February 2008

1. Message from Derek Gehl

Welcome to the February issue of Bidding Frenzy.

This MONSTER issue is your survival guide to the huge overhaul that eBay announced at the end of last month -- a whole whack of changes that will probably affect your bottom line.

These changes have left a lot of sellers reeling. So we've got the information you need in this issue to help you sort through it all.

Fees are in the spotlight... and what looked like a fee break when the announcement was made turns out to have a nasty afterburn. Read how much Final Value fees are going to cost you.

In our feature article, Detailed Seller Ratings play a bigger role than ever before, and it's one that will affect your business. Learn how to thrive under the new rules by following our detailed tips to keep those rankings in the five-star range.

Sellers have lost the right to leave negative or neutral feedback for buyers and the eBay forums are seething with complaints. However, that's not the whole feedback story. You'll find out what other feedback rules come into play.

But hey, if you're just fed up and want to take your business elsewhere, we'll show you some eBay competitors you can try out.

Plus, find out what happened when an eBay buyer bought a brand new, mint-in-box Apple IIc computer and (horror of horrors) actually opened it so he could play games from his childhood! Check out this month's featured auction for the whole story.

Let's start with a look at eBay's timeline for implementing this mass of recent changes...

2. Calendar of change

2008 is definitely the year eBay has chosen to shake things up, bringing in a slew of changes that will change the way you do business. To make things simple, we've created this handy date guide so you can see exactly when these changes are taking place, and how they're going to affect your business on eBay.

Date: Started February 20, 2008
Insertion Fees

Change: The various fees charged for listing a product on eBay have been lowered by between 5 cents and 80 cents, depending on the starting or reserve price.

eBay says: eBay North America's President, Bill Cobb, states that prices were cut because users preferred to pay only when they successfully sold an item on eBay. He also asserted that high insertion fees have been a deterrent for people looking to sell items eBay in the past.

What to do Nothing... sit back and pay less to list! However, the minimum starting or reserve price for fixed price listings is now $1.00. So, while you used to pay nothing to insert an item for $0.99, now it will cost you 25 to 35 cents. This doesn't affect auction listings.

Date: Started February 20, 2008
Gallery Fees

Change: Adding a Gallery picture to your listing in now free. This means an upfront saving of 35 cents.

eBay says: Cobb also reported that, when asked what they wanted, sellers said "free Gallery images"... so they that's what they're getting.

What to do: Make the most of this offer and always add an image to your item listing!

Date: Started February 20, 2008
Final Value Fees

Change: Final Value fees are substantially higher (see the next article).

eBay says: This fee increase is anything but good news for sellers, and the reasons for it have been glossed over a little by eBay. They say it's their way of balancing the changes to listing fees by adjusting some of the final charges.

What to do: Shake your fist at eBay for hiking up this fee by a significant 2.5%. A 5-cent saving up front is not going to cover the cost of losing 2.5% of the final sale, no matter how they spin it.

Date: Started February 20, 2008
Media Listing Fees

Change: Books, music, movies and video game software now have lower insertion fees than other items. (Media listings DO NOT include video game systems.) This is only for auctions and fixed price listings under $24.99, however.

eBay says: This fee cut was in response to requests by sellers for media and category-specific pricing.

What to do: As long as you're selling media items under $24.99, then you'll be saving up to 25 cents on the original listing fees.

However, fixed price listings must start at $1.00 now, which means the minimum fee you'll pay is 15 cents, whereas a listing under $1.00 used to be free.

Date: Started February 20, 2008
Minimum Starting Price for Fixed Price, Store Inventory and Buy It Now Change:

Although lower insertion fees will put a smile on a lot of people's faces, there is a catch.

Now you must list any item with a fixed price for a minimum of $1.00... which means there are no more free listings on eBay! The lowest you can expect to pay for a product in Fixed Price, Store Inventory or Buy It Now is 35 cents. Even an Auction-style listing will cost you 15 cents.

eBay says: There hasn't been any comment on this change at all by the folks at eBay.

What to do: One of the strategies we recommend for building up good customer feedback on eBay, is to sell simple information products -- like eBooks -- for a fixed price of $0.99.

Selling a $0.99 eBook used to cost you a total of 5 cents after eBay took their final value fee (5.25%), leaving you with a 94 cent profit - and, more importantly, meaning you weren't out of pocket if the item didn't sell. Now it would cost you almost 44 cents, leaving you with just 55 cents after the final value fee (8.75%)!

Our recommendation: sell your information products as auctions, and look at the cost as an investment in building your feedback and Detailed Seller Ratings (which should be great seeing you deliver your product instantly).

Started February 20, 2008
Tiered Pricing for Featured Plus Listings

Change: Featured Plus listings (in which your items are listed under the Featured Items section in eBay searches) used to cost a flat rate of $19.95.

Now items with a starting or reserve price under $24.99 will cost $9.95, those under $199.99 will set you back $14.95, and items over $500.00 have gone up by $5.00 to $24.95

eBay says: Bill Cobb announced that tiered pricing makes this a more accessible option for sellers.

What to do: The biggest advantage with this change will be for sellers with items being sold close to $200.00... you'll save $5.00 to have your auction come up on Featured Listings.

But don't forget that if you have more than one of an inexpensive item to sell, Featured Plus is a great way to get those items in front of a huge crowd -- and now if you feature an item listed for under $24.99 you'll save $10.00.

