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Saturday, August 04, 2012

Is eBay Making Itself Obsolete for Stamp Sellers?

Yesterday, I got a notice from eBay, explaining that my "seller performance" wasn't up to snuff. As as result-- I learned-- a number of restrictions had been placed on my selling account. As a point of reference, I am a 14-year "veteran" of eBay, and have a 100% positive feedback rating.

Now, it's no secret that eBay often is the source of controversy among hobbyists (like me) and stamp dealers who sell stamps on the mega-auction site. In the course of the last 10-odd years, eBay has developed from a rather interesting "online collectibles mart and garage sale" to something akin to yet another colorless "Online Mega-mall."

That's just personal opinion, of course.

In spite of complaints and occasional collective whining, many stamp sellers have stuck it out with eBay, even though the fees are somewhat high and there are lots of "rules" that frequently make it difficult for stamp sellers to operate. But they still stick to it. I would count myself among those. Why? Because eBay works!

Here's the thing, you can go to an "eBay alt" site and pay "no fees" and end up selling three items a month (if you're lucky!) or you can sell on eBay and pay 30% overhead to sell 100 items a month. Simple math: You made $30 on the "alt" site but PAID NO FEES!!! (to be said with a combination of smugness and pride) or you made $700 on eBay paying $300 worth of fees... to me, that's a no-brainer. Being "offended by fees" is-- in essence-- just another variation of "cutting off your nose to spite your face."

Again, that's just personal opinion, albeit backed up with experience.

My background is in business management (among other things) and ecommerce. If you run any semblance of "a business," you go where you can make the money. And making money isn't about having things "FOR sale," it's about actually "SELLING" them. A lot of the people in what I dub the "No Fees Club" take a rather myopic view of selling expenses, somehow turning the avoidance of them into the single most important aspect of "success." Then they tend to point fingers at those who say "But I'm not actually SELLING anything!" (on some eBay alternative site) and actually blame the lack of sales on them for not lowering their prices since they are "not paying fees."

Ultimately, "lowering prices" is the single weakest marketing and business development strategy in the world. Let's face it-- if you lower your prices by 30% because you are no longer paying 30% overhead... but you only make 1/3 as many sales... you end up allowing yourself to be far WORSE off than you we're before. Get real!

But getting back to eBay's most recent changes, there's now a certain element of doom on the horizon, when it comes to being a stamp seller. And it's not that eBay is on some kind of vendetta against stamp sellers, it's just that we who trade stamps happen to have a product that doesn't fit eBay's new "general" policy.

This stamp can be purchased for $6.00 in my eBay shop.
75c shipping is fair, but would you pay an extra $3.00 to get it?
Here's how things have typically worked out for me, in my prior dealings on eBay: When I sell a random $8.00 stamp, it goes into a first class envelope and I have historically charged US $0.75 for shipping to buyers in the US, $1.95 to buyers elsewhere. That covers the cost of a 2-ounce (up to 60g) letter and supplies-- an envelope, a cardboard insert to protect the stamp(s), a glassine for each stamp. I'm not here to make money on shipping.

Problem number 1: In order to comply with eBay's new guidelines to be a "top rated seller," I must upload "tracking information" within 24 hours of shipment. Here's the problem: you can't have tracking information on a normal letter. In order to get that additional service, the package (containing my $8.00 stamp) would have to be shipped as a "first class parcel." So now the cost to mail is $1.95 for postage + $0.85 for trackable delivery, for a total of $2.80. What's more, I can no longer use a plain envelope to mail (cost $0.02), I have to use either a "photo mailer" or a padded envelope (cost $0.25 each, even in bulk). So... my effective cost to mail a stamp would go from slightly under $0.75 to $3.05, in order to follow the new guidelines.

Problem number 2: Stamp collectors... collect stamps. It would be possible for me to make shipping less expensive by using an online shipping service, through which the USPS offers reduced priced shipping and free (or very low cost) tracking. However, that would mean using a pre-printed and encoded paper label as postage, rather than stamps. Pretty boring, for a stamp collector-- especially given how many buyers write to me (with their payment) to say "please use current commemorative stamps on your mailing." Thus following the one avenue to savings would potentially hurt my reputation, as a seller.

Problem number 3: Even IF I were to follow eBay's guidelines to obtain "top rated seller status," I would promptly lose it. Why? Let's face it, stamp collectors are pretty "thrifty" folks. And in the "detailed seller ratings" on eBay, there's one "grade" you give sellers for "reasonable shipping costs?" If I am charging $3.05 to send an $8.00 stamp it would not be long before I'd get sufficient "low seller ratings" (because $3.05 IS expensive, to ship one stamp) to no longer be in line with "top seller" requirements... and then I'd be right back to square one.

