‘How to Deal with the Latest eBay Changes’
by Lynn Dralle, The Queen of Auctions

I was at eBay Live in 2008 in Chicago when I started hearing the “rumors” that eBay stores were going to go away. It put me into a panic. I was at a cocktail party with all the top eBay executives (since I am an eBay Certified Provider) and I cornered as many as I could to ask my questions!

I talked to both Dinesh Lathi and Rajiv Dutta.  Rajiv assured me that eBay would always support sellers of unique one-of-a-kind items like you and me because that is the basis of eBay’s Foundation. I think eBay’s announcements on Tuesday back up what I was told almost two years ago at eBay Live in Chicago. eBay is still supporting sellers of unique, one-of-a-kind items like you and me. Here is a link to the announcements if you have not seen them yet.

I love the first line from those announcements.

“It’s you–entrepreneurial sellers–who make eBay the world’s #1 online marketplace. In 2010, we’re taking steps to increase your profitability and bring you even more buyers.”

It really makes it clear to me that eBay does recognize that their livelihood is dependent upon smaller- to middle-sized sellers like us. The bottom line is this. If you are listing less than 50 items per month, you may want to opt for NO Store. If you are listing more than 50 items per month, an eBay store is probably the way to go. Here is more information that I have taken from the eBay announcements.

Choose the package that’s right for you. Sign up now, before February 16, and pay no additional monthly fee until April!

• Basic: 20¢ Fixed Price Insertion Fees, $15.95/month
  Consider a Basic Store if you list more than 50 Fixed Price or Auction-style items a month. It’s a great starter package if you plan to start an eBay business or ramp up your selling.
• Premium: 5¢ Fixed Price Insertion Fees, $49.95/month
  Great choice for higher volume sellers (more than 250 items per month) and sellers listing in both Auction-style and Fixed Price formats.
• Anchor: 3¢ Fixed Price Insertion Fees, $299.95/month
  Get the same great deal as the old Store Inventory format-now with full exposure in search results! With an Anchor Store subscription, higher volume sellers get top savings and the lowest package rates on eBay.

See fee charts for details.  Use the Fee Illustrator to help you decide.

NOTE: Starting in March, meeting the new minimum performance standard for all sellers will be a requirement for Premium and Anchor subscribers.

The Fee Illustrator is awesome. You can plug in your numbers and it will tell you which store level is best for you. Keep in mind that it is just calculating auction insertion prices at 10 cents each (it should ask you what your starting auction price is instead of just assuming 99 cents). That was the only glitch that I found while using it. I did a little analysis of my own business and I will include that for you here also. I have always had a premium store and for a few months I even tried the anchor store. The anchor store at $299.95 per month did not make sense for me back then, and it still doesn’t today. I would need to have about 10,000 items in my eBay store to make it pay for itself.

Here is the analysis of my business. I have 6272 items listed. 100 are auctions. I will continue to list 100 new auction items each week. Here are my current monthly costs:

400 auctions at 35 cents insertion = $140.00
6172 items in my eBay store
10 at 10 cents per month = $1.00
448 at 5 cents per month = $22.40
5714 at 3 cents per month = $171.42
Premium Store subscription = $49.95
Total Insertion fees per month = $384.77
Under the new fee structure:
400 auctions at 25 cents insertion = $100.00
6172 items in my eBay store
6172 items at 5 cents per month = $308.60
Premium Store subscription = $49.95

Total Insertion fees per month = $458.55

DIFFERENCE = $ 73.78

Final Value Fees (NO CHANGE because of my average price points being below $25.00)
85 auction items sold for an average of $12.44 at 8.75% = $92.52
422 store items sold for an average of $16.87 at 12.0% = $854.30

The good that I see coming from this:

1.     $73.78 is not a big change in my eBay fees for the extended exposure of my items showing up in a core search. The slight final value fee increase on sales prices over $25.00 will affect me very slightly. When eBay store items came up in core searches for a few months back in 2007 (I may not be remembering the year correctly), my business went through the roof. It was amazing the increase it had on my sales. We were all so bummed when eBay changed it back to store items just showing up in the store searches. This is going to be awesome!!! I wish it were happening sooner than the end of March. I think that the $73.78 extra I pay per month will be made up quickly with me just having to sell four more items per month out of my fixed price inventory. This has already been proven in the UK and Germany where the change in searches and store format has increased sales.

2.     Smaller sellers who are not serious will leave the marketplace. Once again, there will always be complainers who won’t want to modify their business strategy to fit with this new model. I say, fine, let them leave eBay. It will just leave more business for those of us who can adapt and make it profitable.

3.     eBay will soon flag listings that have not had any movement, sales, lookers etc. and this will help us to clean up our inventory.

If I want to make back that $73.78 increase, I could use eBay’s new flagging tool and take about 1475 (1475 times 5 cents is about $73) slow moving items out of my eBay store. However, I am going to continue with my two-year rotation of merchandise and see how great business is in April and May before I start purging slow-moving inventory. I hope you are all as excited about these changes as I am. I know that our eBay store businesses will continue to improve with these changes. Since I do about 80% of my eBay business from my eBay store, I am thrilled that these items are going to get the exposure they deserve!

Happy eBaying!
Lynn

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