Featured Plus rates for Classified Ads have also increased by the following:
  • 30 days -- $24.99 (+$5.00) 60 days -- 49.90 (+$10.00)
  • 90 days -- $74.85 (+$15.00)

Started February 2008
Expanded Seller Protection from PayPal for PowerSellers

Change: PowerSellers are already protected against unauthorized and non-receipt claims and chargebacks. Now, with expanded seller protection:
  • PayPal will no longer require PowerSellers to ship to confirmed addresses for items sold on eBay. Every address in the PayPal system will be considered a confirmed address for PowerSellers.

    There will be unlimited protection coverage (rather than a $5,000.00 limit).

  • Seller protection will also cover transactions with buyers in many markets around the world (instead of only to US, Canada and the UK).
eBay says: Cobb believes PowerSellers will definitely be happy with what eBay is doing for you in this regard.

What to do: These are positive changes... although they're only applicable to PowerSellers, and becoming a PowerSeller just got a lot harder, as we explain below.

Date: March 2008
Safe Payments

Change: In some cases, eBay now requires sellers to offer either PayPal or a merchant credit card to buyers for payment.

eBay says: It is working with PayPal to make buying safer on eBay; giving buyers safer payment options to help increase satisfaction and improve the marketplace overall. Enforcing stringent minimum standards for selling on eBay will discourage bad seller behavior on the site.

What to do Most sellers offer PayPal or merchant credit cards as a payment option anyway, but if you don't, and you fall into one of the following categories, it will be mandatory as of March if you:
  • Have had more than 5% dissatisfied buyers in the last 30 days Have a feedback score of less than 100
  • Are listing items in the following higher-risk categories (and sub categories): Gift Certificates, Video Games, Cell Phones, Computers, and Consumer Electronics
If you fall into one of these categories, you should read the safe payments section on eBay's FAQ page or the Accepted Payments Policy page.

Date: March 2008
Search Rankings

Change: Best Match is to become the default sort in search and browse throughout eBay. This has already happened in five categories since January 17, 2008: Computers & Networking, Consumer Electronics, Cell Phones & PDAs, Cameras & Photo, and Toys & Hobbies.

Best Match will now be based in large part on Detailed Seller Ratings. Sellers with high levels of customer satisfaction (4.6 DSRs and above) will rank higher when people search on their products.

Sellers will get decreased exposure if they have more than 5% dissatisfied buyers or very low Shipping & Handling Charge DSRs over the last 30 days.

eBay will not give an advantage or a disadvantage to sellers with low or no DSR scores, as long as they have less than 5% dissatisfied buyers.

Keep in mind, buyer satisfaction is not the only Best Match ranking factor. Listing keywords and historical buyer behavior on eBay for similar searches also influence rank.

eBay says: These changes will increase the odds of a good buying experience.

What to do Changes to the Best Match sort feature basically boil down to DSR scores. If you have a higher score, you'll get a better listing spot.

To make sure you rank well, follow the strategies in our Feature article.

Date: April 2008
PowerSeller Fee Discounts

Change: PowerSellers in the United States or Canada will start getting Final Value Fees discounts in April. These will be based on their detailed seller ratings (DSRs) for the last 30 days. Discounts will apply to sales on or after February 20, 2008.
You get a 5% discount if your DSRs are 4.6 or higher, and a 15% discount if they're 4.8 or higher.

eBay says: eBay asserts that its PowerSeller fee discounts are their way of recognizing and rewarding sellers who consistently provide excellent customer service on eBay.

What to do: You qualify for the PowerSeller fee discounts if you:
  • Are a member of the United States or Canadian PowerSeller program; and
  • Have maintained excellent DSRs over the last 30 days in all four areas -- item description, communication, shipping time, and shipping and handling charges.
All four of your DSRs must be equal to or greater than 4.6 for deeper discounts. (Harder than it sounds, as you'll see in our Feature article!)

These discounts are for those who qualify as PowerSellers before the new terms come into place (i.e., if you're a PowerSeller at the moment). Once the new terms come in (in July), you have to meet those before you can still qualify for these discounts.

Check out the PowerSeller portal if you have more questions about this change.

Date: May 2008

Change: In the most controversial new change to eBay, sellers will no longer be able to leave negative or neutral Feedback for buyers.

eBay says: Bill Cobb had more to say on this change than any of the others, stating, "Today, the biggest issue with the system is that buyers are more afraid than ever to leave honest, accurate feedback because of the threat of retaliation. In fact, when buyers have a bad experience on eBay, the final straw for many of them is getting a negative feedback, especially of a retaliatory nature.

"Now, we realize that feedback has been a two-way street, but our data shows a disturbing trend, which is that sellers leave retaliatory feedback eight times more frequently than buyers do ... and this figure is up dramatically from only a few years ago.

"So we have to put a stop to this and put trust back into the system.

"But I think -- and I'm sure you'll agree -- that the most compelling reason we need to change feedback is so that buyers will regain their confidence on eBay and they will bid and buy more often."

What to do: Obviously the implications of not being able to leave negative Feedback can be huge for sellers. See our Feedback article for more information on how this might affect you, or check out the FAQ page eBay has created to address this change:

Note that the current Mutual Feedback Withdrawal system will remain in place until the second half of 2008, so any unresolved issues you have before the Feedback changes take place in May can still be acted upon until then.

Date: July 2008
PowerSeller Status

Change: PowerSellers are awarded a number of benefits on eBay, but qualifying for them just got harder.

Starting July, a score of 4.5 or more on all DSRs (based on the last 12 months) will be required for membership in the PowerSeller program.

eBay says: According to Bill Cobb, "We want the PowerSeller icon to really mean something to buyers and sellers.

