March 2008

1. Message from Derek Gehl

Welcome to the March issue of Bidding Frenzy.

eBay's been BUSY! Even after the wholesale changes they announced in January, they're still flinging new changes at us.

However, as the dust settles we're beginning to see the shape of the new eBay... and it's not that bad. In fact, for sellers who make sure their Detailed Seller Ratings are consistently high, conversions are up 10% to 20%! You can read more about the findings of a recent ChannelAdvisor survey that looked at the effects of the eBay changes.

Our Advanced eBay Mentoring Team has been right in the thick of things and they've come up with lots of new ways of doing things. Pay attention, because these strategies WILL give you the jump on the competition.

And, as usual, lots of news that will make you money, save you money, and make sure you're not losing money.

So let's get right into it...


2. Sellers making MORE money after eBay changes?
How can there possibly be anyone left on eBay?

There have been so many articles and forum posts in the past few months about sellers vowing to never set foot online again, you'd think it would be a ghost town.

The truth is that eBay has actually gotten better, and sales are proving it.

According to ChannelAdvisor, an independent eBay analysis firm, the new eBay changes are paying off for sellers.

In fact, a detailed analysis of changes in GMV (Gross Merchandise Volume), number of listings, and buyer activity led them to report that "the results have been very profound, measurable and positive."

A few highlights:

• Because it's less expensive to list items (and despite the boycott), the number of listings is up.
  
  
• Because Gallery is free for all listings, sales conversions are up for lower-priced items.
  
  
• Because of Best Match, overall conversions for sellers with good DSRs are way up — 10-20% in some cases!
  
  

As sellers start to see these results for themselves, they'll continue to list more items (because it's more profitable) and if the conversion rates hold, that will lead to even more overall growth in eBay activity and GMV.

Recent comments on our blog from sellers, like this one from Suzanne, are supporting these findings. She says:

"Before the fee changes, my average listing fees were $1.05 per item. Now, the listing fees are $0.65 per item. I'd much rather pay my fees with the customer's money (FVF) than take it out of my own pocket (listing fees). I feel more comfortable listing more auctions now since I will only be out about half as much if the item doesn't sell."

On top of that, eBay looks to be a better place for buyers. Under the old system, sellers calculated that the discount they'd receive for better DSRs didn't justify changing their shipping charges. However, now that sellers can lose sales due to poor shipping prices and ratings, sellers are actually looking for ways to ship cheaper.

Sellers are selling more and they're trying to save buyers money because it's more profitable in the long run.

Sounds like good news for everyone!


3. Our secrets to beating your competition in Best Match
Survey says... sellers who are willing to put in a little effort to learn the new rules are seeing better results. So you'll likely come out ahead of your less savvy competition if you implement a few changes of your own.

So, where to begin? Let's talk about the Best Match search criteria.

As of the beginning of March, the default for all item searches on eBay is now "Best Match" (it used to be "Time: Ending Soonest"). Buyers can change this default, but you can assume they most likely won't do that, so it's important to know what makes an item a Best Match.

eBay explains these search criteria:

• It sorts the listings based on Time Ending, Relevance, Seller Performance, and Shipping & Handling.
  
  
• "Relevance" is based, in part, on past successful buyer behavior for similar items (eBay notes what items are clicked on most by buyers when they run searches, and this means heading keywords will be extra important).
  
  
• Sellers with buyer dissatisfaction rates greater than 5% in the last 30 days will see their listings appear lower in search results.
  
  
• Sellers with the lowest Detailed Seller Ratings for Shipping & Handling Charges will also see a decrease in exposure.
  
  
• Sellers with Detailed Seller Ratings of 4.6 and above within the last 30 days will get higher ranking in search results.
  
  
• The time remaining on an auction is still taken into consideration, but it isn't the main criterion any longer.

This can obviously have a huge impact on your sales. In fact, sellers with a DSR or 4.6% or greater will now likely have up to 20% more exposure on their auction listings than their competitors.

Just check out this screen grab of a search for webkinz (they're popular on eBay right now) to see what we're talking about. We took this from page 6 of the search results...



Some sellers here only have a minute or two left, yet they're lumped in with the 2-hour auctions way back on page 6 where no one is going to find them.

