Product Sourcing News   

BIN (Buy it Now) gets a big boost -- and other developments

FEATURED COMMENTARY

By Derek Gehl
CEO Internet Marketing Center

eBay made MORE big changes a couple of weeks ago.

Listed below are new policies for eBay in the US and Canada. Similar changes have been made on the UK and German sites.

Fixed-price listings revamp:

If you sell fixed-price items using Buy It Now, you could see some savings. But not necessarily. Depends what category you're selling in.

As of September 16, fixed-price listing fees will be a flat 35 cents and you have the option to have listings last for 30 days. You'll also be able to use the Good 'Til Canceled option, where your listing will renew automatically as well.

Listing fees in the Media categories will be reduced to a flat 15 cents. But from September 16 through the end of the year, if you sell books, video games, music or DVDs/movies and use pre-filled information your listings will cost only 5 cents.

Considering that you're now able to sell multiple identical items in the same listing, this could add up to savings for some fixed-price sellers.

These changes go hand-in-hand with increased final value fees, of course. You can see a breakdown of the new fees on the update page. The backend fees vary by category, with some going as high as 12% or 15%.

While fees for a few products will go down, this is going to mean a big increase for most fixed-price listings (look for a major backlash!)

But it brings eBay in line with its biggest competitor, Amazon, which charges a flat 15% once an item is sold.

The numbers explain why eBay is struggling to compete. The Gross Merchandise Volume (GMV) of eBay's fixed-price listings overtook that of auctions this year -- a first. And June figures showed eBay visits dropping by 10% while Amazon visits grew by 7%.

Therefore eBay has been doing everything possible to encourage sellers in fixed-price end of the business.

On the auction front, auction fees remain the same. So what we have now is essentially a two-tiered system that allows eBay to compete head to head with Amazon for fixed-price sellers, while maintaining the old system for auctions.

There will probably be a big reaction from eBay Store owners. Their fees are now only slightly lower than those of general fixed-price sellers -- while their store listings don't appear as high in eBay's search rankings.

Fixed-price listings will continue to be displayed along with the auction listings, with store listings generally bringing up the rear. But there's nothing to stop store owners from taking advantage of the new BIN prices or increase their auction listings if those options make financial sense.

Here are some further tweaks.

No more checks or money orders:

eBay is going to integrate all of its approved payment methods in eBay checkout in January of 2009. That will mean that customers will be able to complete a transaction without leaving the eBay site.

But it also means that you will no longer be able to accept money orders or personal checks.

As of late October 2008, only these payment options will be accepted:
• PayPal
• Credit card or debit card through a merchant account
• ProPay
• Payment upon pickup

Rewards for free shipping... and some limits on shipping costs:

Offering free shipping already improves your ranking in the search results. But with yesterday's announcements, there are a couple of other incentives that run from October 1 through the end of the year.

If you're a PowerSeller, you'll get double final value fee discount when free shipping is offered. According to eBay that's a 40% discount.

All sellers offering free shipping can use the Subtitle option for free (normally 50 cents). A subtitle is a great way to give more detail about your item right on the listing page and pull in more shoppers.

And to encourage reasonable shipping and handling charges in the Media category, eBay is imposing limits, as of October. These limits are pretty low compared to what most sellers are currently charging.

Check them out and make sure you're offering at least one S&H option that's within the set limit.

Want more answers for your inquiring mind? Here's the overview of all the changes and the FAQ page.

Final thoughts

I can understand if your head is spinning. All this upheaval is a lot to take in. The eBay you used to know and love is making a major shift toward fixed-price listings for popular commodities.

And that makes sense...

People look to the Internet as their big shopping mall now. They don't want to wait to see if they've "won" a brand-new pair of shoes or the top-selling DVD. They just want to buy and move on.

So if you're in mass-produced products, fixed price is definitely the way to go. It'll save you time and hassle. Possibly even some money. And eBay is going to do everything it can to keep you happy, because it doesn't have the marketplace all to itself anymore!

If you're selling things that are rare, unique, or collectible, don't forget... eBay is still the world's largest auction market. It's the first place people go when they want something they can't find. Auctions will continue to be an vital part of eBay.

The changes will keep happening... so if you're serious about making a profit on eBay, you want to know IMMEDIATELY how to swoop in and take advantage of new strategies while your competition is still reeling.

Here's to your continued success on eBay!