"Given that this program has historically only required a certain level of sales and a 98 percent positive feedback rating, a number of our buyers have complained that there's not a consistently great experience when they're buying from PowerSellers.

"We're going to change all that by making PowerSeller status a competitive advantage... and it all starts with setting a higher bar for sellers using their DSRs."

What to do: This means you will be rated on...
  • Describing items well; Communicating with buyers effectively; Shipping items quickly; and
  • Charging fair and accurate shipping costs
The overall score (your DSR) must remain above 4.5 for 12 consecutive months to qualify for PowerSeller status.

One of the biggest disadvantages for sellers is that you now have to maintain your DSR rating for the full 12 months.

If your figure dips below 4.5 one month -- in June, for example -- then raises again, you won't qualify as a PowerSeller again until the following June. Your 12 months starts from scratch each time your DRS falls.

For more information on DSRs and how you can keep yours from dipping, make sure you read the Feature article!
3. Do the math -- what will the fee changes cost you?

The recent fee changes introduced by eBay have created a firestorm among sellers.

While eBay has given with one hand -- by lowering insertion fees and eliminating the basic Gallery fee -- it has taken away with the other, by increasing Final Value fees.

As you've seen, there have also been changes to the prices of more advanced features, such as Featured Plus!, Pro Pack, and Homepage Featured.

eBay says the changes will reduce the upfront risk of listing an item and reward successful sellers. But many sellers believe the changes, particularly higher Final Value fees, will hurt their profits.

Here's a breakdown.

1. It will cost you less to list your items for sale on eBay

Basic insertion fees have been reduced by as much as 50%, depending on the type of listing and the starting or reserve price.

For example, here's what the insertion fees for auction-style listings look like now:

Starting or Reserve Price
Old Insertion Fee
New Insertion Fee
New Insertion Fee for Books, Music, DVDs & Movies, Video Games
$0.01 - $0.99 $0.20 $0.15 $0.10
$1.00 - $9.99 $0.40 $0.35 $0.25
$10.00 - $24.99 $0.60 $0.55 $0.35
$25.00 - $49.99 $1.20 $1.00 $1.00
$50.00 - $199.99 $2.40 $2.00 $2.00
$200.00 - $499.99 $3.60 $3.00 $3.00
$500.00 or more $4.80 $4.00 $4.00

Click here for full details of the new insertion fees.

2. It's now free to include a picture in your listings

eBay has eliminated the basic Gallery fee for all types of listings and it has lowered other Gallery fees such as Gallery Plus and Picture Pack.

Click here for full details of this, and the fee changes for advanced options.

3. You'll pay eBay more when you sell an item

Here's what's got eBay sellers up in arms: higher Final Value fees.

The amount you'll pay will continue to depend on the type of listing and sale price, but eBay has increased its cut dramatically.

For example, if you sell an auction-style or fixed-price item for $25 or less, you now pay eBay 8.75% of the closing value -- up from 5.25%.

Click here for a full breakdown of the changes.

Let's see how all this works in practice...

Suppose you sell a pair of shoes for $60 in a fixed-price listing that includes a picture.

$2.40 (insertion fee)
$0.35 (Gallery fee)
$1.31 (5.25% of the initial $25.00 of the closing value)
$1.14 (3.25% of the remaining $35.00 closing balance)

$4.90 (Total amount you pay eBay)
$2.00 (insertion fee)
$0.00 (Gallery fee)
$2.19 (8.75% of the initial $25.00 of the closing value)
$1.22 (3.50% of the remaining $35.00 closing balance)

$5.41 (Total amount you pay eBay)
Media sellers pay less

Although eBay is lowering its insertion fees for almost all types of listings, the biggest percentage reductions are for Books, Music, DVDs, Movies, and Video Games. (Perhaps eBay is worried about sellers moving to Amazon.)

Suppose you sell a CD for $15 in a fixed-price listing that includes a picture.

$0.60 (insertion fee)
$0.35 (Gallery fee)
$0.79 (5.25% of the $15.00 closing value)

$1.74 (Total amount you pay eBay)
$0.35 (insertion fee)
$0.00 (Gallery fee)
$1.31 (8.75% of the $15.00 closing value)

$1.66 (Total amount you pay eBay)
What's your reaction?

Some sellers reacted by boycotting eBay last week. This appears to have had some effect. The number of eBay auctions dropped from 14.5 million on February 18 to under 11.9 million on February 21, according to Medved.net.

How will the changes affect your business on eBay? Did you take part in the boycott? Let us know at ebaynewsletter@marketingtips.com.

4. Feature Article: Detailed strategies for acing the Detailed Seller Ratings

eBay has overhauled the way it separates good sellers from bad ones, and it's all about Detailed Seller Ratings. Detailed Seller Ratings (DSRs) are four categories in which buyers rank a seller 1-5 stars for each one:

  1. Describing items well Communicating with buyers effectively Shipping items quickly
  2. Charging fair and accurate shipping costs
If you're a regular seller, your Detailed Seller Rating will now determine your listing position in eBay's search results.

If you want to be a PowerSeller, DSRs largely determine your eligibility.

If you're already a PowerSeller, high DSRs will save you money on fees. BUT low ones will get you busted down to regular seller status! (More on that at the end of the article.)

Think of it as a carrot dangling from a stick: if you get consistently high scores in all four categories, you get rewarded with a tasty treat. If your scores are too low, that stick is going to whack you!

