eBay Changes = Too Much Stress!

I've come off the high of being quoted on CNN finally, and am back to worrying over the changes eBay announced. Here is the rundown of changes, and my thoughts on them so far (warning - if you aren't an eBay seller, reading the following could be like watching paint dry):

Fees
Free Gallery, Listing Fee Reduction, Final Value Fee (FVF) Hike

This is a horribly complicated issue, that varies from seller to seller depending on how you run your business. As far as I can tell, the ones who will be hurt the most are the sellers who didn't regularly use the Gallery option and have an average selling price of under $25. Those sellers that maintain a high sell through rate are also going to feel the FVF increase more, because they were losing less money in listing fees and so the FVF increase will not be offset.

For me, I think that I might save a little money on my auction fees, or they will be around the same. I always use Gallery, and my sell through rate hovers around 35%, which means I spend a lot of money listing and not selling. Where I have been spending 75c to start an auction at $9.95, now I will be spending 35c. Not too shabby!

What is bothering me the most is the raise on FVF for store items from 10% to 12%. It was already too high, and now it is just over the top. Between the FVF and PayPal's take, I'm looking at about 15% in fees when I sell something out of my store, not including the cost of the item, all the time it takes to process the item, taxes, etc.

I'm currently thinking on how to handle this. One option is to not list anything in the store that is under $25. Once you are over the $25 mark you actually pay less of a percentage in FVF, as the amount over $25 is only hit for 8% instead of 12%.

The problem is that the majority of my items are under $25. My average selling price on store items is around $15, actually. So what do I do? Raise prices across the board, and most likely sell less? Move my lower priced inventory to my Etsy store, where the fee is only 3%, but where I have less traffic, less experience, and less of an idea about the marketplace and what it will pay?

Or, do I go ahead and make the jump to setting up a store on my dot com, where I would just pay PayPal fees? This is where I would like to be eventually, but traffic is the big issue. Would people find my store? If they did, would they feel comfortable buying from me?

Of course I could also research other selling venues that I haven't used before - Ruby Lane and Tias come to mind. I have always kind of thought of them as higher end markets though, more of an antique mall atmosphere rather than a flea market one. But maybe that is what I should be trying for anyway?

Like I said, it's all very complicated. I'll keep you posted on what I decide.

Feedback
No negative feedback for buyers, DSR ratings tied to search/Powerseller status/PayPal

The feedback issue is what has the sellers most upset, and understandably so. The "level playing field" has been obliterated, all in the name of "improving the buyer experience." Now I understand the idea behind the whole thing - weed out the bad sellers. I am actually all for that, because bad sellers drive buyers off the site altogether, which hurts everyone.

What I don't think is fair is that under the Best Match sort some sellers are going to be favored over others according to their DSR ratings and Powerseller status. We all pay eBay to list our items, we should be treated equally. Personally, I switch to either Time Ending Soonest or Price + Shipping Lowest when I do a search, and hopefully most other people will too. Best Match is trying to do a bit too much thinking for me, when I am more than capable of making decisions for myself, thankyouverymuch!

What bothers me too is that eBay is apparently underestimating the impact of bad buyers on their new feedback system. Bad buyers are out there, and removing our ability to warn other sellers about them through feedback is a scary thing!

I would say 95% of all my eBay transactions are very easy and positive, for both me and my customers. I have 100% positive feedback, with a DSR (Detailed Seller Rating, otherwise known as Star Rating) right at the average - 4.8 out of 5 for Item As Described, 4.8 out of 5 for Communication, 4.8 out of 5 for Shipping Time, and 4.6 out of 5 for Shipping Charges.

I am not super worried that the niche I am in has a large number of buyers who want to leave negatives and bad star ratings maliciously or on a whim... I guess time will tell. The 5% of transactions that have weirdness or issues I have always managed to make right, without them hurting my feedback score. I hope that this will continue!

The trouble is that eBay has tied the DSR ratings not only to Best Match but to your Powerseller status as well - you have to maintain 4.5s across the board, and if you can maintain 4.6s or higher you receive a discount on your final value fees. My 4.6 for Shipping Charges is a little too close to the line for me to feel comfortable, which means I need to figure out a way of still shipping quickly, but at a lower cost.

Right now I think that means taking on extra risk by not requiring insurance, and figuring out a way to get my shipping supplies more cheaply, so I can cut my handling fee. We ship a lot of breakables, and go through bubble wrap and packing peanuts like they are going out of style. I like having new clean packing materials, but they are expensive!

They also are going to start holding PayPal payments hostage for up to 21 days if your DSR rating falls below 4.5 across the board, or if you have more than 5% buyer dissatisfaction. Personally, I don't think it should be legal for them to hold money sent to you, no matter what. Sellers shouldn't be asked to ship products when they haven't received the money! It's ridiculous.

There are other changes, the list is a mile long! These were the ones with the most impact, and as you can tell it is going to take a long time to figure it all out, and to see the kind of true affect they will end up having on doing business on eBay. I think it is good that they are forcing everyone to take a close look at their businesses though, that is never a bad thing!