Initial seller reaction to eBay changes

Ok we were just on a 30 min break and the buzz was definitely very positive around the PayPal seller protection improvements. The elimination of limits, confirmed addresses and international expansion are a big win for sellers.

The negative buzz is around the fee changes. Many feel calling it a decrease isn't really the case. Let's dig into this.

I have talked about three general buckets of eBay sellers. Here they are again for reference:

    * The media seller - Typically sells in core+store, high conversion items with < $25 ASP in core, low conversions in stores.
    * The auction traditionalist - These folks are 100% auction, with low starting prices and high conversions. They have near 100% conversion rates and tend to have higher ASPs because they sell collectibles. Exceptions would be jayandmarie who auction CDs
    * The fixed-price seller - These sellers sit in-between the media (low ASP, low conversion) and auction traditionalist (high ASP, high conversion) and have average ASP and conversion ( $50+, 50% conversion rate).

Media seller reaction:

    * To most this feels like a fee increase. Some have quantified it as a 10% and I've seen math that shows as high as 25%.
    * The challenge media sellers face is that they already tend to have low DSRs on S+H so they don't get the PS benefit.
    * These sellers typically put that extra fee into S+H, or item cost, but now they feel boxed in by DSRs, so they aren't seeing a way to adjust to the fee change.
    * It's important to note that most of these sellers don't factor gallery into their equations (you could argue if that's correct or not, but they would argue they don't by it now, so by having it free, it does not save them $). The reason these sellers don't have gallery is they have found that gallery historically doesn't help increase conversions on these low ASP items. Now that they get it free, if it does help conversions, it will help mitigate this fee increase.

Editorial note: I did notice that in the UK, eBay announced media category pricing. Maybe this is a way eBay could address this should it be a widespread problem.

Auction traditionalist

The auction traditionalist seem to be falling into two buckets:

    * The people that love auction and want to stay with it are facing a fee increase no matter how you slice it. The high-conversion (associated with a low starting price) kills you in a lower insertion, higher FVF world.
    * The people that are going to switch to fixed-price from auction because the fees are pushing them in that direction.

Fixed price seller:

    * The fixed price seller is going to get the bulk of the benefit in these changes. The lower insertion fees help them with their lower (50%ish) conversion and they tend to pay for gallery, so they are getting somewhat of a double whammy. Many of these sellers also can pretty easily get their DSRs to the 5% discount level and maybe with some work get to 15%.
    * The biggest concern here is around DSRs, especially international buyers. There's a trend where large sellers with material 15%+ international buyers tend to take a .2-.5 DSR hit. Those sellers are going to have to figure out how to balance the value of intl buyers [$$] vs. the downside (DSR hit and thus risk on the powerseller programs). We've actually seen sellers start to split their seller IDs into two IDs - one US only (high DSR) and one international only (low DSR).

The next topic of concern is definitely the changes to feedback. The doomsday scenario I've heard is that buyers will now have all the power on the site and hold sellers hostage for positive feedbacks/DSRs. More on this later as eBay expands on the changes and it settles in.

Seller panel
There are four sellers moderated by Matt Ledwith. I know two - Jon@Grapevinehill [GVH] and Sarah@fashionphile [FP]. I'll call the other two guys seller1 and seller2.

Q: What do you think about today's [Tuesday's] announcements:
S1 - generally happy
GVH - feedback, not sure if negative or positive
S2 - feedback is very concerning.
FP - I got hit with fee increase and VERY concerned about the power the new feedback rules put in the hands of buyers.

Q: Moviegoods.com - I've cut store listings with 30k store items
A: GVH - we use store listings as an added chance at selling something.

Q: This is for GVH, you guys are 4.6/4.7 on DSRs, can you get your DSR up?
A: GVH - no, I don't think we'll get to 4.8, feels like free ship required.

Q: Is there a better time shoeA sells better than shoeB?
A: GVH: evenings are the best, some day time activity.

Q: (from MattL) Do you publish your shipping and handling policies?
A: Free shipping gets 4.8/4.9

****Ah, Seller1 is Michael@gainesville coins [GC] and Seller2 is Stephen@ Thrilling Audio [TA]

(Audience getting kind of worked up over shipping+handling DSRs, lots of rumbling and agitating).

Sellers at mic:
Q: I have a 4.8 on shipping and have free insurance and shipping.
(nxt) Q: There's no way we should be accountable or have to explain what we charge for shipping!

Q: Debbie@snappy - we found when people leave feedback they don't remember, so the closer to feedback time you can touch them, the better. You can try to put something in the box that says 'we take great care to package everything,' etc.
A: TA - we do do that and send the fees with the feedback request email.

Q: How do you nudge people to your website?
A: GC - websites are expensive
GVH - we prefer website sales.

Q: How do you drive sales to your website?
How do you look at multi-channel?

GVH: Let customers know.
TA - we use google adwords and flyers
FP - we have tons of content on our website

Q: DSR Shipping question - some guy said in the last presentation said that his international feedback DSRs were lower. How did he know?
A: ML - Bill told me that international is lower than US, we shared it with him. We are looking into how we can get more info on feedback.

ML - think about these as starting points.

General Q&A Session

Day Two general session that is Q+A about the changes announced Tuesday am. On stage we have CEO John Donahue, Cobb (retiring), Rajiv (new eBay leader) , Scott (new PayPal leader) and Lorrie Norrington (fills in for Bill).

Q: With the FVF on the < $25 tier increasing to 8.25%, will lots of items leave the site?
A: The intent is to listen to you and decrease insertion fees so you have more back-end fees vs. front-end.

Q: What are you doing to bring more buyers?
A: Lorrie: we want to really retain buyers, how do we in get them to do more (mentioned couponing).

Q: Raise your hands if you hit 4.8
A: About 10-20 hands went up.
Follow-up: You missed the number.
Q: 66% of PS'ers have 4.6 or above 15% of PS'ers have 4.8 on all DSRs
F: We have members that offer free shipping, but have 4.7 DSR on S+H
A: Sellers that get 4.8 and above are being very clear in their listings, vs. offering free S+H

Q: If I have free shipping, why wouldn't eBay put in an auto 5.0 for me on S+H DSR?
A: (Stephanie T) We are listening and looking at that.

Q: (emovieposter) I'm a .99 no reserve seller, I have 100% feedback, I have 10x feedback repeat business. I'm seeing a big increase in fees from these changes. The other .99 sellers, jayandmarie/hessfine are going up as well.
A: We like how you sell on eBay and want you on the site. (Rajiv echoed)

Q: simon sunshine electronics - Thanks for the changes. I understand that if we take care of the customer, you'll help us. International customers are killing us on DSRs. Did you consider handicapping DSRs for intl sales?
A: LN - This goes back to expectation setting. Those that are setting expectations clearly are able to move their DSRs up. If we learn from data that we have an unfair penalty for cross-border-trade that would be great.

Q:Izzy 9000 positive fb. As seller, where is the trust? Person wins, does UPI, buyer responds 'who cares', leaves seller a negative. Seller out FVF and gets a neg/dsr hit
A: LN - If you report a buyer, we'll take care of nuking the neg and comments