Let's look at each of the four DSR categories and what you can do to earn the highest possible scores in each one.

1. Item description

Your item description has always played a huge role in selling your item. Now it plays a huge role in selling ALL your items, so make it count.

  • Don't be afraid to overdo it. When describing items in your auction listing, there's really no such thing as too much information. If your items come with copy straight from the manufacturer, include it... but don't stop there.

    Include your own perspective on the item. Tell a story to keep your readers engaged. Describe as many features and benefits of your item as you can think of, and make it worth reading. Mention part numbers, where it comes from, the purpose, and history of the item. Include links, sources, and relevant information sites if your item is at all unusual or unique.

    Show pictures. Pictures are worth more than just a thousand words; pictures will improve your profits. And more pictures will bring you MORE profits. Not only will photographs make your item stand out from other listings, they give your customers more information about your item.

    Mention any and all flaws. Make sure your auction listings accurately represent the items you're selling -- don't leave them as surprises. If there are ANY flaws, blemishes, or marks of wear, point them out in photos if possible. Used and well-worn items sell all the time on eBay, and item condition is not as important to buyers in some categories as it is in others. What IS important is accuracy and honesty.

    Put your items in the right category. Most sellers list their items under the right category, but eBay changes, additions, and reorganizations sometimes mean your item doesn't always end up in the right sub-category.

    If the category says one thing and the description says another, expect a certain percentage of your buyers to believe the wrong one, and blame you for the error.

  • Specify shipping details. Include information such as shipping service, cost, and package details in the shipping details section of your listing AND in the description. Your listing may get better exposure in search results, and buyers will know exactly how much it costs to ship the item. Listings with shipping details are more likely to sell and may also get higher feedback ratings for shipping.
2. Communication

Communicating with buyers effectively will solve misunderstandings before they arise, help sell your items, and now affects your seller rating more than ever before.

To make sure you're taking advantage of this easy-to-succeed-in ratings category, follow these tips:

  • Be crystal clear about everything. Your item description is your first communication with your buyers, so make sure it's not confusing.

    Double check part numbers, stock photos, and categories, and if you're using a template from previous auctions, go over every inch of it before posting. Clearly state your shipping and return policies and make them highly visible in your listing.

    Use eBay Messages and autoresponders. Keep your customers in the loop by updating them every step of the way. Notify your customers via eBay messages when you receive payment, ship their item, and leave them positive feedback.

    Use your own email autoresponder (if you're a high-volume seller) or personal email to add a more personal greeting, and later, making sure they've received the package on schedule. If you sent the item via trackable delivery, make sure they get the tracking number as soon as you do.

    Answer emails promptly. The easiest way to do this is to download the free eBay Toolbar. You'll be notified of incoming emails without logging in to eBay, and it's a handy way to keep track of all aspects of your eBay sales.

    If there is ANY hint of a problem, deal with it immediately. If you made a guarantee, live up to it, and do everything you can to keep that customer happy. Refunded sales can still leave you feedback, and a sale that resulted in a prompt and courteous refund can still get you five stars in all categories.

    Add the personal touch. It's so easy to include a short thank-you note in the package... but it's just as easy to include some sort of free surprise extra that costs you hardly anything. These little touches have a BIG effect.

    After the item arrives, send another follow-up to ask if everything arrived okay, and above all, be friendly and positive in all your correspondence. It just puts people in a better mood, and when they're leaving you feedback, that can only be good news.

  • Show what you're doing to meet DSR criteria. List the four DSR criteria under their own headings in a Customer Service section of your auctions. Under each heading you can lay out exactly what you do to address these vital areas of a buyer's eBay experience.

    You can then point visitors towards specific feedback that praises your customer service in these areas. This will help prove that you're a seller who can be trusted.
3. Shipping time

Although eBay tries to encourage buyers to rate this section only on how long it took the seller to get it in the mail, some insist on holding the post office accountable via your DSR. To decrease the likelihood of this happening, we offer a few tips based on two main points: get it in the mail fast, and keep the customer informed at every step.

  • Set up your shipping center. Create a defined shipping area and always use it! It can be a whole room or a corner of the garage... even just a table with some shelves next to it. Find out how to set up your home shipping center in this article.

    Tell the buyer where it's at. At every stage of the shipping process, you want to let the buyer know what's happening. After they pay, leave them positive feedback and tell them when the item will be shipped. Send another email (automated if possible) when it's on its way. And it's easy to automate another email a few days later that asks if they've received it yet.

    Use PayPal shipping labels. You can pay for shipping and print your U.S. Postal Service or UPS label with PayPal. The service is free, convenient, and easy. PayPal shipping labels provide tracking numbers and help you communicate with your buyers.

    According to eBay, sellers using PayPal label printing have higher DSR scores across the board -- for shipping price, time and communications. Bar-coded labels may help speed your items through the post office, and you'll have the benefit of address verification and zip code extensions.

    Buyers will also receive an email letting them know their address label has been printed, and their package is on its way.

    Track your package. If you don't use PayPal label printing but instead ship with a service that offers tracking, you can now upload the tracking information in My eBay, and it will be visible to the buyer. Buyers like to know that their package is on its way -- and you'll be happy knowing when the package has been delivered.

  • Use U.S. Postal Service Delivery Confirmation. When you pay for shipping and print a U.S. Postal Service label on PayPal, you receive free Delivery Confirmation for Priority Mail and Express Mail packages, and lower-cost Delivery Confirmation for First Class, Media Mail, and Parcel Post packages. You and your buyer will have a record of when and where the item was delivered.
4. Shipping costs

Charging fair and accurate shipping costs is a must in the new environment. Even if you do everything perfectly, some buyers just won't give you five stars. Don't let it bug you --just control what you can control and hope it'll all average out.