We clicked on the profile for one of the poor-ranking sellers. This is a high-volume seller with a 99.1% positive feedback rating, but his average DSR is 4.4. Not so bad, you might think...



... But compare the page 6 seller to a seller who ranked at the top of the same eBay Best Match search, whose average DSRs and Negative feedback results are slightly higher...



Obviously a few fractions of a percentage point make a huge difference here! A difference, in fact, of being ranked at the top of the search... or back on page 6.

And it doesn't stop there. Shipping costs are now a really big deal on eBay as well -- and that doesn't just include buyer feedback on your turnaround time. Best Match will soon also take into consideration how the shipping cost for an item compares to other items in the same sub-category, and also whether the shipping price is specified.

Items with shipping costs significantly above the average cost for other items in the same sub-category may receive less exposure from now on.

So this is the Best Match default search in action.

But what can you do to make sure you're not shoved way out on page 6 with just minutes to spare on your auction?

Don't panic! We checked with our Advanced eBay Mentoring Team and they gave us some fantastic strategies you can use to propel your listings to the top of those searches. And since this is new territory for everyone, you can use this change as a great opportunity to get the jump on your competition.

Keywords are, as always, key

The keywords you use in your item listings are going to be more important from now on, so you need to make sure you're getting them right.

The good news is that you don't have to be psychic to figure out what keywords your buyers are searching for. Just do your own search for items you're thinking of selling and pay careful attention to the listings that are making it to the top.

For example, when we go back to the search, we found that "unused tags, new, webkinz, and rare" seemed to come up in all the top featured listings. Those are the keywords you would start with in this case.



Do your own searches to make sure you're getting your keywords correct, and include those words in your auction listings.

Test, test, test!

Here's a very handy tip... you can test how effective your keywords are!

Post your item, then make a note of where it ranks. Go in and change your heading... eBay will rank it again within just 5 minutes. Check to see if this improved your listing or not, and revise your heading again if you need to.

You can do this as many times as you like up until the last 12 hours of the auction.

Shipping secrets

Shipping is always going to be a bit of a tricky area to address... especially when you have to rely on your postal system to make sure your items are delivered in a timely fashion. There isn't much you can do about delays beyond your control, but you do need to remember that communication is the name of the game when it comes to shipping your goods.

Here are some top tips you can use to make sure your customer knows when to expect your items so they're not up in arms because their package is a few days late:

1. When you make a sale, leave positive feedback for your customer that also states your shipping times. You can say "Thanks for buying my product! You can expect to receive your item on April 17th," so the buyer has an exact date they can aim for. The more detailed information you can give them, the more likely you are to receive positive feedback yourself.
   
   
2. Be careful when you calculate your shipping times... add a day or two to your estimates to avoid disappointment. Then if it arrives earlier, you're golden!
   
   
3. Include details of your shipping costs on a sheet of paper in the package so the customer sees it when their package arrives. This way you can explain that, for example, although postage may only have cost $1.50, you charged $3.00 because you needed to buy bubble wrap ($0.75) and a post pack ($0.75) to make sure the item was delivered in good shape.
   
   Again, this gives your customer all the information they need to see you're being reasonable with your charges. You can even print these details on a bright pink sheet of paper if you think it will help attract their attention!
   
   
4. Ask for positive feedback from your customer! You can include a written note with your item, add it to the feedback you give to the buyer, or send a follow up email to them, but make sure you politely request that they give you positive feedback, or at least let you know what you can improve on if they're not happy.
   
   
5. Remember that your DSR is based on the last 30 days only, so you can work to improve it all the time!
   
   
6. Add a specific shipping service and price in the Shipping Details section of your listing, and making sure shipping costs are competitive with what buyers see in other auctions. And put your shipping information in the body of your item description too so there's less chance people will ignore it.
   
   
7. Check out eBay's Shipping Best Practices for more info... http://pages.ebay.com/sellercentral/shipping.html#best

4. Special offers on eBay now
1¢ insertion fees until the end of the month

Right now, and until March 31, eBay is running a 1-cent listing promotion.

