There was a collective sigh of relief around the office when we heard this one: eBay have announced that UK sellers will be given a whole months grace period if they are found to be on the wrong side of eBays seller non-performance policy.

Basically what this means if you are a seller found in breach of policy you will be given 1 month to get your house in order.

Whats really signifiicant about this move is the scenario of “1 negative feedback got me thrown off eBay” should never occur because after 30 days the neg will no longer be included in the feedback and DSR and thus drop out of the calculation.

Surely everyone thinks this is great news? Opinions please

In order to run a healthy eBay Business you need to know your eBay Vitals.

In this post I’ll be covering what we refer to as an eBay Close Rate. Understanding this information, and applying it to your eBay Business will help you to achieve your optimum closing rates. Ensuring you are maximising sales whilst minimising the cost of sale (that did sound like a sales pitch, don’t be put off - it wasn’t!).

What is a Close Rate?

A close rate is the percentage of successful listings against the total volume of listings. This can be measured account wide and on an individual item basis. ie., If you successfully sell 9 out of 10 listings for an item on eBay, that equates to a 90% eBay close rate for that listing.

It’s best to have an overall account close rate AND individual item close rates. (When selling a small breadth of product, it’s very easy for 1 or 2 bad performing items to bring your overall account close rate down dramatically, resulting in higher fees and less margin. You should build a process that not only identifies these items, but also actions them to prevent/limit damage to your margin.

Is that it, is it that easy?

Each time I mention this strategy, the immediate response is normally along the lines of “Ok, so I need to have 100% close rate for all my items then?” - While this may seem great, this isn’t normally a good move. Yes, this would insure you had a good close rate, and your fees as a % of cost of sale would be healthy [providing you have common sense pricing strategy], but this also indicates you are limiting your growth, as either you are selling too cheaply, or there is more demand for your product - or both.

Logically, you would need to work out, based on your costs, is it more effective to increase your listing velocity or increase your selling price. Most clients I work with have an optimum item close rate of between 50-60%. You should be able to work out what your optimum close rate is based on the following factors:

• The cost of selling your item.
• The margin made when selling your item.
• The cost of not selling your item.

Once you have that data, you should be able to work how many times you can unsuccessfully list an item against the margin made when you successfully sell an item. Using this data, I would strongly recommend applying this close rate method to all inventory in your account. Working with historical data, you will now be able to isolate these items, and build a procedure to action them as you see fit.

A basic example:

item selling price = £29.95
Item Cost Price = £20.00

EBAY FEES
insertion fee = £0.50
gallery fee = £0.15
final value fee = £2.25

PAYPAL FEES
3.4% PayPal transaction fee = £1.02
PayPal fixed fee = £0.20

Total Fees = £4.12

If successful = £5.83
If unsuccessful = -£0.60

Based on the above assumed pricing details, we can assume that if we sell this item once, we make £5.83 profit. We can also see that if we list this item using the same strategy a total of 9 times, our fees will amount to £5.85. So, for every item we sell, we cover the fees for 9 unsuccessful listings. At this point, work out what percentage margin you would like to make on your item, and how many times you unsuccessfully list the item before eating into your margin.

This close rate ratio will give you your maximum listing volume to achieve the margin you want to achieve. This will enable you increase your listing volume to meet demand, or even decrease your listing volume to decrease your fees-to-sale percentage.

Ok, so what’s next?

Obviously what you do from that point is up to you, but I would suggest a regular ‘health check’ on each item (the frequency depends on your volume of course), and be sure to build a process that will action these items and deal with them how you see fit.

A lot of the details above are assumed, so take them with a pinch of salt. Hopefully this will help to show that there is a simple equation to calculate optimum performance.

I just want to emphasis once more that identifying this data is only the first step to improving your eBay vitals, as without a process that actions your results, this is a wasted process and nothing will change. I say this as I’ve worked with hundreds of eBay businesses and only a tiny percentage of my clients actually used this information - most of which saw results the following month.

