Hey folks this is a guest post by a BRILLIANT business and eBay consultant named Jon Miller. I have known Jon for years now and he is a person I respect highly. Jon sent me an email about his findings on eBay’s announcements from January. I asked him if he would consider making a post of his thoughts, so here you go. Our first, but hopefully not the last, ColderICE.com post by Jon Miller, E-Commerce Business Consultant

eBay’s Hidden Fee Increases

In January, eBay announced some significant cuts to Insertion Fees for Fixed Price listings; there was a lot of hype surrounding the announcement, as fee cuts are big news on any marketplace, especially on eBay.  eBay announced that they would be dropping Insertion Fees on Fixed Price listings for eBay Store subscribers, down to as low as $0.03 per listing, depending on the Store subscription level.  eBay even offered a handy Fee Calculator to help eBay sellers determine which Store subscription level would be best for them.

The bonus included in eBay’s announcement was that they would eliminate the Store Format listing, and instead Store Listings would become Fixed Price listings, with all the great search exposure that comes along with Fixed Price listings.  This represents a big improvement for eBay Store sellers, since Store format listings were demoted to the end of search results – having that inventory get better exposure could be a big win for sellers.

But something that hasn’t gotten much press is the fact that a big fee INCREASE resides hidden between the lines of this announcement.  That fee increase comes in the form of higher Final Value Fees of Fixed Price listings when compared to the Store listing Final Value Fees.  For many eBay.com Store sellers, Final Value Fees have jumped as much as 32%; for eBay Motors Parts & Accessories Store sellers – where higher prices prevail anyways – the damage is even greater: Final Value Fees have jumped nearly 90% or more.

The bottom line is that merchants selling more expensive merchandise, who have adapted to the marketplace by utilizing Store Listings to the fullest, will now see their eBay fees skyrocket.  And although this change only affects sellers whose average sale price (ASP) is above $50, that still represents a significant number of eBay merchants.

It should be pointed out that lower Fixed Price Insertion Fees will partially offset these fee increases.  However, the average $50+ ASP merchant would have to be listing an enormous volume of listings in order for the insertion fee savings to fully offset the increases in Final Value fees.

Here is a quick look at a few price points and how the shift from Store listings to Fixed Price listings will impact their Final Value fees, for both eBay.com and eBay Motors:

One might ask, “What message does this unannounced fee increase send to merchants on eBay?”  Well, the obvious message is: either absorb the cost, or move that inventory elsewhere.

Here are a few recommendations for ColderICE.com readers who might be hit by these fee increases:

• Examine your eBay Store listings carefully, and determine how these Final Value fee increases will impact your business.
• Reposition your inventory.  Products which can absorb the fee increases can be kept on eBay as Fixed Price listings; the remainder of your inventory should be repositioned (e.g. bundled, sold in pairs/triplets, etc.) or moved off of eBay.
• Consider an alternative for those extra Final Value Fee dollars.  Shift that spending to an alternative form of marketing, drive the sale to your web site, and earn the lifetime value of that customer directly on your site.  For example, an eBay Motors Store seller with a $300 ASP will see an increase of $11.50 in fees per item sold.  Why not spend that $11.50 on pay per click advertising; those Google ads you’re running may appear at the bottom of eBay pages anyways (eBay is a Google Search Network partner).

The important point here for eBay Store sellers is to be aware of these hidden changes and how they will affect their business.  Adapt and thrive, or stagnate and pay higher Final Value fees – it’s up to you!

Editor’s note: You got comments on this, let Jon hear them. Please add your comments below to this discussion. We want to hear your position on this top.

The Aftermath:

eCommerce Merchants Atlanta

After Party

Welcome to HOTLANTA! What you heard is true, we know how to throw parties in this city. Take a break from the mundane and spend some time hanging out and having a few drinks with the "eCommerce Rock Stars".

This is the HOTTEST ecommerce party in this city for the eBay On Location event!!!

The Aftermath: eCommerce Merchants Atlanta After Party

Date: Friday March 19th, 2010

Time: 8:00 pm

Admission is FREE!