If your DSRs are 4.5 or better (or you're a brand-new seller with no DSRs yet) and you use the Shipping Calculator or specify your shipping costs, all auctions with a starting price of less than a dollar can be listed for a penny.

This offer is a bit different from normal because these promotions usually only run for a day. A whole week of penny listing fees seems like a bonus!

There are two good reasons for eBay to do this. One is that this promotion will seriously increase the number of listings just before the March 31 cutoff date for Q1 financial results. The numbers already look better for eBay than they did last year, but this promotion could make them look really spectacular.

The other reason is to get sellers used to including the Shipping Calculator. This promotion is the "carrot" part of it... the "stick" is that sellers who DON'T use the Shipping Calculator will see their items increasingly disadvantaged as Best Match plays a bigger and bigger role in determining where your listings appear in search results. (See our Feature Article for more.)

Double discounts for UK sellers

Although eBay.com has trumpeted its new Final Value Fee (FVF) discounts for PowerSellers, the overall consensus has been that they're not enough and they're almost impossible to earn.

Just to get a 5% FVF discount, eBay.com PowerSellers need Detailed Seller Ratings of 4.6 or better across the board... and to earn 15% off, they need 4.8.

However, changes may be on the horizon.

eBay tested their whole DSR system at eBay UK before rolling it out at the main site, so it's worth paying attention to what's happening across the pond.

FVF discounts are already a little different in the UK. They apply to all sellers, not just PowerSellers, and everybody with Detailed Seller Ratings of 4.6 or better gets 20% off their Final Value Fees. The discount increases according to your PowerSeller status: 25% for Silver, 30% for Gold, 35% for Platinum, and 40% for Titanium.

But the big news is that right now, eBay.co.uk is offering DOUBLE the discount for all sellers with DSRs 4.6 or better -- that means UK sellers can get up to 80% off their Final Value Fees! Here's hoping the test is successful over there and they run it here next!

Find out more about the eBay UK promotion here: http://www2.ebay.com/aw/uk/200803201712572.html.


5. Classified information... Your eBooks can no longer be auctioned!
With Detailed Seller Ratings (DSRs) now pushing to the top of every seller's priority list, building a good feedback score is more important than ever.

Our favorite strategy for building feedback used to be selling information products like eBooks.

You could list an auction item with a starting price under $0.99 for free, then sell an eBook at no real cost to you. When you delivered it instantly via the Internet, your fast turnaround times could be used to build a good relationship with your customers and boost your feedback scores.

However, eBay seems to have cottoned onto this tactic and announced that, as of March 31, all goods that can be digitally downloaded or transferred electronically must be listed using the Classified Ads format.

eBay's Director of Global Feedback Policy, Brian Burke, explained the reason for the change in a news announcement on March 24, "Digital goods are often reproduced at little to no cost to the seller. On eBay, this creates the potential for Feedback Manipulation (both real and perceived)."

This basically means you'll still be able to sell your eBook on eBay, but now you'll have to list it as a classified ad, which costs $9.95/month. Classified ad transactions do not go through eBay, so your sales won't qualify for Feedback.

OK, so the bad news is pretty obvious.

You can't build good feedback ratings from the sale of easily deliverable eBooks. There's also the higher front-end cost of listing now (although you won't have to pay a Final Value Fee to eBay). And you won't be able to list the item in an auction format, just for a fixed price.

But there's also good news!

This change will likely discourage a lot of information product sellers, so your advertisement may end up getting greater exposure. The value of information products might even be driven up with fewer people flooding the eBay market with them!

Classified ads also allow you to drive traffic directly to your website, so they're a great way to encourage opt-ins.

And the classified ads will still show up on eBay listings, as well as on Google.

If you don't have an off-eBay website, this might be just be push you need to take the plunge and develop your own online presence.

We've developed a complete system that takes you through every step of building a sales website and includes all the tools, training and templates you need. It's called BeBiz, and we created it so absolute beginners could have a real online business up and running in literally a matter of days!

Meanwhile, if you want to continue to offer digital goods on eBay, you can do so by selecting the Everything Else > Information Products category in the Sell Your Item form and choosing the Classified Ads format (not auction-style or fixed price).

Just make sure you check in on other information product sellers frequently to keep an eye on how much other eBooks are selling for as time goes by!