Ok, so working in the Managed Service department at Frooition has proven to be a challenge over the last few months. Most of my clients are really trying to ramp up business early 2008 (like every other business that wants to succeed), which means more communication, new supply and more inventory. As any eBay seller knows, this creates quite a work flow for the team that actually needs to transfer all this excitement onto eBay and generate more sales.

With my work cut out, I’ve been steadily improving strategies on a daily basis for each account, and tweaking every item where necessary to improve sales. Normally the steps to improve an eBay business are relatively basic:

1. Improve Creative Branding.
2. Improve Inventory Information (item specifics, attributes and formatting all need to be clear and concise).
3. Devise / Improve listing strategies for each product group & format, based on Frooition marketplace research.
4. Streamline procedures (sales processing / status updates, etc).

However, with one account in particular, being TopUpTV (for which I actually run two separate eBay identities), the process has had to be modified due to the fact I only have 1 item to sell for each account. The process outline is much the same, but relying on eBay’s natural ability to display and expose your inventory (in the form of search results, feeds, eBay Shop pages, etc) is very difficult when you only have 1 item to sell.

Challenges:

1. Inventory breadth - Selling only a single item (with unlimited quantity).
2. Generating exposure / traffic.
3. Competing / dominating your main eBay category.

In light of the above challenges, you may be surprised to learn that this account is now the biggest seller in their category, with both TopUpTV & The_DTR_Store holding 1st and 2nd place as top sellers on eBay based on GMS (Growth Merchandise Sales) in their category. Based on my research, These two accounts are also the most healthy eBay businesses in the top 5 sellers for their category too.

In order to run a healthy eBay Business you need to know your eBay Vitals.

• What are your Close Rates (see my “Identifying and Optimising your eBay Close Rate” post)
• Low Fees
• Competitive pricing
• Good Sales Volume / GMS

In short, keeping close rates at their optimum levels, fees as a low % of selling price, have competitive pricing, and maintaining a good volume of sales, will ensure your eBay business is off to a good start.

Incase you haven’t already picked up on this, eBay are shortly set to Close eBay Express in the UK (www.ebayexpress.co.uk), and shift their main focus back onto the core site eBay.co.uk.

Based on feedback from our buyers and sellers, we’ve taken the decision to close eBay Express in the UK (www.ebayexpress.co.uk), and focus our efforts on the main eBay.co.uk site.

Many of the innovations pioneered on eBay Express have been integrated into the main site, helping us bring more buyers to our sellers and providing buyers with a better experience.

eBay Express sellers have always been required to offer excellent levels of customer service. Recent changes on the main eBay.co.uk website mean sellers with a great track record should now enjoy better visibility and traffic.

eBay struggled getting traffic to eBay Express since they first opened their doors back in early 2006. Many of my clients, whose accounts I helped to run on a daily basis, were very exited when this news first came about, but unfortunately implementing this feature into each account resulting in zero sales for a majority of clients.

I’m sure most will agree this is a positive move. eBay Express may have failed in gaining traffic > delivering paid orders, but it has played a large part in rolling out new developments and functionality - A lot of which we can now see on the main eBay site.

If you’d like to read more on this, eBay have a page dedicated to it right here: eBay’s Business Hub

So, once again Royal Mail are adjusting their rates, raising prices to:

• A First Class stamp for a standard packet weighing 101g to 250g will cost £1.45, an increase of 7p.
• A Second Class stamp for a standard packet weighing 101g to 250g will cost £1.24, an increase of 4p
• Special Delivery guaranteed next day service for items weighing between 100g and 500g will cost £5.05, a rise of 30p.

Increases aren’t exactly suprising, after all, Royal Mail like all other businesses need to adapt with inflation, but I am pleased to see some good pricing incentives put in place for large volume traders….

