eBay Brown Bag lunch on Store fees
28 August 2006eBay held a brown bag lunch on the recent eBay store fee increases. Trading assistant Bob Willey was there to ask some questions and was kind enough to share the questions and answers with the eBay establishings group. Below are the questions and the answers directly from Chris Tsakalakis, Vice President of Advanced Solutions with eBay.
“What is the actual status of eBay STORES (from eBay’s perspective)??
It “appears” that you want stores to go away.
You have eliminated stores in searches.
You have increased fees drastically.
You have now done away with eBay KeyWords, making an eBay Featured Store no longer a good value (I downgraded mine today)
You have put in eBay Express
Have now added core listing (auction) BIN’s to ExpressThis and other things going on, gives the appearance that you are either doing away with Stores or are phasing them out, or diminishing them?
So WHAT IS THE PLAN???
It was very sneaky to not announce these major changes at eBay LIVE so wecould have talked to people in person.”
[Reply from eBay begins:]
Thanks for your message. I have quite a few thoughts related to your questions. I will start answering by saying what I have said many times before. I can tell you after having run eBay Stores for over 3 years that the status of eBay Stores is a growing and thriving business with a highly engaged and active customer base of some of eBay’s best and biggest sellers.
eBay Stores remains the #1 online storefront solution in the US and worldwide by a factor of 5 to 1. The eBay Stores team has worked very hard to make that happen and we are not giving up on that.I think your real question, however, is what is the status of Store Inventory. I want to clarify that an eBay Store is a lot more than just access to the Store Inventory format. It’s a permanent place on eBay and the Web where you can create your brand and online identity and where your buyers can come back to time and time again. Your eBay Store displays ALL of your eBay listings, including but not limited to Store Inventory listings.
We know that, on average, eBay Store sellers have always and continue to have most of their sales come from auction style and fixed price listings rather than Store Inventory. If this is not true for you, I respect that, but it is true for eBay Store sellers as a whole.If the only reason you have an eBay Store is to have access to the Store Inventory format and you cannot make the new Store Inventory format pricing work for you, I would not blame you for closing your eBay Store. If, however, you benefit from the other features of an eBay Store, I would ask
you to consider that we have and continue to invest in eBay Stores as an easy to use and powerful online storefront.Having said that, let me take on each of your questions individually:
*It “appears” that you want stores to go away.*
Not at all. What we want is for some slow moving or non-selling Store Inventory listings - not eBay Stores - to leave eBay.com. It costs more for us to host non selling Store Inventory listings than the revenue we get from
them. This doesn’t mean we want all Store Inventory listings off of the site, just the non-productive one.*You have eliminated stores in searches.*
Not really. Earlier this year, we included all Store Inventory listings in search results for a period of just over 7 weeks. When we saw that this was changing buyer behavior in a way we did not like, we changed search to the way it had been since June of 2005 where a link to matching Store Inventory
listings appear in every search result and up to 30 matching Store Inventory listings appear in search results if there are 30 or less matching core format listings. In January of 2005, up to 10 matching Store Inventory listings appeared in search results if there were 10 or less matching core format listings. Days ago, we increased the exposure of Store Inventory
listings so that all of them appear in search results if a buyer selects the “Buy It Now” tab.To summarize, compared to when we last set pricing for Store Inventory in February of 2005, we have increased exposure of Store Inventory listings in search.
*You have increased fees drastically.*
If you feel the fee increase is drastic, I respect and appreciate your point of view. However, when we looked at the effect of the price change on all eBay Store sellers, we found that the Store Inventory price change would increase total eBay fees eBay Store sellers pay by 6%. I know that the effect on many of you is much greater than 6% and that the 6% number is
hugely controversial with the eBay Stores discussion board community, but I can assure you that this is a real number. The reason it is real is that the majority of eBay sales generated by the total group of eBay Store sellers
comes from auction style and fixed price listings rather than Store Inventory listings, as I mentioned above.*You have now done away with eBay KeyWords, making an eBay Featured Store no longer a good value (I downgraded mine today)*
The elimination of the eBay keywords program is unfortunate but it was not in any way done with an intention to hurt eBay Store sellers.
*
You have put in eBay Express. Have now added core listing (auction) BIN’s to Express*
Despite the addition of Auction BIN listings to eBay Express, Store Inventory listings still appear in all eBay Express search results and Store Inventory listings far outnumber auction style and fixed price listings.
eBay Express is one more way that we have increased the exposure of Store Inventory listings since February of 2005, the last time Store Inventory fees were changed.*So WHAT IS THE PLAN???*
The plan is to continue to invest in eBay Stores to make them easier to use and to create more features that help eBay sellers increase their sales.*It was very sneaky to not announce these major changes at eBay LIVE so we could have talked to people in person.*
I appreciate your point of view on the timing of the price change announcement, but I can tell you we had not finalized our price change plans at the time of eBay Live in mid June and would not have been able to announce them then. We made the price change announcement a month after eBay
Live on July 19th.Thanks again for your questions.
<http://stores.ebay.com/>
*Chris Tsakalakis*
Vice President, Advanced Solutions
Pretty interesting answers from eBay really. Kind of dodges the big questions and vaguely answers the rest. Basically it boils down to the profit margin on stores was too low and as a result, the fees were increased to a)reduce overhead from less inventory in stores and b)increase revenue from remaining inventory. That’s the way I read it anyways. Some interpret that to mean that they don’t want stores around anymore, which I don’t think is true. I think they just want to try and curb the habits of many of us to put items that aren’t auction sellers into the store and pay the minimal fees to keep it there until it sells. Honestly, even with the new fees, a majority of the sellers will continue to do this. So it just might work out for the best of eBay.
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