Problem number 4: This one is particularly important! When you are not a "top rated seller," there are limitations placed on your seller account (as I just discovered), as to how many items you can list, how much you can sell (dollar wise) and how long it takes for funds from PayPal to be "released" to you. Ironically-- the delay of payment is actually being caused by the lack of tracking information-- the very requirement that's causing the "failure," in the first place. In other words, if I decide-- and even if my (and other stamps sellers') buyers agree-- that being a top rated seller is "not important" to me, I am also agreeing to the following "penalties" or "sanctions," if you will: (a) I no longer qualify for a 20% discount on my selling fees, (b) I will only be permitted to offer a fairly low number of stamps for sale, per month, (c) in case I thought to by-pass "b" by offering high value stamps, I am only permitted a limited dollar volume per month and (d) because my seller performance doesn't meet eBay's standards, I will no longer have immediate access to PayPal payments made to me. Now IF I were uploading aforementioned "tracking information" that delay would be only a few days... but since I am a stamp seller, and we've agreed that tracking information doesn't really "work" in this field, the PayPal delay will be three weeks!

I've been selling on eBay for a LONG time... and my buyers seem to
be fairly happy with the way I treat them.
I'll state, once more, that I have no individual beef with eBay, as a marketplace. But I do feel saddened by the fact that the "product" offered by stamp sellers is-- for lack of a better term-- "incompatible" with selling on the "new" eBay. As a long-time eBay fan with a good reputation as as seller, I feel like I am coming up against a "no-win" situation.

There are plenty of rumors in the stamp trade that eBay is "out to get us," prompting the question: "Is eBay trying to 'get rid of' stamp sellers?" Doubtful. Sound like "conspiracy theory" thinking, to me. As of this morning, there were approximately 2.37 MILLION listings across eBay's various stamps categories. If you're a publicly traded corporation who has to keep shareholders happy, would you be likely to "dump" one of the largest categories on the site? Probably not. It's more likely an issue of eBay management simply not understanding that not all products are sold the same way... and the people in the boardroom being so far removed from the "street level operations" that they don't see any logistical issues with a "one size fits all (sellers)" approach.

The challenge-- and problem-- facing stamp sellers is that there really is no "viable alternative" to eBay, if this somewhat hostile selling environment persists. Sure, dozens of people will read that last sentence and insist that they "do well" on any number of other sites. However, a closer examination of all these alternatives (simply done by looking at the percentage of "closed" listings that ended with a sale, and the number of listings "with bids" as a percentage of total listings) will reveal that "eBay alts" are LUCKY to have a sell-through rate between 5% at the top end (Delcampe and Stamps2Go) and down to less than 1% for most... compared to eBay's 30-40% sell-through rate. From a personal perspective, when I run stamp auctions on eBay, my sell-through rate has been in the range of 90-95%. Meanwhile my "alt site" efforts have mainly resulted in private messages asking things like "Will you take $2 for that stamp you've listed for $8?"

I don't expect eBay to suddenly "see the light" and institute lower fees for the benefit of stamp sellers, and that's not my point, in writing this article. It's not the fees I have a beef, it's the limitations placed on sellers. What I would hope for-- against the flow, no doubt-- is a chance to be able to conduct my business in peace, the way business in my "industry" normally is conducted. I accept that I may not be able to be a "top rated" seller, but I'd like the opportunity to not have "the system" automatically relegate me to "below standard," with the attendant limitations on my selling activities.

Bottom line: Individual sellers are NOT "Wal-Mart." Individual sellers are what add interest and uniqueness to a marketplace. And, ironically enough, eBay was BUILT on individual sellers... there would be no eBay, were it not for the thousands of individual sellers who sold their "stuff" and collectibles, back in the 1990's.

So is there a "win/win" solution in all this?

Perhaps. One option might be to force ALL eBay sellers to include a "weight" entry with all their listings. For stamps, sports cards and the like, that would be a fraction of an ounce. Subsequently, any parcels below a certain weight-- say 4 ounces-- could be made exempt from the tracking requirement, thus taking most stamp sellers "out of the loop" while still leaving the tracking requirement intact where it is "relevant," namely for larger packages. The beauty of this approach is that it doesn't try to "play favorites" with stamp sellers, it addresses a broader issue that items shipped in an ordinary first-class letter can't purchase tracking.

