'eBay's Spring Announcement and My New Plans'
by Lynn Dralle, The Queen of Auctions
eBay announced some shocking changes to fees in their latest announcement. The one that will affect us the most is that we will now be paying final value fees (fvf) on our shipping and handling. Luckily we are in the OOAK (One of a kind) business! That is the great news. We do have the larger margins to cover the eBay fee changes.
I ran my numbers for February and my eBay fees will definitely be increasing on July 6th (my birthday). Not what I was asking for . I would have paid approximately 19% more to eBay in overall eBay fees in February with the new fees. It works out to about 50 cents more per item sold on average. At a $49.99 price point with a shipping fee charged, my fees actually start to decrease. Remember this price point, but of course do your own research.
However, keep in mind that eBay is still the best place to sell our items, as eBay gets the most traffic and eBay believes that these changes will drive more buyers to their site and in turn to our items. Let's hope they are right!
In the last 12 years of selling on eBay I have seen a lot of changes. Some of them hit you hard, but I always sit back, take a good long look at my business model and figure out how I can evolve and still continue to run a profitable business on eBay. We can do it!
One of my favorite quotes that I shared with those of you in attendance at Lynn on Location was, "I have lived through some terrible things in my life, some of which actually happened." Samuel Clemens.
Keep this in mind as we navigate our way through the newest eBay changes. It is often a lot worse in our minds than what actually comes to be.
Especially if we all work together and brainstorm. That is what the Queen's Court is all about. I can't wait for our calls this month. I just know we can figure this all out and make positive changes.
Now let's look at some key issues.
Since we are selling heavier items, we can't and won't be able to offer free shipping on everything. In the past two weeks, I have been testing a few ways of listing and when I took a $9.99 coffee mug, added in the $9 shipping and would have to list it on eBay starting at $18.99 to offer free shipping, I just had to say NO.
Carmen had a really great point when we were all putting our heads together at Headquarters on Monday. She said, "Lynn, I shop on eBay all the time for items and I am not stupid. I will see an item that is cheaper but has a shipping price, and an item that is inflated with free shipping. I look at the total price charged." I agree with Carmen, our eBay shoppers are not stupid.
See this listing here.
Just last week, I had a gravy boat on sale in my eBay store. It was marked down to $22.49. A buyer in Australia offered me $25.00 to include shipping. I thought to myself, "Are you serious?" It will cost me $24.52 to ship this 3-pound item to Australia and my eBay listing fees, selling fees and PayPal fees will run about $3.45. Not taking into consideration my time or the cost of the item, I will be paying you $2.97 to take this off of my hands. Wow, what a great deal...for you! I explained this to the buyer and their response was, "I didn't realize that shipping was so expensive." Well, it is.
I have always said that Amazon was a more expensive marketplace to sell on than eBay. This price increase on shipping has put eBay right in their realm.
I do suggest selling on multiple sites. Amazon, Go Antiques and Addoway are some that I have tried or will be trying. Just remember that eBay is still our best site for traffic and sales. I have been on Addoway for about six weeks and have sold five items. I can't make a living doing that.
To make up that 50 cents per item I will be paying in extra final value fees, I am much more conservative with my sourcing. This is something that I should have been doing anyway. Thank you eBay for making me look at my entire business model.
I am asking my garage sale sources for better prices. I used to just purchase a lot of items without asking for a better deal. Last weekend I asked every single garage sale seller, "If I buy all these items will you give me a better price?" I saved $9 at one place, $5 at another and $1 at the last stop. In the past, I wouldn't have tried to save $1 but now I will.
Here is one of those items that I saved $5 on by not only buying in bulk, but asking very nicely if I could get a better deal for buying so many items.
See this listing here.
I bought 10 miniature perfumes for $10.00 instead of the $15.00 she was asking originally. That question there saved me the extra 50 cent per item that I will need for the new eBay fees.
I am also waiting for thrift store sales. I was going to buy three sets of stainless today at my local thrift store. Instead, I asked the salesman if any of them would be marked down soon. He pointed out the one with the yellow tag and told me it would be going half price on Tuesday. I will wait to buy it until Tuesday.
OK, the ezine was done, written and emailed to my brother. And then...I went to a thrift store tonight. I just had to update you all. I have officially become frugal, cheap, whatever you want to call it. I actually phoned my mother after the event and said, "I am officially a cheapskate".
Over the years, I would look at my grandmother and my mother with puzzlement. Why don't you just pay the $50? Why are you asking for a discount? NOW I GET IT. That is why they have been extremely successful. I was a spendthrift. And here is the definition from Wikipedia. "A spendthrift (also called profligate) is someone who spends money prodigiously and who is extravagant and recklessly wasteful. The origin of the word is someone who is able to spend money acquired by the thrift of predecessors or ancestors."