Register:  HERE

Location:

300 Marietta Street Northwest, Atlanta

(404) 885-1472

(2 blocks from the eBay On Location hotel)

Dress: Casual chic

Walking Directions:  Exit the CNN center or Omni Hotel facing Marietta Street. Turn left and walk 2.5 blocks. Stats is on the corner of Mariette and Baker.

Please Follow Our YouTube Channel

The Aftermath: eCommerce After Party 2010. This is the place to meet and greet after the eBay on Location events on Friday  in Atlanta. the after party is atomic and you have got to be on the VIP List! Register now and get up close and personal with the best and brightest minds in eBay, marketing, ecommerce and customer relationship management.

Featuring a private lounge VIP area for our guests, free drinks to the first 100 people in the door, prizes, giveaways at the "BEST Bar in Downtown Atlanta" a guaranteed good time.

   Join the Rock Stars of eCommerce

John Jantsch – Duct Tape Marketing

Richard Brewer-Hay – eBay Ink Blog

Brent Leary – Customer Relationship Management

Toby Bloomberg – Diva Marketing Blog

Peggy Duncan – Personal Productivity Expert

Charles Lumpkin – Ecommerce SEO Strategist

"JB" Braitwaite – Internet Technology Expert

George Trantas – CEO Designer Athletic

Marlene Gavens – The Savvy Seller

Melinda and Kat – Co-Hosts of eBay and Beyond Radio

Cindy Shelby – Web Sellers Circle

Hosted by eCommerce Merchants – Atlanta

with "Your Boy" John from ColderICE.com

plus YOU?!?

and many many more!

ProStores is Platinum Sponsors for The Aftermath: eCommerce Merchants – Atlanta Chapter After Party!

We’re pleased to announce that ProStores will be the platinum sponsor for “The Aftermath – eCommerce Party" here in Atlanta 2010.

 GOLD SPONSORS:

Apple Mac Book – ColderICE.com Un-Boxing Video

Get an extra layer of protection with the PayPal Security Key – it’s easy to use and portable, so you can access your account with confidence from just about anywhere. Some of you may already have a security key hanging from your key chain or maybe even one that fits inside your wallet or purse.

I have one on my key chain but my key chain is sometimes not in my possession at all times. My cell phone on the other hand is almost always in the hostler at my side.

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Why should I use the PayPal Security Key?

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What do I need to use the mobile phone security key?

You’ll need a mobile phone and service that supports SMS text messaging. Contact your mobile provider to make sure your phone and services are set up for SMS, and to find out your provider’s standard text messaging charges.

My account has never been hacked, why do I need this?

Even though this security feature from PayPal is over a year old, if you do a search on “Paypal account hacked” you will get over 1,480,000 entries that contain information on how you can hack into the average PayPal account that does not have a security key. Most of these entries are videos that show you step by step how they did it.

Some say a security key is overkill for most PayPal account owners and its too much trouble to deal with when you want to get into your account right away.  I say better to have the extra added security then to one day find out your account has been hacked and a large portion of your money is gone.  From what I am told it can take PayPal several days and sometimes months to investigate such a incident and PayPal will not replace the stolen funds until their investigation is complete.

Even if you are to cheap to pay $5.00 for the electronic token, the mobile version is Free by text for most cell phone carriers here in the united states.

For additional answers to your questions about the PayPal Security please see the PayPal Security Key FAQ

All the best

JB

Tonight I had the pleasure of presenting on the New Life Event hosted by Shawna Fennell 

Just in time for the love fest of Valentines day John Donahoe, chief executive of eBay has a new interview with the UK publication Times Online. This is a very candid look at the 49 year old Donahoe not seen before in print. Some notable quotes from the piece…

But numbers count, and after a slump in performance, eBay is moving forward again. The business’s fourth-quarter results, announced last month, were better than expected and at last eBay has extracted itself from Whitman’s controversial purchase of Skype, the internet phone firm.

And best of all, Paypal, its web-based payment service, is growing so fast it could soon overhaul everything else at the group. Suddenly, Donahoe’s revamp has gained real momentum.

Revenues at Paypal, which enable account holders to pay for goods without divulging their credit card details, are expected to outstrip the rest of eBay after 2012, as the business broadens its capabilities.