Another and perhaps more feasible solution-- given the existing eBay interface and the way pages are coded and linked to both PayPal and shipping services (UPS/USPS/FedEx, etc) is to simply add "First Class LETTER" as a shipping method, when items are listed. If you (as a seller) choose that as "how this item will ship" it will automatically "filter through the system" from the USPS site that the shipment in this particular sale can't be tracked... and if something was shipped "first class letter" there will be no place to enter "tracking information." Subsequently (to the benefit of sellers who sell "mixed goods") only "trackable" transactions would count towards a given seller's "top rated seller" status. So... if I sell 500 stamps and 50 stockbooks... I would still have to upload tracking info for the 50 stockbooks... but I wouldn't be penalized for NOT doing so, with the 500 stamps. The 500 stamps would be "non-counting transactions."

Another alternative would be to have "business" and "individual" class sellers on eBay, where an "individual" is subject to less stringent rules than a "business." They could be delineated by a number of transactions or dollar volume per year. That method would be somewhat harder to implement, however, and would make less "sense" in terms of WHY we use tracking information for packages.

Of course, that's not an easy "sell," as eBay has made itself a major stakeholder in the shipping business, by charging final value fees on shipping. But sometimes you have to look beyond the immediately obvious and consider the longer term benefits.

I hope you have learned something from reading this commentary, or-- at least-- it made you pause and think. If you are a stamp (or other) seller on eBay and you can see the inherent in eBay's new guidelines, please take a moment to tweet this article, or post it to your Facebook page, or google+ it, or post to your newsgroup, or stamp collecting forums. As you probably know, NOTHING happens unless there's awareness. And there can be no awareness, unless people spread the word. And remember, this also affects you if you're only a BUYER of stamps on eBay-- if the dealers leave, so do the stamps!


So spread the word!

11 comments:

Alex Romanoff said...

Paypal holds is an issue which I don't think is completely related to your seller status. The holds policy was instituted in late 2010 and was tweaked again August of 2011. I received a message out of the blue earlier this year that the holds were being placed on all of my incoming payments. I immediately called customer service and was given a list of reasons why this could have been done, none of which made sense or applied to my account. I escalated to a supervisor and they were able to resolve the issue after putting me on hold and researching my account. This is one area that I think is nonsense. It's my opinion that their policy is too broad and indiscriminate in application and I was prepared to complain to my state Attorney Generals office if they had not resolved it. My TRS status was also revoked recently because of the tracking policy and I sincerely hope they don't try to restrict my Paypal account again. This is one area where I will not be bullied and I think we have consumer protection on this one. Alex

Peter M. said...

Alex, thanks for commenting! You make some good points.

I feel uneasy about the ambiguous relationship between PayPal and eBay, and the degree to which they are-- or are not-- the SAME company, or two independent companies under the same ownership. The impression I get is that all it takes is for eBay to toggle a "less than perfect" seller switch somewhere in order for PayPal to slap restrictions on an account.

It saddens me that we may end up with legal action as the only course forward, to protect ourselves.

michaelatcddstamps said...

Hello, first, excellent piece, well written and good, balanced coverage of the subject. And informative. Thank you. Second, I am a Director of the IPDA - www.ipdaonlin.org - Internet Philatelic Dealers Association, Publicity Officer and Newsletter Editor. Please may I have your permission to quote the piece in our September Newsletter. I will also refer / promote your blog. Third,on a personal note I would like to add a link to your blog from mine.. are you ok with that please.. I am at cddstamps.blogspot.com and my email is cddstamps@gmail.com

I hope to hear from you

Many thanks.. Regards.. Michael Dodd

Peter M. said...

Michael, thanks for stopping by and commenting.

You're more than welcome to quote anything from the blog, as long as it has proper attribution. You're also more than welcome to link to my blog-- I went and briefly looked at yours, and look forward to reading more, once I have a little more time on my hands; I'm about to leave on a trip tomorrow morning.

Regards,
Peter

Shell said...

Well said Peter M!

Especially Point 2 hits the nerve in my book. I get asked all the time to use current or particular stamps as postage on my eBay and website Cyprus stamp sales.

Not only do I do that, I often put stamps on the envelope to the value of the Registered postage costs rather than just paying the lady in the post office for the fee so my collectors get more stamps than they bargained for.

It's a great way to get stamps all over the world.

eBay are really getting too big for their boots and to be honest, I think they've forgotten how they started out and what the word "auction" means now. They just want to be a big online market and would be perfectly happy if we all simply sold in the Fixed Price format instead.

I've reblogged your post. Let's spread the word!

Michele

William Butcher said...

