eBay Caps Shipping Rates: What Is the CEO Thinking? 44 comments
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Does John Donahoe expect US media sellers to tie a book or DVD up with a piece of string, slap some postage on it, and hope for the best? I think he might or are the new shipping rates just another way for John to increase seller fees?
On August 20 eBay (EBAY) announced maximum shipping rates for US media sellers (books, DVDs & movies, music & video games) that go into effect in October. The new rates bear a remarkable resemblance to Amazon's (AMZN) but unfortunately most media sellers don't get a bulk discount for postage and will lose money.
The actual costs of postage (based on USPS rates) are as follows:
$2.23 -- base rate for media mail (less than 1 lb.)
$1.75 -- insurance ($0.01 to $50.00)
$0.70 -- delivery confirmation
This means that in about a month US media sellers will lose $1.68 for every CD or DVD they ship due to the new $3.00 cap on shipping. I know $1.68 doesn't seem like much but when you work the math US sellers will lose $168.00 per 100 CD/DVDs they sell plus the cost of listing fees, final value fees, and shipping supplies.
Book sellers will be especially hard hit because shipping rates will be capped at $4.00 per book regardless of actual weight. This includes textbooks which normally weigh a minimum of several pounds. What the hell is John thinking?
Ding them stars! I suspect it won't take long for seller's stars to get dinged and perhaps justifiably so because media mail is slow & priority mail is cost prohibitive. Once sellers accrue enough dings their selling discounts will disappear and eventually they may lose their ability to sell which seems to be what John has in mind - rid the site of small sellers.
But who cares about the stars? I bet sellers won't because John has created a no win situation. If sellers raise the cost per item then their items will probably appear on page 50 of search results and FVF (final value fees) will increase if buyers can find IT.
If they don't purchase delivery confirmation & insurance PayPal will issue chargebacks for SNAD (significantly not as described) immediately upon request. They're also issuing refunds for lost or broken items despite sellers have insurance.
What difference does it make? PayPal is already holding many sellers' funds hostage for up to 6 months because media is considered high risk and sellers are expected to either ship with money the don't have or face suspension.
I wonder how John is going to explain losing millions of listings when sellers start shipping their inventory directly to Amazon because eBay isn't worth the effort. Checks & money orders have been banned, Paypal holds have increased dramatically, and final value fees have skyrocketed.
Sell through rates have also dropped like a rock, nothing works, and best match is the worst search engine on the internet according to millions of buyers & sellers.
What am I thinking? This is just another way to raise fees!
Stock position: None.
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This article has 44 comments:
Like you said in the middle paragraph, 'What the hell is John thinking?'
He seems to be trying to drive all of his customers away, or at least, all of the sellers.
I do understand that he is trying to get rid of over-charging for shipping, that has been a problem on the site, but the categories are now so complex that he can't do that without making the changes so complicated, no one can understand.
Perhaps what is really needed is some new management, and make it someone without a background as a consultant.
We need a clear alternative!
Ebay is trying to become Amazon...but Amazon 1) takes care of the payment process themselves and gives the seller their cut [ie provides SERVICE to sellers] and 2) TOTAL fees are 15%. With Ebay/Paypal, my fees last year were 22% and with the changes this year should be about 27%. With the new S/H charge limits I will have to raise my start price on CDS to cover what I am losing on shipping [what about shipping supplies and required trips to the Post Office] AS WELL AS the 27% Ebay/Paypal fees. That will only increase Ebay's listing fees as my initial start price will be higher resulting in less sales.
Before these changes, my sell through was 33% of units listed. Now my sell through is 15% of units listed. My average sell price has declined 30%.
Can't stay in business too long this way.
I looked high & low but couldn't find anything in the August 20 announcement that referenced insurance costs so if my assumption was wrong that shipping caps included insurance please forgive me.
But even if sellers add the cost of insurance to the caps, sellers still loose money because the new rates were not based in reality.
eBay is just a venue! Donahoe has no business setting shipping caps because he doesn't make the decision of how any item is shipped - it's the seller's responsibility because they own the item - not Donahoe!
Their customer service is non-existent, fees having been increasing steadily in the last 12 years, and they keep screwing their sellers (who are the ones the pay all the eBay fees, not the buyers) with things like the removal of seller feedback and the buyer is always right in transaction disputes even if he has zero feedback and the seller has 1000+ feedback.
There is an interesting detailed description of where eBay is headed on the following website: www.ebayexodus.com/
Don't get me started on the stars thing. With Ebay, MEETING customer's expectations is failing, exceeding is passing. That's like A+ passing and A failing. The only thing that differentiates a 4 and 5 star is the word VERY in Ebay's derfinitions. Ships QUICKLY...get a 4. Ships VERY QUICKLY gets a five. But according to Ebay's rules now, a 4.3 on ANY rating will cause you to NOT be able to list items again for up to 30 days! And Ebay doesn't give PARAMETERS to buyers as to what "quickly" vs "very quickly" mean. I have had cases where I have received a "4" on shipping time yet I shipped within ONE HOUR of payment!