So is eBay now leaving the small seller behind? “Not at all,” he smiles. Small sellers can still use the auction format, or they can list on Gumtree (a UK based community classified site from eBay), the free-to-use classified site eBay bought in 2005. But times have changed. Buyers want goods shipped next day, packaged professionally and with the ability to return them. Donahoe’s priority now is the buyer experience.

The changes appear to be paying off. The company’s fourth-quarter revenues last year climbed 16% to $2.4 billion, with net income up fourfold on the previous Christmas at $1.4 billion. Full-year revenues hit $8.7 billion, up from $8.5 billion in 2008, despite the downturn.

There is SO much more to this entire interview please take some time and read it in its entirety and let me know what you think about it? I found it fascinating. Check it out HERE

It’s 2010 and things have changed, I remember back to 1997 when I sold my very first item on eBay long ago. It was a pair of tickets to see Elton John at Madison Square Garden in New York City. I scored some sweet lower level seats that cost me $300 bucks and then I could not get the time off to fly from Atlanta to New York so I had to sell them. I put them on eBay and started the auction at $99.00. Those tickets ended at $800 for the pair, and I was instantly HOOKED on eBay.

Of course it was years later in 2001 that we created the company that is now one of the more successful 3rd party sellers on sites like eBay, Amazon, Yahoo and the web. The ONE thing that I would attribute our multi platform success to is our constant tweaking of the brand. The ability to move and shift with the state of eCommerce has made my company successful in marketing on these different venues by simply keeping up with the Jones’ and then out pacing them.

When "everybody" is doing it, that is when we STOP doing it. When "everybody" sits, we stand. And I am personally pushing the envelope in design to really bring our look and feel to maximize the direction of the different platforms we sell on. And EACH platform has its own uniqueness, and what works on one, will not work on another. I feel like a mad scientist trying to concoct plans and scenarios to get a perfect blend and balance. So every year we look to update and redesign components of our stores and templates to keep positioning for success. So this is one of those times.

eBay is CHANGING and the entire world is changing whether you or I like it or not. And the eBay platform is NOT in the forefront of this change, their customer are. That is one of the things I think constantly gets dismissed every time eBay takes a dramatic step, the sellers scream and yell, but I NEVER hear the buyers complaining?!? Some point to declining sales on eBay to the changes on the platform, but I think a more realistic analysis would show that the declines are due to the platform not changing ENOUGH to keep pace with a very fickle consumer. Are these the correct changes? I don’t know, time will tell. What I do know is what changes will be right for my company.

eCommerce is changing rapidly and eBay MUST change just to stay competitive. You know why? Because eBay is trying to keep up with a buyer base that is changing and evolving and they are somewhat stuck with a small portion of their seller community that is fearful of any change. They are comfortable with ways of 15 years ago, still reminiscent of Beanie Babies and Jesus Toast auctions. Unfortunately time does move on and if you are not willing to move with it you get to sit on the sideline and watch. Some will close their shops, some will leave the platform, some will just give up. After you "give up the ghost", you can always create a "sideline spectator" blog site about it too if you like, I know several that choose to do that instead of actually selling on eBay…guess it pays more?!?

I found these pictures the other day on my PC and I had not seen them in years, this was my business in the early part of the last decade. I have never been so attached to a product line or ideal that I would not abandon it for success. I got in business to be successful in BUSINESS not be successful at selling a particular product to the detriment of my livelihood, WTH is that?!? There is an old saying that "pride goes before a fall", so I am not too proud to adjust my business plan instead of falling. We can not control the changes to the platform, but we can control how we react to the changes.

Sure I am like most sellers, I bitch and moan sometimes but then I have a funeral. I bury the past knowing it will NEVER return and move on to the next great thing. So here are just a few pictures of our past…

This one was early in our game, I was not too proud to use my kid as a model for our rolling coolers. This was back in 2002 when it was a novel idea and new to the market.

This was around 2004 when we were selling desktop and laptop PC’s. That was our business for years, selling electronics and PC’s. That was my dining room!!! We were eating in the living room back in a 2 bedroom condo long ago…wow.

Then I came across these pics, LOL! We got lucky and scored a van load of Tickle Me Elmos, just b4 Christmas in 2006, man those were FLYING off the shelf. We don’t even sell toys normally, but I was  happy to sell the hot Christmas toy that year and would do it again to have a successful season.