In the meantime, follow these tips to nip any potential problems in the bud.

  • Specify shipping details. We can't repeat this often enough. Include information such as shipping service, cost, and package details in both your description and in the shipping details section of your listing. Make it stand out through highlighting so people won't be able to ignore it. People don't read! You have to hit them over the head.

    Make sure you're offering a competitive rate. Research the shipping costs buyers would see on other websites selling similar items. And while a seller's DSR score may not always reflect their current shipping behavior, it can be helpful to look at the shipping practices and costs of other sellers with high DSR scores in your category.

    Use calculated shipping. When you use calculated shipping (http://pages.ebay.com/help/sell/actual-rate-example.html), you won't need to guess the amount it will cost to ship the item in the U.S. or internationally. eBay will automatically calculate the shipping costs for your buyer based on your ZIP Code, the buyer's ZIP Code, package details, and shipping service. Buyers will know exactly how much it costs to ship the item. Also, buyers who live close to you may see lower shipping costs.

    Provide details about any packaging or handling charges. You can (and should!) include a reasonable handling charge to cover the cost of mailing, packaging, and handling the items that you sell. If you decide to add a handling charge, let the buyer know what it covers. In the item description, clearly state how your item will be packaged and what the related costs are. For more information about appropriate handling costs, read the eBay Excessive Shipping Charges policy.

    Offer free shipping. Consider offering free shipping. Free shipping can work well for certain categories and items. And it's one of the most attractive offers you can make to a potential buyer. You may attract more buyers by offering free shipping.

  • Offer combined shipping. Offer buyers savings on shipping when they purchase multiple items from you. Buyers can see the shipping discounts you offer when they view your item, and the discounts may encourage them to buy additional items from you.
Never neglect the basics of preventing bad buyer experiences: most problems can be prevented before they actually become problems, and they're easier to fix now than after the fact.

How DSRs affect PowerSellers

Internet Merchants Association President (and eBay PowerSeller) Steve Grossberg recently presented some of the results of his research into the new changes, and they don't look good for PowerSellers.

Under the old system, sellers could attain PowerSeller status by selling an average of $1000/month for three months in a row, having a feedback score over 100, and having 98% positive feedback.

Under the new system, you're also required to have maintained a rating of 4.5 or higher for the past 12 months in all four detailed seller ratings (DSRs).

When the Internet Merchants Association (IMA) looked at the top 100 eBayers selling on eBay.com, they found that only 44% of them scored a combined average of 4.5 or better.

If this rule stays, that means 56 of the top 100 sellers in the country are going to lose their PowerSeller status!

And what category did most of the PowerSellers score the lowest in? SHIPPING.

Broken down into individual categories, the number of sellers scoring 4.5 or higher is as follows:

  • Item description: 99 of the top 100 sellers Communication: 93% Shipping time: 81%
  • Shipping costs: 44%
In fact, the average score for the top 100 sellers was 4.1 on shipping costs.

Even sellers that offer free shipping --which should translate to five stars for the shipping cost rating --only get an average of 4.7! Clearly, buyers are using the DSRs to voice their displeasure with the post office, or with UPS, or with something other than the seller.

It just goes to show you, you really need to do everything you can to keep your ratings high!

The other issue concerns the much-hyped fee discounts for PowerSellers.

For a PowerSeller to earn a 5% discount on their Final Value fees, they need to have all DSRs 4.6 or better but to get the 15% discount, all four DSRs need to be 4.8 or better.

After looking at the numbers again for the top 100 sellers on eBay USA, only one of them qualified for the 15% discount.

Considering the amount of ink eBay has devoted to announcing fee discounts for top sellers, leaving 99% of them out of the loop is sure to ruffle a few feathers.

You can download the PDF of IMA President Steve Grossberg discussing his findings by clicking here.
5. Has eBay broken the feedback system?

Feedback has been the cornerstone of eBay's business for years. It's provided a simple way for buyers and sellers to keep each other honest or risk damaging their reputation permanently.

So when eBay recently announced that sellers can no longer leave negative or neutral feedback for buyers, it seemed as if they were just tossing away one of their most cherished principles.

Not only that, but eBay and PayPal have announced that they may hold payment for "questionable" transactions.

This has meant a lot of angry sellers.

eBay says the purpose of these changes to feedback is to prevent sellers from doing things that annoy buyers, because unhappy buyers means an unhappy eBay marketplace. Negative feedback drives dishonest buyers away. But it also drives away good buyers, and that's bad for business.

But without being able to leave negative feedback for the worst buyers (like scammers or non-paying bidders), how will sellers be able to deal with them? And if PayPal holds payment for items already shipped, how will sellers cover operating costs?

But before we get ahead of ourselves, let's take a look at what's really going on.

Your first look at a whole new feedback system

Everyone's talking about the two most earth-shaking changes:

  • Sellers can no longer leave negative or neutral feedback for buyers.

  • Negative feedback (plus other factors) may result in PayPal withholding payment to sellers.
But eBay also added some checks and balances so buyers aren't holding all the cards:

  • Members who are suspended or fail to respond to unpaid item reports will have their feedback removed, so feedback from bad buyers won't affect your reputation.

    Buyers must wait three days before leaving negative or neutral feedback for sellers with an established track record, which gives both sides time to communicate and cool down before leaving permanent feedback.