Ebay is having buyers shooting sellers in a barrel.
I guess it will be E-BYE! for good sellers.
Now, they only bother with saying 'it' once, and quite nonchalantly at that; once uttered, IT is to be believed or you can kiss their arse. Your choice. Really, who the heck is going to make them toe that line?
"ebay is just a venue" just an advertising venue... we don't get involved with the actual transaction...
1. This is how you will list your goods for sale
2. This is how many of your adverts we will display at any one time, no matter how many you have paid for
3. This is how sellers will be graded on their business practices, which will also influence whether or not your listings are displayed
4. This is how you will communicate to potential buyers; there will be NO email communication between parties
5. This is the maximum amount you can charge for shipping costs
6. This is how payments will be made between parties; United States of America legal tender is declared illegal on ebay
"ebay is just a venue"
BULLSHIT! The next time ebay uses that excuse in a court of law, they better say it quite long and loud.
I couldn't agree more - hourly wages for doing eBay related work are either equal to or less than slave wages!
This is just a suggestion but have you tried Fedex? If you set up a business account they will automatically give you a 15% discount. They'll also help you set up flat rate shipping & spend as much time with you as it takes to make it work.
Their customer service is fantastic! I've only had a couple billing errors in over 2 years & each time they issued me credits immediately.
I ordered a 3 CD Deluxe Astrology set for a friend of mine on eBay for 8.95 plus 4.95 shipping. Total cost to me was $14.90 with Buy-Now!
When the box arrived it only had one CD inside. I contacted the seller several times and received no response! Finally I asked Pay-Pal for a refund and filed a dispute! The seller never responded to the dispute! Pay-Pal has now informed me that I may receive some of my money back...but I have to send the box back first! They want proof of me shipping this product back to a seller who does not even bother to respond! Shipping will cost me around $3.20 with insurance and proof. Cost to me would now be around$18.10.
To make matters even worse, a wholesale company I sometimes buy from sent me their specials for sale!
My 3 CD Deluxe Astrology box was available for 99 cents! lol
If I give this dead beat seller a negative he will just give me a negative in retaliation! He is a big seller...70, 896 sales....I am a buyer, lol....and I will get a negative!
Ebay needs to hang it up. Their goose is cooked! I will never buy from eBay again.
PayPal holding funds for 6 months? Ridiculous. It's 21 days or until positive feedback is left for the seller, whichever comes first. Slight discrepancy there.
Another poorly researched, poorly written, and deeply biased article from a self-described "part time eBay seller".
Pull the other one.
There have been THOUSANDS of folks just like me (good, volume sellers with excellent customer service; many are good buyers too) pleading with eBay since February to quit "fixing" the system that has worked for years. Sure there have been a few bad apples on both sides of a given transaction. Is that any reason to alienate ALL of us?
We have voices and we're using them - but to no avail. The only (few - very few) eBay reps who bother to respond are limited to re-spewing the "company line".
The fact is, eBay does not care what we think. The fact is, they have made up - or maybe lost - their minds. The fact is, they WILL lose business.
But hey - I'm just another crackpot fringe kook out there, right? After all, individually, I only represent 1/140,000th of their average daily listings. With over 25 years in business, who am I to argue with a boardroom of newly minted MBAs?
"eBay - We know what's good for you!"
1. Those who complain that their ranking falls due to them having to raise prices ought to get it that if someone else with a lower price is being picked then it means you need to get competitive. Low price wins - what's wrong with that?
2. All the bullshit sites like ebid etc will never work. Do you have any idea how much research has gone in to make the decisions they make, invest in R&D etc?
Change is always difficult but you are all in business and so take it seriously. Things will never stay the same. Smart sellers adapt. For the dumb ass who said ebay's P/E is at 62, please understand what one time charges mean on a balance sheet and go look at forward p/e to get a better idea.
If you let your emotions affect your judgement, know that you will be the biggest loser. All the best guys. I wish for all of you to make more money on eBay.
Sellers sell to make money. Not live in abject slavery and codependency. With the expectation of more to look forward to!
Has anyone been able to keep track countwise of the policy changes enacted since the beginning of 2008? What's it up to now? 80? 90? Does this smack of stabillity? Or wishywashiness?
The other sites, whether you wish to acknowledge this truth or not, ARE growing. It took years to build ebay and make it what it was, and it will takes years and hard work to build other sites.
I already am doing better elsewhere(s) than I did with ebay and for much less stress. Believe it!
ebay also spent years stroking the "We're family" theme and then yanked out supports that were bogus to begin with. Emotionalize? Yeah, family fractures are the WORST kind. The response now should showcase the level of pain inflicted. Refusing to perceive this is idiocy. Of course it's emotionalized!!! Of course it's personal!!! Duh!!!