And my grandma, dad and mom were those ancestors who came before me that were thrifty. I have learned my lesson! It is very exciting. I GET IT.
So here is the life-changing event. I was in one of my thrift stores and found two Vaseline glass vases that each had a price tag of $5.00 on them.
I took them up to the cashier and asked if I could have them for $5.00 for the pair. When I was ready to pay, she said, "Even though they have only been on the sales floor for a few hours, I will make it $5.00 for both." Yay! I had my first epiphany that frugality works! It never hurts to ask for a discount.
Here is a listing for both of them.
I was going to list them separately like I normally do, when I checked PriceMiner/WorthPoint. (Will, thank you so much for joining us at LOL. (Will is the CEO of those companies)).
Will Seippel and I at LOL
I saw on PriceMiner that the antique Vaseline pieces that sold for the most were a matched pair of vases sold TOGETHER for $330.00. I immediately listed mine at a high sales price with FREE shipping.
I really don't like change . But I do have to say that even though change is hard, It does help us to take a hard look and become better people, both personally and professionally.
List large items now
I am opening the boxes in the Alps (a huge stack of boxes at Headquarters) and looking for big items. I am listing all lamps, large vases and anything that will cost a lot in shipping before the final value fees include shipping charges on July 6th. I suggest you do the same. We still have more than three months, so list, list and list.
I am also not looking to source huge, oversized items when out buying. I don't want furniture, large lamps, rugs or vases anymore. There is a beauty to this, as I won't need as large of a storage area at Headquarters.
here is a large item we listed recently.
Pretty cool! It is a secret hidden bar/bookcase. Even though I said Local Pick up only, I would let the new buyer arrange for shipping themselves.
Test your shipping strategy with Lightweight items
Think about what you can add the free shipping option to before the changes take affect. We all have some lightweight items in our mix, and now is a great time to test how the free shipping option will work.
eBay really believes in "free shipping" and they have statistics to show that it has increased sales in commodity type categories. CSA (Clothing, Shoes and Accessories) is one of eBay's largest categories and where they highly recommend free shipping. Mel and Steve did a brilliant job of explaining this strategy to those of us at LOL, and now Mel and Steve are perfectly positioned to actually be charged lower fees with the new changes in July.
Here is a clothing item that I listed based on Mel and Steve's wonderful advice. Yes, It does have "free shipping."
See this listing here.
Raise your Average Sales Price
You all know that I have been trying to do this. It is on the top of my to-do list this year on eBay. These new Spring changes will force me to make those adjustments faster. Again, I thank eBay for forcing me to take action. Sometimes, it does take these shocking spring changes to help us make our businesses more profitable.
At a $49.99 price point with an additional shipping fee charged, my fees actually start to decrease. Remember this price point, but of course do your own research.
Here is one of those more expensive antiques items that I am sourcing. Notice that during this testing period, I have added free shipping to this listing. I am trying it out on some of the more expensive items as well as on the lightweight items.
See this listing here.
The Top Rated Seller Back Office Discount is Super Important
I spoke with a rep at eBay in Salt Lake City this week about my personal account and ways to bring down my fees. He had great advice for me! Thank you Doug! He felt that the 20% increase in my final value fees due to shipping being charged, could be offset with the 20% TRS seller final value discount.
I haven't qualified for this in quite some time and he went over the individual 1 and 2 ratings with me. We are really falling behind in turnaround time. Well let's be real! Not only did we just plan and pull off a huge event in Las Vegas, but we moved our entire business down the road. So it is easy to see how our shipping and handling time has suffered .
We are committed to getting our turnaround time back on track and by offering free shipping on certain categories, I know that we will be Top Rated Sellers sooner rather than later. This will help immensely with the new fee change structure. And in fact, it may even lower our overall fees if we can raise our average selling price at the same time.
I encourage you to call the 1-800-eBay number and ask the account rep to take a look at your personal account and see if they can offer any suggestions going forward so that you can make these same types of positive changes now. Being proactive is much better than being reactive.
Hang in there, it will all work out. And remember that in this tough economy, we are all very fortunate to be running successful eBay businesses that still bring in a lot of cash. My eBay sales this year for Jan and Feb are up 63% over the same months in 2010. Listing more has definitely been working in our favor.
You know we want to hit the $1 million sales mark. We realistically now know that it is going to take a few more years to ramp up to that goal but we are not backing down. Think Big, Dream Big and remember, "The Harder I work the Luckier I get." Samuel Goldwyn.