    Buyers and sellers can get up to one feedback per week from the same trading partner, so great sellers get the credit they deserve for having loyal repeat customers.

    Members have 60 days to leave feedback, instead of 90 days, which will reduce the impact of feedback extortion and other unacceptable practices and reduce the number of completed sales a seller has to watch.

  • A seller's positive feedback percentage will only reflect the past year instead of lifetime so no mistake has permanent consequences.
You can see eBay's summary of feedback changes here:

Those additional changes don't offer a lot of consolation, though.

Sellers still worry that not being able to leave negative feedback may make it harder to spot unreliable buyers. Buyers may also be more inclined to leave negative feedback because sellers have no way to retaliate.

And there are serious consequences for sellers who receive negative feedback:

  • In some cases, PayPal may order funds to be withheld Your listings may be suppressed in search results You can lose your PowerSeller status
  • You may end up paying higher fees
Let's look closer at these problems and the ways eBay has promised to deal with them.

How eBay is dealing with your most pressing concerns

The #1 seller concern is this: How can you protect yourself from, and warn other sellers about, bad bidders?

eBay has promised to overhaul the way it handles bad bidders.

Seller help systems, like filing Unpaid Item disputes and reporting buyers who try to cheat the system, are already in place, but sellers are apprehensive. These dispute processes have traditionally been very slow, and not terribly sympathetic to the seller.

eBay has said that it will deal with problem buyers more quickly and effectively under the new system. All those resources that eBay now uses to resolve feedback disputes will be redirected toward removing non-paying bidders and users who try to abuse the feedback system.

eBay has really started to encourage sellers to use the proper dispute mechanisms to report problem buyers. These are the ripoffs you can report:
  • Unpaid items. Buyers who bid on an item but never pay are one of the biggest headaches sellers have.

    Feedback extortion. When buyers threaten to leave negative feedback unless the seller cuts them a better deal or reduces the shipping charge, eBay will ban them on the first offense, if the seller provides enough evidence.

    Feedback abuse. Buyers who leave malicious or dishonest feedback to try to harm a seller's reputation should be reported. eBay may not ban them immediately, but putting it on their record opens them up to further action if this behavior continues.

  • Transaction interference. Sellers who have their bids cancelled and then bid again, or make any kind of bid designed to disrupt a seller's auction are breaking eBay policy.
If a buyer tries any of these tactics on you, or any violation of eBay policy, report it immediately to http://pages.ebay.com/securitycenter/reportproblem.html.

Will eBay and PayPal stop payment if I get negative feedback?

The biggest uproar has been over the announcement that eBay and PayPal may withhold payments from sellers who get negative feedback. Don't worry! Your payments WILL BE NOT HELD UP if you meet all the following requirements:

  1. You've been on eBay more than six months Your total Feedback score is more than 100
  2. Your Dissatisfied Buyer percentage is less than 5%
OR if you meet all the following requirements:

  1. Your combined Detailed Seller Rating is over 4.5
  2. You received more than 20 Detailed Seller Ratings in the last 12 months
You can read the complete FAQ list here.

The feedback you receive from buyers is still important: it affects where you appear in the search results, and what other eBayers think of you. Other eBayers can still read comments on your feedback page and check out your selling history.

If you're a PowerSeller, it can even affect your status.

However, some of the ways eBay used feedback scores to separate good sellers from bad ones have been replaced by Detailed Seller Ratings (DSRs).

(For more information on Detailed Seller Ratings, see the Feature article in this issue.)

How YOU can profit from these changes

Some sellers have chosen to spend their energy boycotting eBay, complaining in the forums, or planning their move to Amazon. But YOU need to be more forward-thinking and figure out how to maximize your profits under the new rules.

Shouting from your own personal soapbox may relieve some of your stress, but it's not an effective way to get your valid complaints heard.

eBay has already responded to criticism of its changes by modifying the rule about withholding funds, and they've admitted a mistake in their calculations and cut listing fees for sellers of books, DVDs, and CDs by almost half, so they're listening.

Sellers who feel that they've lost some measure of control over their transactions can still take advantage of eBay's Buyer Requirements tool to prevent bids from unqualified bidders.

The Buyer Requirements tool lets sellers prevents buyers from bidding on or buying their items if certain conditions haven't been met. The criteria are:

  • The buyer is registered in a country where seller doesn't ship The buyer has a recent Unpaid item strike The buyer does not have a PayPal account
  • The buyer has a negative feedback score (although this one won't be a problem for much longer...)
Find out more about the Buyer Requirements tool here:

While some sellers are planning to stop leaving feedback for buyers altogether - something many PowerSellers already do because of the sheer volume of transactions -- we don't recommend this.

Instead, use your feedback to respond as soon as your buyer pays. Leave positive feedback within 24 hours of receiving payment, thank them for their purchase, and let them know their item is in the mail. It's a great way to make them think better of you... and it'll encourage them to leave you better feedback in return!

If there's a problem, report it immediately and get the dispute process underway.

And finally, check to see if this change actually improves your feedback score!

Most sellers can look through their feedback and see that many of their negatives are from non-paying bidders who left negative feedback as a response to negative feedback from the seller. Actual negative experiences are rare for good sellers.

Look at your own negative feedback and find out how many you've left versus how many you've received. If you remove the ones that were retaliatory, as well as the ones from the NARUs ("not a registered user"), your feedback score could actually improve under the new system. Remember that for every complaint on the board, there are thousands of successful transactions. To make sure you keep your position as a top seller on eBay, keep doing the things that make your customers happy!
6. eBay changes got your head spinning? Check out the competition...