6. Changes to eBay's affiliate program -- keep those commission checks comin'
If you're an eBay or Half.com affiliate, you're going to have to re-register. And you'll have one month to do it in. So don't wait for those commission checks to dry up. Put April 1 on your calendar. (No joke!)

(Since everything else on eBay is changing, why not clean house on their affiliate program too!)

Commission Junction has been a serviceable affiliate platform, but it just makes more sense for eBay to have total control over their affiliate program. They'll be able to tweak the system quickly and to implement new options instantly and globally.

If you're already registered as an eBay or Half.com affiliate with Commission Junction, just sign up for the eBay Partner Network on April 1 and put the new tracking codes into your affiliate links.

You've only got a month to do it, because starting May 1, eBay will stop paying old affiliate links!

(Tradera AB, ProStores, Inc, Reseller Marketplace, Media Marketplace, eBay Stores and StubHub affiliate programs will not be affected and will continue their relationship with Commission Junction.)

Nothing much will change on your end.

As with the old system, you'll be able to earn commissions for driving traffic to eBay -- even to your own listings! For example, if you have a website, you can include a widget that showcases your listings. Or if you keep a blog, you can put links on it to your eBay Store. Some sellers with off-eBay stores have even put eBay listings on them as a way to make a little extra money and offer more products to their customers.

If you haven't registered for the eBay affiliate program, it's worth it! the eBay Partner Network won't be releasing the details of the program until April 1, but under the old system, driving just one new person to register with eBay paid you $14... PLUS a percentage of eBay profits from that customer!


7. No more starting from scratch if eBay cancels your listing
From now on, if your listing is cancelled by eBay because of a policy violation, it will no longer just disappear into the void. Instead, the post will be transferred to your Unsold section, where you'll be able to modify it and repost without having to start all over again.

What a relief! There can't be more than a handful of eBay sellers who haven't had to waste time reposting from scratch because of an accidental violation, so this is welcome news.

If your listing is cancelled and you want to know why, check your My Messages inbox for a note explaining the reason. You can use that to make sure you don't make the same mistake twice.

A few policies are still excluded from this new system, including some banned items (like firearms, narcotics, etc.) and Verified Rights Owner (VeRO) violations for potentially counterfeit items.

But assuming you're not a gun runner, this is great news for sellers and a welcome change from eBay.


8. eBay category changes
eBay has made several changes to its listings categories recently -- and more are planned for the next few weeks.

These changes affect how sellers list and categorize items they're selling on eBay and how buyers search for items.

You'll see changes already in place if you're selling in any of these categories:

• Art
• Clothing, Shoes & Accessories
• Computers
• Sporting Goods
• Toys & Hobbies
  

Click here for full details.

The Home & Garden and Business & Industry categories will see changes made during March and April.

Click here for full details of these upcoming changes.


9. eBay Live! coming to the Windy City
If you live near Chicago -- or you've always wanted to go there -- think about attending the 3-day eBay Live! event being held on June 19 - 21.

The event is a fun, jam-packed affair where you can:

• Network with over 10,000 absolutely pumped eBay Community members
  
  
• Learn how to be more successful buying and selling on eBay at over 150 sessions taught by staff and other eBay experts
  
  
• Hear about the future of eBay at the Keynote Address given by John Donahoe, eBay President and CEO
  
  
• Have a ball at the Closing Gala, featuring world-class entertainment (there's no word on who yet, but in the past it's been acts like Kool and the Gang and Huey Lewis and the News)
  
  

eBay Live! also includes:

• A sourcing Pavilion hosted by ASD/AMD -- connect with sourcing companies and find the hottest deals at the lowest prices to help grow your business
  
  
• The eBay Live! Book Store -- relax with a good book on your favorite eBay topics, and maybe get it signed by the author!
  
  
• Networking Events -- so you can meet other eBay Community members at networking breaks, lunch and dinners
  
  
• Kids' Care -- where you can be sure your 3-17-year-olds will be having as much fun as you are; registration ends June 6.
  
  

Registration details and fees for eBay Live are as follows:

March 14-April 30: $75
May 1-May 31: $100
June 1-June 21: $120
Saturday Only: $ 75

For more information go to www.ebay.com/ebaylive.


