eBay’s Latest Head-Scratching Promotion
Kevin Harmon is the CEO of Red Shorts Media LLC, which owns movie and music trade-in/buyback websites. He is the former CEO of Inflatable Madness, LLC, one of the largest DVD and CD resellers on eBay and Amazon.
Kevin has appeared on Startup Nation Radio multiple times, has been featured in The Wall Street Journal, has been a featured speaker at eBay Live, and has appeared on Fox Business Channel.
Latest posts by Kevin Harmon (see all)
- Amazon:What’s All The Hubub, Bub? - February 15, 2014
- Starting An eBay And Amazon Business In 2014: It’s All About The Cash Flow, Joe. - February 12, 2014
- Hey Used Video Game Sellers: The XBOX One Just Pooped In Your Sandbox - June 3, 2013
Late last week, eBay rolled a new site promotion. Here it is, taken from the Community Announcements board at eBay.com:
|***Offer Free Shipping and Get 15% off your Final Value Fees from May 23-June 1***|
Hi everyone. Offering free shipping is a great way to make your items stand out from your competition. Buyers love it, and it can help improve your Detailed Seller Ratings scores. If you haven’t already tried it, now is a great time to start. From tomorrow, May 23rd through June 1st, you’ll get 15% off your Final Value Fees when you offer Free Shipping on eBay.com and for Parts & Accessories listings on eBay Motors!
You can easily offer Free Shipping at the time of listing using either flat rate or calculated shipping. Not only could you get the discount, but items with Free Shipping also receive the eye-catching Free Shipping icon on the item page, and may receive additional exposure in Best Match.
To qualify, sellers must meet some basic criteria. For example, you must have a minimum score of 4.5 across all DSR categories (although new sellers with fewer than 10 DSRs are still eligible), and you can’t require insurance on the item. Check out our information page for all the details.
It’s a great time to try out Free Shipping, and enjoy the Final Value Fee savings!
After 6 years selling on eBay, and after becoming the 25th largest ebay seller worldwide, let me tell you from vast experience that eBay does not offer discounts to sellers just because they love us. They offer promos to either 1) test something they are working on (my biggest concern with this one), or 2) to inflate listing counts for Wall Street. When eBay rolls a promo, I’ve always felt blackmailed into doing it, because if I don’t do it, my sales during the promo will crash because the number of listings go way up and my sell thru % drops (and folks, I charge $150.00 an hour to consult, but I will tell you this one for free – sell thru % is EVERYTHING on eBay).
So why is this promo particularly insulting for a seller?
Math. I won’t bore you with the actual calculations – just trust me.
You sell a $10.00 item and charge $5.00 to ship it. Your eBay Final Value Fee to sell this item: .88 cents.
If you did the promo, you’d sell this item for $15.00 and Free Shipping. Your eBay Final Value Fee is: $1.11 !!!
You sell a $25.00 item on eBay and charge $6.00 to ship it. Your eBay Final Value Fee to sell this item: $2.19
If you did the promo, you’d sell this item for $31.00 and Free Shipping. Your eBay Final Value Fee is: $2.04
You sell a $100.00 item and charge $15.00 to ship it. Your eBay Final Value Fee to sell this item: $4.82
If you did the promo, you’d sell this item for $115.00 and Free Shipping. Your eBay Final Value Fee is: $4.54
So, the net effect of this sale is a fee INCREASE if you sell low priced items like I do, and pretty much a neutral to very slight decrease if you sell items over $25.00 or so.
This promotion has got me shaking my head. They can’t really think that their seller base is stupid (or can they?), so what are they testing?
They’re probably gathering Free Shipping baseline data for some changes that they’re working on. It could be requiring Free Shipping, or strucuting Free Shipping fees differently – who knows.
I think that right now, anybody selling items for under $25.00 needs to get busy going multichannel. When you stop smoking the eBay crack pipe and take a look around at ecommerce, you realize that there is lots of opportunity out there for your business.