Some angry eBay sellers are threatening to take their business elsewhere because of the recent changes to fees and feedback. Bear in mind it could be easier said than done, especially if you're already well established on eBay.

But if you do want to move (or expand your market to other sites), what are the alternatives available and how do they compare?


How it works: Amazon is not an auction site -- all items must have a fixed price.

There are no listing fees, but Amazon takes a 6% - 15% commission of the selling price. There is also a variable closing fee and a $0.99 transaction fee... all of which can add up in the end, depending on the product you're selling and its price.

The commission percentage depends on the type of product being sold:

  • Automotive parts and accessories....12% Camera and photo............................8% Cell phones and accessories...........15% Computers.......................................6% Electronic items...............................8% Items in the Everything Else store....10% Musical instruments........................12% Watches........................................13%
  • All other product lines......................15%
Click here for more details on the variable closing fee.

The $0.99 transaction fee is waived for Pro Merchant Sellers, who can list an unlimited number of items. Pro sellers pay a monthly subscription fee of $39.99 (a promotional fee of $19.99 per month is currently offered for the first two months).

Amazon does not allow you to charge your own shipping prices. Instead, standard shipping charges are added to each order. These might not be enough to cover your actual shipping costs, so you need to factor this restriction into the price of your items.

Click here for full details of Amazon's standard shipping charges.

Types of payment accepted: Major credit cards, checks, money orders, travelers' checks, and Amazon Payments.


How it works: Bidtopia is an online auction site that tries to mimic a live auction. If any new bid is made in the final 60 seconds of an auction, the listing is extended for another minute.

You must apply to become a seller on Bidtopia. You'll need to demonstrate previous experience in online retail or auctions, and have a legitimate business location. Once you're accepted, you have to maintain a minimum "sell-through rate."

Bidtopia charges a one-time $100 account set-up fee and a final value fee of 2.75% for each sale. The site allows only $0.99 starting prices and no reserve prices.

Listings, thumbnail pictures, listing items in second categories, and delayed launches are all included. However, there's a $0.25 listing fee if your item receives no bids.

Bidtopia also allows you to use your account to promote and link to your own website.

Types of payment accepted: PayPal, major credit cards, money orders, and checks.


How it works: Bidville doesn't charge listing fees, but it does charge final success fees (FSF), which are calculated as a percentage of the final price when an item sells.

The FSF structure (except for vehicles and real estate) is:

Sale price

Final success fee
$0.01 - $25.00 5%
$25.01 - $1000.00 $1.25 + 2.5% of amount over $25.00
More than $1000.00 $25.63 + 1% of amount over $1000.00

You can find more details at: www.bidville.com/help/newfsf.html.

You can also pay a little extra to enhance your listings with these tools:


Bold Face Title $0.25
Highlight $0.25
Gift Center Icon $0.50
Category Feature $2.50
Homepage Feature $5.00
Banner $0.25
Photo Gallery $0.10

(Bidville is a consumer-to-consumer auction site owned by uBid. uBid is targeted at businesses liquidating excess stock.)

Types of payment accepted: Major credit cards, PayPal, money orders, and checks.


How it works: eBid is an online auction site. A basic seller account is free to set up and you won't be charged to list items -- but you will be charged a 3% final value fee when you sell an item.

You can upgrade to a Seller+ account to avoid paying any listing or final value fees. The cost of upgrading to a Seller+ account depends on the length of time you choose... from $1.99 for seven days, to $59.99 for one year. A Seller+ account also allows you to open five eBid "stores" for no extra cost.

For more detail on eBid's fees, visit: http://us.ebid.net/help_money.php.

Types of payment accepted: PayPal, Google Checkout, major credit cards, checks, PPPay.com.


How it works: eCrater is a free online marketplace and that allows you to set up your own "store." It does not charge any fees, although it offers premium product placements where sellers can pay to have their items listed in featured positions.

For a full list of the features offered, visit: www.ecrater.com/features.php.

All items listed on eCrater are also submitted to Google Product Search.

Types of payment accepted: Google Checkout, credit cards, PayPal, money orders and checks.


How it works: iOffer is a site for buyers and sellers to negotiate prices of items for sale.

iOffer charges a final value fee for each successful transaction. There are also premium enhancement services, such as featuring your item on iOffer's homepage and adding extra pictures.

For full details of these fees, visit: www.ioffer.com/info/fees_and_credit_policy.

iOffer also offers:

  • Free store No listing fees Free gallery slide show Free first photo
  • Free notices of buyer want ads
Types of payment accepted: Major credit cards, PayPal, checks, and money orders.


How it works: OnlineAuction is an auction site where sellers are charged a flat monthly or annual membership fee (depending on the type of membership).

  • Verified seller: $8/month Charter member: $96/year
  • Founding member: $196 for first year, $96/year thereafter
Click here for more details.

With OnlineAuction you get free, unlimited listings and you're not charged final value fees or relisting charges. The only fees (apart from the seller membership fee) are optional auction enhancement fees. Click here to find out more.

OnlineAuction is currently encouraging its users to make videos promoting the site and post them on YouTube. The video that gets the highest rating will win $5,000.

Types of payment accepted: PayPal, check, money order, Google Checkout, and credit cards.

Overstock Auctions

How it works: Overstock offers an auction service for people to sell items. It charges variable listings fees, reserve price fees, closing fees, and optional upgrade fees.