"Change is hard." "People hate change." Those are two of the most common quotes heard when you study change management. It occurred to me that if people hate change, they have a funny way of showing it. Every iPhone sold serves as counter-evidence. So does every text message sent, every aluminum can recycled, every new Facebook post. And I haven’t even mentioned the biggest changes: Getting married and having kids. (If people hate change, then having a kid is an awfully dumb decision.)

It puzzled me–why do some huge changes, like marriage, come joyously, while some trivial changes, like design or business plan changes, meet fierce resistance?

Some brilliant psychologists discovered that people have two separate “systems” in their brains—a rational system and an emotional system. The rational system is a thoughtful, logical planner. The emotional system is, well, emotional—and impulsive and instinctual.

When these two systems are in alignment, change can come quickly and easily (as when a dreamy-eyed couple gets married). When they’re not, change can be grueling (as anyone who has struggled to quit smoking can attest). In those situations where change is hard, is it possible to align the two systems? Is it possible to overcome our internal "schizophrenia" about change?

I am a stubborn spirit,  I simply do not have an "I QUIT" bone in my body. Neurologically I don’t have the option to just give up?!? This business is how we feed the kids, this is our business and we own it, to quit this and just get a job?!? HELL NO, that  is not a option. My ONLY option is to "meet and overcome all obstacles in my path" and that included the changes to eBay.

eBay would have to simply shut me down for me to run away from this venue. Honestly, I am not cheering the changes, I just know they are HERE to stay and that they come every year, like the seasons. After nearly 10 years in ecommerce, I not only expect them, I now have begun to embrace them. It is a challenge that I look to come at me year in and year out. But of course if I could not stand the heat, I guess then I would leave the kitchen…that day has not come. We have changed and tweaked the business model, the product lines and the pricing to stay on top of our game.

This should really be an interesting year and I am sure the next 2 change cycle announcements will not be as easy on us as this one from January. My guess is this 1st set of changes were the "easy" ones…hmmm. Gird up your self, cause there could be more arrows coming from San Jose. Will you stand or fall? Like the Elton John’s song says….I’m Still Standing (Yeah Yeah Yeah). Dayam, this video is soooo ’80’s LMAO

Hands down this is by far my favorite! I grew up with a single Mom and I wanted to do this SOOOO bad, LMAO

My Runner up is the Golden Girl Betty White

Wow these two just bring the funny!

Hey look like there is a new search thingy for the web called Google … ummm WTH? Bing got you scared, LOL

The one I HATED most would have to be replacing the Chihuahua with Charles Barkley…BOO!

In John’s recent eBay Price Change Challenge Mythbusters post he remarked in the comments section:

I believe eBay knows that some of those 62 million (Note: Refers to the number of current eBay Store Inventory format listings) will NOT move to core, cause it was the low .03 cents that allowed many to keep them on the site. I think eBay is charging MORE to actually "de-clutter" the system. Raising the price will action make people either SELL the stuff or get it OFF the platform.

Currently I have a Basic eBay Store with about 4,500 items listed on the site. Many hundreds of my items are listed for as little as $5 or less—they’re niche long-tail items you’d be correct in assuming they don’t turn-over very fast.

Will I be de-cluttering?

John’s extracted quote above seems to apply directly to me, however the morning the announcements came down from eBay I ran my numbers through their magic calculator and the results were surprising.

By upgrading my $15.95/month Basic Store to a $49.95/month Premium store and qualifying for the nickel per item insertion fees on Fixed Price listings the calculator claimed I’d knock about $125-$150 per month off of my bill.  That’s without changing any of my listing practices.

As with any changes the differences to each of our individual bottom lines are going to vary seller to seller.  Extremely so in many cases.  The morning I first read of the coming changes I looked them over and was first relieved that they weren’t going to have any obvious negative impact on my business.  By the time I ran my numbers through their fee illustrator I went from relieved and non-committal to happy over the changes.

I absolutely understand that just because eBay says it’s a fee decrease and I say my fees are going down that this isn’t necessarily going to save you one red cent.  In fact it might be costing you money, I get it.  It’s the wide range of businesses and styles of business across eBay which actually makes these changes both so controversial and interesting to discuss.

