Dynamic Ad Rates fluctuate wildly?

[bamorris]

So I got an offer today for a pair of NWOT Levi's I have listed.

17.6 percent? That really kills my margins. I normally would have accepted this offer, but there's just not enough left on the bone for me to make a modest profit.

So rather than mess around with changing the advertising for that listing. I declined the offer and ended the listing. I did a "sell similar" and would you look at that?

Today's suggested rate is a modest 11.2 percent....

Might not seem like a lot... but it is quite a stark difference. 

Please don't respond with "use a static rate". I'm going to switch over to that shortly. I was just trying out Dynamic rates to see if it would improve my position and get my products in front of customers.

But how could I get a offer with a rate of 17.2 percent. Then minutes later get a "suggested rate" of 11 percent on listing.

This seems a little off to me.

[chowpit36iw · Accepted solution]

Evidently, they can fluctuate quite a bit however, you can cap the %

[coolections]

I believe those rates are like the stock market and fluctuate daily depending on how many others use it. I think it is crazy to take Ebay up on any of those rates. Why not just lower your price 11% and forget about it. Do not take offers and just wait for someone to use the BIN.

[bamorris]

I'd rather raise my prices 11 percent and get it in front of more customers than lower my prices 11 percent and hope someone finds it.

It seems that in the markets I sell in, getting your product in front of customers is paramount. I sell quite a bit using promotional rates... I've just never seen it as high as 17

The "don't take offers advice" I see dispensed on here is, in my opnion, bad advice. You want buyers to engage you. If your margins are so thin you can't afford anything less than your ask, you should find a better supplier.

I think we just have a difference of strategy. I'd prefer to engage customers and get my products in front of them where the advice you are offering requires someone to find me in search.

Every time I sell a promoted item, I essentially steal one of your potential customers because my product is showing up on your listing. Or I rank higher in the search results than you do and people aren't going to put in the effort to find your product.

It's just business. But at 17 percent? Please.

[bamorris]

Thanks for this...

Digging in now, I just put a cap on the Dynamic rate so I don't get involved in a race to the top. I'll mark your response as best answer.

[tobaccocardyahoo]

Your competition controls what you pay for dynamic ads.

If they are costing you sales, you need to make some strategic decisions.

[bamorris]

I somewhat agree... it's a race to the top.

My point was how could I get an offer at 17 percent ad rate. Then when I relist get a soft 11.7 percent ad rate. I do see that the "Suggested" vs "Your Ad Rate" difference in the Campaign area in the Seller's Hub.

Is it dynamic by the day? When does eBay observe a new day? It seems a little "black box" to me.

[my-cottage-books-and-antiques]

@tobaccocardyahoo 

"Your competition controls what you pay for dynamic ads."

No, they don't.

You can cap the rate and/or you can set up an adjusted suggested rate....the first you should absolutely do, the second isn't a bad idea.

The suggested rates can change daily....some days they go up, some days down, some days they stay the same. They aren't directly tied to what your competitors have chosen as a rate....when PLS first started, they were tied to an average of the rate sellers were using for that category...but that is no longer the case.

I think most sellers also now have access to the "forecasting tool", which will give you some idea about the strength of each rate for your chosen items (in terms of impressions, not views or sales).

For my stuff---long tail, single quantity items--- I see no reason to cap at a high rate. I use a forecasting rate  that falls into either "modest" or "average."...good is usually too rich for my blood, and I am not at all convinced that it will make sufficient difference to justify the extra amount I would need to pay ebay if I make a sale. Other sellers will choose differently.

I sometimes also adjust the suggested rate, usually downward, although you can adjust up or down. So, for example, if my cap is 10%, and the suggested rate that day is 7%, but I have specified an adjustment of -0.5%, the rate for me will be 6.5%, because ebay will adjust the suggested rate per my instructions. 

So, sellers do have some control over this, but a surprising number of sellers seem to be unaware of the need for a cap and the value of adjustments and the forecasting tool.  

[m60driver]

You made the right business decision by just declining the offer.  Dynamic rates are not intended for smaller sellers of lower priced items.  Even the suggested PL rates often become a joke.