10. Auction of the Month: The flakiest eBay auction ever!
Once in a while someone hits on an idea that captures buyers' imaginations on eBay. We've seen some wacky stuff put up for auction in the past, but we're pretty sure this is the only time a cornflake -- frosted or otherwise -- fetched over a grand!

So what made this particular cornflake so special? It was in the shape of Illinois, of course!



Fifteen-year-old Emily McIntire was the first to spot the uncanny resemblance of the Frosted Flake she was about to eat with the great state of Illinois.

She and her older sister, Melissa, saw an eBay opportunity and posted the listing shortly afterwards. After a bit of a slow start, the auction started attracting media attention when bids reached $50. That sparked a bidding frenzy that pushed the amount up over $200,000!

As often happens in novelty auctions like this, however, many of the bids were from fraudulent buyers. Emily and Melissa had suspected this might happen. They wanted to make sure fraudulent bidders were excluded, so they limited bids to buyers with a minimum feedback rating of 10.

But then eBay stepped in and removed the listing for a violation of their food policy (you're not allowed to sell unpackaged food).

When the girls relisted their cornflake, they actually auctioned off a coupon that could be redeemed for the cereal piece, rather than the flake itself. They also specified that the flake was not edible, which ensured the auction didn't contravene eBay policy.

They later added this disclaimer to their second auction as well:

"Due to the huge popularity and interest in our auction, we have had some concerns about the authenticity of some of the bids placed in the past. To hopefully ensure this auction has a happy ending, we need to ask all future bidders to pre-qualify before placing bids.

"To do this click on the 'Email the seller' link and send us a message with your name and number, along with a brief description of your interest in bidding in our auction."

The flake, which the girls billed as being "a must have item for any Illinois lover, collector of food look-alikes and anyone who desires a unique conversation item," eventually went for $1,350. It was bought by the owner of a trivia website, who intends to display it in a traveling museum featuring pop culture and Americana items.



So how can you make sure your auctions proceed without a hitch? Well, once you have a high profile auction up and running, you'll definitely need to keep a wary eye on false bidders!

There are steps you can take to give yourself greater protection in this area:

1. Use the Sellers Preference link when you post your item. It allows you to set who can make bids based on various criteria, including country of origin and bidding history.
   
   
2. Keep an eye on strange bidding activity... for instance, in the initial cornflake bidding there were sudden jumps of thousands of dollars, and bids that doubled the previous amounts. Also look out for buyers with no feedback or those who are overbidding. No doubt the McIntire sisters were wary of the following bidder for just this reason...
   
   
   
   Bidders with no feedback may be genuine, of course, but it's worth contacting them if you feel they intend to rip you off. You can block individual bidders if you are not satisfied they will follow through with their payment at the end of the auction.
   
   
3. Be clear about your bidding policy in your posting. You can state from the outset that you reserve the right to cancel bids to protect your auctions and invite anyone who is really keen for your item to email you if they have low feedback scores, as Emily and Melissa did with their post...
   
   
   
   
4. If you think you've found a fraudulent bidder, report them to eBay!

So, with this in mind, keep your eyes open for that great opportunity to grab the attention of the bidding community. Your next thousand dollars could come from anywhere... including your cereal bowl!

As for the McIntire sisters, they're going to spend their flake money on a family trip to Hershey Park (they didn't make quite enough to get them to Disneyland).


11. Final thoughts
You gotta love eBay (even if they drive you crazy sometimes). Where else can you pay for a vacation by selling a Frosted Flake?

Of course if you're a real seller -- or intend to become one -- you know that auctions like that are one in a million. To make a business of selling on eBay, you have to make your listings stand out and make your buyers happy. Do those two things consistently and you'll find eBay success.

And with all the recent changes it's even easier to stand out from the competition... especially with a little help from our eBay experts.They're in the thick of things, testing, experimenting, and constantly selling. They know this marketplace inside out, so for every change eBay makes, they come up with a way to make it work for sellers.

We'll keep bringing you the latest from our eBay team every month.

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



Derek Gehl, CEO
Internet Marketing Center

P.S. 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