This plays hand-in-hand in conjunction with eBay’s latest updates on Detailed Seller Ratings (DSRs). As a business seller on eBay, you have to be competative in various areas in order to survive. Sellers from every corner of the globe had clocked onto this and decide to almost ‘cheat’ buyers (and of course the marketplace software providers like eBay & ChannelAdvisor for example), by charging very low item prices, with extortionate P&P charges.

A prime example would be an item with say an RRP of £12, a BIN price of 0.95p, and a P&P price of £9.95 for Royal Mail Shipping.

This selling strategy saves on listing fees and order processing fees for various service providers (which means a happy seller), but most buyers frown on this activity and believe it is a dishonest way to trade. A high percentage of these items result in UPI disputes, as buyers simply don’t see the postage cost until after they have purchased, leaving the seller without payment, and the prospect of angry buyers just waiting to leave negative feedback.

Sellers who do exploit this loop-hole, will now begin to be punished for their actions, by having their listings blessed with “reduced search visibility”, and as a result reduced sales, reduced success, and - eBay hope - an increasingly buyer-happy marketplace.

You can find more information on Postal Prices here: Royal Mail Website
You can fond more information on eBays DSR updates here: eBay Announcement on DSR

Announced on Friday, eBay have taken the decision to allow ‘guest’ buying on eBay. This will mean lots more potential buyers for the festive season!

The ‘Guest’ buying feature will cut down the process of buying on eBay to a minimum, driving eBay even closer to an e-commerce store feel. This new feature will accommodate the occasional or just seasonal buyer without the hassle of feedback and registering on the site. Guest buyers will be encouraged to sign up to the eBay platform once they have purchased but it won’t be mandatory.

Guest buying will only apply to fixed price and store inventory items. The purchase must be completed immediately, as not to leave sellers with lots of reserved items and no payment! To protect sellers, guest buyers can not leave feedback unless they register on the platform. (which I guess is the general idea)

This feature should have been the bridge between the eBay marketplace and eBay Express. All in all, this feature might make eBay express completely redundant as the spontaneity of the purchase is there without all the fuss.

Tamebay reported on the equivalent feature release in the states.

eBay has been a victim of phishing emails since the conception of the idea I bet! With hundreds of new users flooding to eBay all the time, phishing emails have become a common occurrence. In my personal inbox I get at least 3 or 4 eBay phishing emails a day, which are getting ever more convincing.

eBay have worked hard to beat the ‘phishers’ by trying to educate its members. They even have a tutorial on how to spot a spoof emails and the eBay toolbar is a must for eBay users.

Symantec have been following the scam of Trojan.Bayrob - Buying a Fake Jeep

In order to attract potential victims the scammers first list cars for sale on various auction sites. These auctions are not scams per se, but they are “legit” auctions that are used solely to attract potential victims—whoever asks a question or bids on these auctions becomes a potential victim. Once these auctions have expired the scammers get to work emailing each potential victim. These emails explain that the winner of the original auction was unable to pay, so the car has been re-listed on the auction.

Once the email is opened the trojan is silently dropped and executed on the victims computer. The scammers do not pursue the victim until the trojan has confirmed a proper installation on the machine and is working properly. Once the location of the victim is confirmed, and they are too far away from the vehicle to visit, a second email is sent.

Not only does the Trojan show a fake auction, it is also able to show fake feedback for the alleged seller too. When viewed from the infected machine the feedback page for the auction user

The infected machine then mirrors the entire auction process from start to finish to complete the fake sale.

With ever growing sophisticated criminals behind such scams, users and business owners need to be extra vigilant. Always use the eBay portal to conduct your eBay trading.

Some eBay sellers do use legitimate third party checkouts for their eBay business. This should be mentioned on the listing or at eBay checkout if they want the buyer to have confidence. You can also ask eBay or do your own research before you pay. You should only checkout if the seller is using an approved third party eBay tool as listed in the Solutions Directory. You will usually see a small logo at the bottom of the listing if a seller is using such a tool.