark, Watched Item or Return Customer -- The Watched Item credit may be a little too much to ask.

A great many store purchases start with a CORE listing that the customer thought was interesting but before purchasing they decided to look in the Sellers store for something else. This credit would serve two purposes. It would reward Store Sellers for listing in CORE and possibly increase the number of CORE only sellers that would open stores.

Blogs are a great way to get feedback for this type of idea so please add your comments regarding the CORE referral credit.

Additional comments: The idea is not an all-or-nothing concept. For instance if you think sellers should get a FVF credit for purchases made by return customers let me know.