Your observations are spot on but the alternatives to Ebay still aren't developed. I noticed that half of Ebay's profits are generated from Paypal. It makes sense (to them) to restrict sellers and make them pay higher fees. I was pretty miffed about the changes and thought about dropping Ebay. Without an alternative though it's not an option. I refined my shipping cost with padded mailers, cardboard, and Ebay postage to about $2.05. The one saving grace I found was to push the tracking as a sales point. As a buyer on E bay as well I have had numerous run-ins with sellers and not delivering the purchase. The tracking assures the buyer a timely shipment and ability to monitor the progress of their delivery. Both are bonuses and should be pushed. In the meantime would someone come up with a better trading environment!

Peter M. said...

Michele, thanks for your comment, and for helping to spread awareness!

I continue to believe that eBay doesn't "have it in" for stamp and collectibles sellers... they simply don't CARE. As a large public corporation operating in difficult economic time, they are slaves to the next quarterly profit report, so decision making is increasingly based on "what works, RIGHT NOW." And that probably IS working.

In the LONGER term, it will fail-- mostly for psychological reasons. eBay created itself as a "household name" based on the fact that people believed that "you can find EVERYthing on eBay!" From a business perspective, that's a REALLY valuable piece of "branding." Current policies will backfire because eBay will reach a point where the "unique sellers" (who made that statement TRUE, in the first place) will have LEFT, and "you can find EVERYthing on eBay!" will no longer be a reality.

But that's the subject of a second article I am currently writing.

Peter M. said...

William, thanks for commenting!

I agree that "alternatives" are really not there, for stamp sellers. As I see it, the problem with "eBay alts" is that they ALL position themselves based on "LOW/NO fees," rather than on being BETTER than eBay. Take a site like UK-based eBid.net-- they have been around for over 10 years, but hardly anyone has heard of them. They have "free listings" but NO traffic from buyers, because they have NO publicity... because they have NO money.

For me, the problems with eBay isn't FEES, but restrictive selling policies. I'd happily pay eBay's level of fees to an eBay that's seller friendly. I'd PREFER a site that had free up front listings (or maybe 1c, or 5c), against a back-end FVF fee of 8-10%... IF that site had eBay's level of awareness and traffic.

Frank Kaplan said...

No comments of BidStart? I've sold some items but not much traffic.

We need to get copies of this blog to stock brokers, stock bloggers and analysts. That might get eBay's attention. They only care about the bottom line and the stock price.

Peter M. said...

Frank, thanks for commenting.

I have used BidStart (as well as its predecessor StampWants) but don't believe they are that viable as an alternative. The tiny number of items that are actually AUCTIONED tend to fetch "bottom fishing" prices due to lack of traffic, and hence bidding competition. As a fixed price venue, BidStart has become an unmanageable ocean of "clutter" because there are tens of thousands of listings for many countries, but no subdivisions in categories-- this is where the very fine subdivisions at Delcampe puts that site WAY ahead of the rest. BidStart also has the problem of being a place where "dump and run" dealers list their inventories also listed elsewhere and never come back to update... I currently own several stamps (purchased elsewhere several YEARS ago) that are listed in those dealers' inventories on BidStart as "for sale." I'm sure if I tried to buy them "again" I'd get a "Sorry, we added the wrong scan, here's a similar stamp" message. Which is UNacceptable, to me.

As for distributing this blog post, please do! I am currently working on a more solution oriented follow-up, which might also be of interest to the pundits (my background is in finance and corporate management, btw).

In the meantime, a good place to start might be voicing concerns to eBay's Investor Relations department... speaking as "investors," not as "stamp collectors," with a simple "is it really TRUE this is eBay's new policy? How can you justify giving up sales in these tough economic times?" inquiry? If investor relations hears that often enough they will soon be all over marketing asking "What the &%$#)(*?!!! are you guys DOING?" My own experiences in the IT industry taught me that management listens to inventory relations before they listen to customers... ultimately, if investors flee that's FAR worse for the company than customers fleeing...

paul nunan said...

Nicely said ,
Sadly the problems are Worldwide on Ebay. Restrictions on post , tracking , weight , and times change country by country; and ebay seem to think the Henry Ford motto of "any colour you want , as long as its black" applies

Im no genius that can solve this , or wave a magic wand for it to go away but in the decade Ive been trading ,I sell worldwide and have posted to 150 countries round the world ,l including some I wouldnt be able to find readily on a map and many many times I have had nice comments about how lovely it is to reciev parcels with REAL stamps on them rather than an online payment label.
Im neither a stamp collector or seller but even I see the value of using stamps to enhance some small area of your business.

It was a win win situation , buy stamps (commemorative ones cheaply on ebay as odds and sods packages and then use them to offset ever higher postage prices - get £100 worth for £85 and you recycle , make people happy and save postage too , marvellous >

Looks like thats another door to slam shut in our faces -