Finally, and last but certainly not least, ebay opened a Pandora's Box they can NEVER hope to close. Thanks to the likes of Youtube and Myspace, both of which far outrank ebay in site traffic, "networking" is now a piece of cake. A slam dunk. And with GoogleAdwords, opening your own site is nothing anymore. Most of the time I Google what I'm searching for now to see what crops up. And procede from there. You'd be surprised what crops up. The blinkers are now well and truly off. And no, ebay is seldom at the top of THAT list anymore. PLUS, Ecrater and other sites now employ GoogleAdwords site-wide. I could go on and on, but hey, I'm busy selling... elsewhere!
You see, let me make it a little bit plainer. I used to automatically "reach for ebay". first. Never, like most other folks I might ad, other sites.
Reflex reaction.
Not anymore.
That Pandora's Box I mentioned earlier?
Yeah.
In absolute truth, I don't think there will EVER be another eBay as we knew it again.
And that includes eBay.
changes across the board that effect me, you & all stock holders sellers and
buyers alike in a very negative way! To shoot the people in the foot who
made eBay just to redirect your business plan "eBay" is a direct insult to
us all. Suspending accounts, raising fees, creating robots that
automatically out bid you look around there your competitor now, and I could
go on and on and on, but we all know what they are doing and we have
expressed our concerns over and over again but we are not being heard folks.
Why because they don't care about you!!!
I respect your opinion because everyone's opinion is important but I don't agree with it. Here is my main reason why:
Prior to eBay John worked for one company his ENTIRE LIFE - that being Bain (1986 thru 2005) as a consultant. Prior to Bain he was student (Stanford 1984 thru 1986 and Dartmouth 1978 thru 1982). Note there is a gap from 1982 to 1984.
From the moment John walked through eBay's front door he started making changes based upon ignorance because he lacked experience. These changes included:
1) taking away premium stores FREE keyword advertising
2) flooding eBay with ppc advertising & cookies
3) opting MILLIONS of buyers into guinea pig tests from which there was no escape.
4) shoving best match down our throats knowing it doesn't work
5) making Paypal mandatory (more or less)
6) damned stars & no seller feedback
7) raising eBay fees & Paypal fees & holds
8) systematically destroying stores
. . . and these are only the highlights.
John's gross mismanagement of the site is so obvious that even Wall Street is worried and no matter what John does to "bring back buyers" it won't work because no seller trusts him. Who would?
If John really wanted to "fix" eBay he'd remove eBay's childish looking home page that begs teenagers to "sign up" & then resign because every change Donahoe made was designed to destroy sellers (which also happen to be eBay's buyers).
Does anyone know how many lawsuits have been filed against eBay or Paypal since Donahoe took over?
Please include the status of each suit (for example is the lawsuit still going on, did the court dismiss it, or did whoever filed the suit win).
Thanks!
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They have run out feet to shoot themselves in.
They don't seem to get it - no sellers, no buyers.
D'oh!
Phil Edwards - Vintage Movie Poster Dealer for 30 plus years
They have run out feet to shoot themselves in.
They don't seem to get it - no sellers, no buyers.
D'oh!
Phil Edwards - Vintage Movie Poster Dealer for 30 plus years
Most of these managers at the mid-level should be fired without any consideration. I personally have not seen any of them doing productive work and the only way they save their ass is by bringing in some top notch consultants at the last minute to save their ship. Its pathetic. Fire them !!!!
On Sep 06 02:18 PM Ahu wrote:
> I do understand seller concerns and I think anything that hits your
> sales and margins will hurt cause it hits homes. The purpose of these
> changes is to bring back buyers and drive volume. All the sellers
> will eventually benefit. As someone already correctly pointed out,
> this blog needs to be corrected with regards to assuming insurance
> is included in the price. Please post responsibly, you owe that to
> your readers considering you are linked with finance.yahoo.com that
> gets tremendous viewership.
> 1. Those who complain that their ranking falls due to them having
> to raise prices ought to get it that if someone else with a lower
> price is being picked then it means you need to get competitive.
> Low price wins - what's wrong with that?
> 2. All the bullshit sites like ebid etc will never work. Do you have
> any idea how much research has gone in to make the decisions they
> make, invest in R&D etc?
> Change is always difficult but you are all in business and so take
> it seriously. Things will never stay the same. Smart sellers adapt.
> For the dumb ass who said ebay's P/E is at 62, please understand
> what one time charges mean on a balance sheet and go look at forward
> p/e to get a better idea.
>
> If you let your emotions affect your judgement, know that you will
> be the biggest loser. All the best guys. I wish for all of you to
> make more money on eBay.
It is obvious that Ebay mangement have never even picked up a book, let alone opened one and read it.