Ebay FAV Double Discounts on Oct 14th – How much can you save?

There’s one thing ebay rules are changing for the better these days. Companies who give great customer service, have great DSR stars and have above average feedback scores will be greatly rewarded with discounts coming in mid October 2008. What does this mean for those who qualify? HUGE discounts (double) in FAV fees that can help your bottom line!

First of all, for those who are so upset with the policy changes this year should really reconsider their operations. Many are saying that reaching 15%-20% off is close to impossible and I was one of them. We are in a cut throat category with lots of competition dealing with used, refurbished and new electronics. Things happen with electronics and you can even experience a 5% defect rate buying directly from manufactures with brand new items.  Currently we qualify for 15% off and our DSR stars are rising to where 20% off is not an impossible reality.

Starting October 14th, Ebay will give double your FAV discount located in your seller dashboard for those who offer free shipping on their items. For those with 5%-%20, this can mean hundreds if not thousands of dollars in savings per month off your bill.

Example: Previous to ebays fee structure change, we were spending $2.50 to list a single item that was $39.99 with some listing upgrades and paying $3.80 for each item that sold totaling $6.30 per item that sold. Now ebay has given us a free gallery image and a free subtitle (with free shipping) reducing this cost by about $.75 cents.

Now, the FAV fee without any discounts is $6.60! That’s a HUGE increase from $3.80. But take into consideration that the insertion fee is now only 35 cents, reducing the front end fee by $2.15 cents per item. With a 15% discount, doubling this so 30% because we offer free shipping on the item, we will only pay $4.62 cents per successful listing saving $1.68 per item from their fee structure before the increase and discounts were announced. Times this by 10 per day and 30 days per month, this one specific line item will save us $504 per month. Now times this by your top 10 line items and you’re sure to save thousands a month, only paying for successful auction with the ebays new successful based pricing tiers.

My take on Ebay’s move: It’s very simple. They want to separate GREAT sellers from average and below average sellers. The thing is, even those who “boycot” ebay or are leaving really make little to no impact on ebays bottom line in most categories.

Example: We monitored a close competitor that was selling the same item as we were. His feedback was 98.2% and was obviously paying squaretrade $10 per negative feedback to be removed. When ebay made the feedback changes, he dropped below 98% (went down to 97.2%) and lost his powerseller status and 2 months later was NARU. (No Longer a Registered User). Does ebay miss his sales? Not really, our sales almost doubled on this item because the buyers were still there! The new rules simply made it harder for someone who did not take care of their customers shut down and threw the sales to someone who did resulting in nearly identical sales being purchased, just spread across fewer sellers.

Also, because the sales are shifting towards a company who offers customer support, longer warranty periods, faster shipping and a great product etc …the buyer will be more likely to revisit ebay because of the buying experience that they had, and hopefully be a return customer of the seller who offered them a prestine buying experience.

Conclusion: It will probably take several months into 09′, but ebay is moving towards Amazonification where just not everyone is allowed to sell on ebay. Those top merchants will be rewarded with search standard exposure rates in the core, double discounts in fees and repeat/more buyers for those with the total buying experience. When someone gets ripped off or even encounters a simple error in their buying experience they hold ebay accountable not the seller. They flock off the ebay to buy elsewhere resulting in less sales potential for legit sellers and then no one gets the sale.

Tip: Take care of your customers. Phone support, email support, clearly stating your return policy and abide  by it 100% if there’s a problem. Get your DSR stars, feedback etc up NOW because those who have done this even before the changes are reaping the benefits in success ratios and increases in sales.

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3 comments

  1. Gary

    I just read in my messages folder that Ebay is now going to stop anyone from accepting a money order or check from buyers at the end of October! The only accepted form of payment must be electronic, like PayPal, Propay or through a merchant’s credit card system! This is just a blatant, obvious move on Ebay’s part to drive people to use the PayPal method of payment for the fees they will collect when a buyer uses PayPal. Talk about rights violation.

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