These fees vary depending on the type of item being sold, its starting price, and sale price. For full details, visit https://help.auctions.overstock.com and click on "Fees."

Types of payment accepted: O-Auctions Checkout, Google Checkout, PayPal, credit cards, personal checks, collect on delivery money orders, and cashier's checks.
7. Auction of the Month: Old school goes new school on eBay

"Vintage APPLE IIC computer NIB Sealed Never Opened II C"

That was the title of the eBay auction that sold in late January for $2,553.00.

A vintage Apple IIC computer, sealed, and New in Box -- a collector's dream, right?

Not if you're Dan Budiac -- the winner of this item. After he won this coveted collector's item, he opened it! (But he chronicled his experience on the photo sharing site www.flickr.com and his blog www.dansays.com and got a TON of publicity for it!)

So today we're going to look at two ways you can tap into eBay's massive traffic potential: by selling vintage collectors' items and by buying them!

a) Sell rare, collectible items on eBay

These days, you can buy -- and sell -- just about anything on eBay. But collectibles are still the heart and soul of eBay today. For the most part, you can use the same tried-and-true selling strategies to sell these vintages items as you can for most commodity items -- with a few differences.

Let's take a look at Store Seller Vintchip's core strategies for selling this rare item so you can adopt them for your own collectible items...

  • Include lots of photos, with close-ups of flaws. When you're selling collectibles, especially those that carry a higher price tag, including lots of photos is crucial. The value of collectibles is often defined by the item's condition -- so painting an accurate picture of the item condition is critical.

    Vintchip has this strategy down to a fine art. The auction listing includes lots of close-ups of the boxed computer from all angles -- including a corner that got damaged during storage.

    Tell potential bidders exactly why your item is rare and valuable. The auction listing copy leaves no doubt the item is truly a rare find:

    "To find a complete system unopened and never seeing human eyes before is unbelievable... I have never seen another unopened Apple II C system in my life, and this belongs in a museum as this is the only way to correctly portray how a new Apple system from the early years of computing would arrive."

    And you only have to look at Vintchip's 100% feedback to know he's been around the block and that he specializes in selling these items.

    Describes storage facilities that can affect value. Because the condition of collectibles can have a drastic effect on their value, describing storage conditions is a wise move. That way you can eliminate any surprises -- and potential negative feedback. Seller Vintchip explains in detail how the item was stored in less than stellar conditions, and while he does, reiterates just how valuable the item is:

    "I bought this system from a collector who said he bought this from the original owner who had just stored it and never got around to opening or using it. I have stored this system for years in a smoke free and safe place since. It does show some wear from shipping and storage, which was mostly from the original owner, who didn't understand what a rare item he was dealing with."

  • Establish your credibility with a solid feedback rating. With the new seller rating penalties being handed out these days, it's more important than ever to deliver exactly what you promise in your listing -- and deliver it fast!

    This is even truer when you're selling rare items. People need to be able to trust that the item you're offering is authentic... so they need to trust you. This will also ensure you item sells for the highest price possible.
You can check out the whole auction listing at:


b) Buy collectible items on eBay to capture massive exposure for your other ventures

eBayer dbudiac won this vintage auction -- with the unbelievable "unopened" and therefore museum-worthy collectible -- and proceeded to open it!

No doubt Seller Vintchip -- and collectors everywhere -- were gasping in horror. But for Dan, buying this vintage computer was a way of recapturing a piece of his childhood.

"Ultimately, I decided that I didn't buy it as a financial investment," Dan said in a recent interview. "I bought it so I could stay up until 4 o'clock in the morning playing Oregon Trail."

Giving the unwrapping the ceremony it deserved, Dan used social networking sites to share his experience with other childhood Apple IIC owners, including...

  • Posting photographs of himself opening the Apple IIC packages and posting photos on Flickr.

  • Posting about the experience -- including childhood memories -- on his blog, www.dansays.com. You can also see the personal letter he wrote to Steve Jobs to accompany his "warranty" registration letter.
Since he bought the Apple IIC in late January, Dan's chronicles have received:

  • 348,201 views of his photo journey

    4,490 Diggs

  • Links from 286 blogs, including Boing Boing, Boing Boing Gadgets, Telegraph, Laughing Squid, and Gizmodo
To the people who think it's absurd to spend this much on a twenty-year-old computer, Dan points out that it only cost him a penny per person for the 348,201 views of his photo journey.

See the "unveiling" that attracted so much attention yourself by visiting:


As we're fond of telling you, the best way to beef up your eBay profits is to funnel some of eBay's traffic to your off-eBay website, blog, and so on. Dan Budiac is a prime example of exactly how this can be done... and he got to relive a special childhood memory in the process.

8. Final thoughts

Whew. What a bruiser! But now you've got everything in one place.

I hope our February issue of Bidding Frenzy has answered all your questions about the latest round of eBay changes and given you some ideas on how you can improve your business and increase your sales.

Don't panic. You will STILL be able to make good money by taking advantage of eBay's incredible reach. But now, more than ever, you'll need to MARKET your items, not just list them and hope for the best.

Every month we'll keep sending you the latest strategies and tools to maximize your success on eBay... and wherever else you decide to sell!

Thanks for reading, and as always, I wish you success with your eBay business.

We love getting comments and questions from our readers, and we read every one! If you have any or would like to suggest topics for future issues, please email us at: ebaynewsletter@marketingtips.com

Happy auctions!

Derek Gehl, CEO
Internet Marketing Center

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