But bottom line, in my world my bill just went down.  In your world the reverse may be true.  The key is understanding what just happened and what changes you can apply to continue being profitable, even if that means discontinuing use of eBay altogether.

Towards that end I want to lay out the circumstances of my own eBay business which again, are going to differ greatly from seller to seller.  I think these few factors add up to show why these changes work for me:

1) I’ve been listing 800-1,200 Fixed Price items per month under the current fee structure.  Those listings, formerly 15 (media) and 35 cents now cost just a nickel, far off-setting the other 3,500 or so items that will cost me just an extra 2 pennies per pop.

2a) Low ASP. 

2b) Auctions as usual, which pretty much always start over 99 cents.

With auctions I’ll be paying 10 cents less per listing with most of my Final Value Fees only climbing from the existing 8.75% to the new flat 9% remaining the same because of my store subscription (thanks Karen!).

3) Overall quantity.  Having maintained an eBay Store in the past I’ve stocked it over time.  If I only listed auctions, the store upgrade would be an expense but necessary in some form to avoid 50c Fixed Price fees.  Already having a store I get to upgrade it and actually save by laying out more.

4) Top Rated Seller discounts.  I hate to put this one here because nothing’s guaranteed, but I’ve yet to see a negative impact.  I understand that this often varies category to category and I seem to be in a good place to benefit from it.

So back to John’s original quote, will I be helping eBay to de-clutter?  The obvious answer is no, since I can do what I’m doing and save doing it, however that indicates time standing still.  I add listings to the site on a daily basis, they sell much slower, so my current number of items in stock is going to continue to grow over time. 

How many nickels can I spend to list a $3 item that might take forever to sell?  The answer looks like 60 to break even, but it’s really not.  That $3 item listing is an ad, a portal to my other 4,500 listings, so the actual answer is I can afford to pay that nickel until the end of time as long as everything else is moving.

eBay aside, I’ve been working on my own off-eBay shop for some time, and so my plan coming into these changes had been to begin selectively retiring listings from eBay to farm them off to my new store.  I consider my vintage goods long-tail items, well, my off-eBay store is going to be the very tip of the tail! 

I’ll be pressing forward with this plan, but here’s the best part for me—I don’t have to if I don’t want to … and I can if I want.  eBay isn’t dictating this move to me, in other words, I’m facing no pressure from their changes.  Believe me, I can recall one eBay fee hike which clamped around my wallet so hard I was forced to immediately cut what were at the time 7,500 store items down to 600—that was several years ago and I’ve been working to up my inventory number ever since!

In the end my own hope for this round of changes is not to save that $125-$150 per month, but to keep my bill right around where it’s always been and use that extra money to list more and sell more.  If moving my store items to core works towards that goal then I’d happily pay eBay even more than my current bill in order to increase what I take home in the end.

So John, yes, I am going to de-clutter, but at the same time I’m going to re-clutter my eBay listings.

Did you know I was CEO of a green business? Did you know that you are TOO? If you are conducting business in your home, recycling boxes, recycling packing material plus delivering and picking up packages in bulk, then you are helping to promote some green agendas that are good for us all.

Reducing your overhead by greening your operations is just the beginning. Being an eco-friendly seller also says the right things to consumers and helps you stand out from the competition. With just a few simple steps, you can do your part for the planet, and do your business a favor in the process.

The The eBay Green Team believes small actions can make a big difference in the world. And that’s what the eBay Green Team is all about: encouraging and empowering individuals to buy, sell and think green every day.

It was started by 40 employees, and today, more than 2,300 employees around the world are eBay Green Team members — promoting green business practices within eBay, volunteering in our communities, and supporting environmental legislation.

I had the distinct please to grab some time with Amy Skoczlas Cole, Director of eBay Green Team and it was eye opening. The personal dedication and clear direction she had was an education in self awareness. Awareness of some things we small business owner are doing and can do MORE to promote a greener business.

The focus and members of the eBay Green Team are a collaborative effort both inside the walls and even greater, outside the walls of eBay. With millions of eBay sellers around the world the eBay Green Team have the capacity to encourages us all to reduce our footprints. I think our planet could use some reflective consideration for sustaining all our lives…I know you do too?

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