eBay

split-cane · ‎10-19-2020

Haven't sold anything for awhile. Now listing a bunch of stuff and had a chance to check out the Buy It Now function. I think eBay is losing money for sellers and for themselves the way they operate it now.

There are two ways I think eBay is shooting themselves--and us--in the foot. First, this newish minimum 30% price jump. Second, is the fact that the BIN option disappears after someone makes a bid. In combination, this has the effect of forcing me to choose between an outrageously high BIN price that most buyers will never accept OR an outrageously low start price that sellers should never accept.

Let's say I have an item that eBay sold prices indicate routinely, but not frequently, sells for $100, i.e. the fair market value is $100. Let's say also that I want to give the buyer a chance to pay a mark-up to get the item sooner and also avoid losing to a higher bid. Ideally, I would want to mark that item up something like 10-15%. Just enough to greatly improve the gross margin while not causing enough pain to the buyer to put them off the deal. The vast majority of buyers will not pay an extra 30% over what they could routinely get for significantly less just to save a few days or ensure they get an item that they can simply wait for again. Does it happen now and then? Sure. But not often. Ask anyone you know. So what happens? The forced 30% mark-up sits there probably 80%+ of the time with no action. No ROI. A complete waste of time. If someone eventually decides to pay the going rate of $100, quite sensible, the BIN option disappears anyway and there is little incentive to get in a bidding war over the item when one could just as easily wait for the next one and save significant money.

But I could pick $115 as the BIN and lower the start price to meet that more reasonable mark-up on the $100 item, right? Except to do that, I would need to list the item for about $88, $12 less than the going rate. Buyers will jump on that price for sure and right away. And then the BIN option disappears! Many bidders will make that first bid just to kill the BIN option on hope that they will get the item for somewhere between $88-99. Not only that, but now I am at risk of losing $12 if no other bidders come along, or some lesser amount if it doesn't reach $100 that I originally wanted to start it at and routinely could get. Why would any seller take this route? Sellers have a MUCH BETTER idea about what their products are worth and what buyers are likely to find too low or too high than some generic 30% minimum.

If you look at the psychology of most people--and I have--what would really work well is if the Seller could determine the BIN price at whatever level they wanted. After all, they know the market, or at least they ought to. But, IN ADDITION, leave the BIN option open until the end of the auction or until the bidding is higher than the BIN, whichever comes first. This allows the seller to achieve the maximum potential value out of the BIN on every auction because it is present for some bidder to avail themselves at anytime during the auction. Why should the first viewer of an auction be permitted to deny the BIN option to all other potential BINers by placing a relatively lower bid? Furthermore, an active bidder may lose patience or become convinced he will be outbid unless he hits the BIN figure to secure the item. Everyone is a winner in that case. Active bidders will be highly motivated to bid higher, or even take the BIN option, if they know another bidder could swoop in at anytime to win the auction.

But, what if the BIN eliminated a situation where a bidding war might go over the BIN price? Well, remember that the seller has already assessed the market so this is HIGHLY unlikely...BUT...eBay could code the system to eliminate the BIN once bidding reaches say 98% of the BIN value. This would be a fine valuation for everyone whether it stops there or continues past the BIN.

What if there are no bids on the start price or the BIN? That's ok. eBay already acknowledges that some sellers are over zealous or that there are natural market fluctuations with their Easy Sell option. Sellers can choose this option or adjust the pricing manually at their discretion. No harm, no foul.

Forcing a 30% mark-up for a Seller to use BIN is wrong-headed thinking. Whoever decided this spends most of their time in a dark room staring at a blue screen or bragging about their MBA certificate at the water cooler. Get real, eBay. This isn't reality and it is also **bleep** game theory. Let the Sellers determine the BIN mark-up and then allow the BIN option to ride out the entire auction. Sellers and eBay alike will make more money and more bidders will feel like they had at least had a shot to secure an item they want if they are willing to pony up. If not, they can still play the auction game for entertainment and maybe get a deal.

alcoforever · ‎10-19-2020

I think the auctions with BIN work just fine just the way they are.

kensgiftshop · ‎10-19-2020

@split-cane wrote:
Let's say I have an item that eBay sold prices indicate routinely, but not frequently, sells for $100, i.e. the fair market value is $100.

List it as a fixed price for $100.

If they don't sell for more then that, you probably won't get any more then that.

Have a great day.

luckythewinner · ‎10-19-2020

@split-cane wrote:
There are two ways I think eBay is shooting themselves--and us--in the foot. First, this newish minimum 30% price jump. Second, is the fact that the BIN option disappears after someone makes a bid. In combination, this has the effect of forcing me to choose between an outrageously high BIN price that most buyers will never accept OR an outrageously low start price that sellers should never accept.

I don't consider enforcing a 30% spread between start and BIN to be "outrageous".

For an item with a $10 target price, that would mean a range of $8.50 to $11.05
For an item with a $25 target price, that would mean a range of $21.25 to $27.63
For an item with a $50 target price, that would mean a range of $42.50 to $55.25
For an item with a $100 target price, that would mean a range of $85 to $110.5
For an item with a $150 target price, that would mean a range of $127.50 to $165.75
For an item with a $200 target price, that would mean a range of $170 to $221
For an item with a $250 target price, that would mean a range of $212.50 to $276.25

dippitydoo · ‎10-19-2020

Gonna put my toe in the water.....and likely have it bitten off, but....what is this minimum 30% percent thing? I tried to follow your email (quite detailed!), and maybe its the wine spritzers, but I ended up your post with a feeling of **bleep**......probably showing my lack of business skills, but I just don't see the trouble here...your starting bid is the LEAST amount of money you'd accept for your item, and your BIN is what you'd be willing to end the auction at for "instant money". I suppose others will let me know what I am missing, lol!!

-Dippity

timelessauto · ‎10-20-2020

I would ask “What is the value of having a BIN on an auction listing” no matter what the start and BIN percentage difference is?

Your question assumes you want to sell an item at its highest value. A lot depends on what you have to offer, what selling method works best, and assumes you have done the market research to know what the value is. Price point is important here ( 10-30% more on a $5 item compared to a $100 item) If you are selling a widget that you can by anywhere on line or locally it has a fixed market price and better for a fixed price listing and not great for an auction style since no one wants to wait to get it (unless your auction is way under market value) . The other major platform didn’t get that big offering auctions… only fixed price BIN.

We find auctions are better suited for something where market value cannot be easily determined. This usually relates to “rare” or items not readily available on the common market. These are great for auctions with a starting bid the minimum you want or think will get a bid. Why limit yourself to a BIN auction when you might get 2 bidders who want it more than the other thus ending up selling on 10-15% ( or even 30%) more than starting price and maybe less than its highest value if a bidding war? We have had auctions where we would have lost big if there was a BIN.

BIN is best for fixed price listings, list your item for BIN $115 add a best offer feature to take your 10-15% less on those occasions and let the buyer feel better about a better price and immediate shipment. Use the automatic accept/decline so you don't even have to monitor it. Send your watchers offers of 10-15% less if your item does not move fast enough and adjust accordingly

disneyshopper · ‎10-20-2020

You have been a member of ebay since 2001, but I don't know how long you have been selling.

In the past, ebay only had auction style listings. Then ebay added fixed price listings. They were priced differently. Then ebay added to BIN to auction style listings. It was less expensive to list auction style, so what many sellers did was to list auction style with a BIN of just a dollar (or less) than the minimum bid. I guess ebay thought they were losing money this way, so they came up with requiring that the BIN would have to be at least 30% more than the minimum bid. I don't recall how soon after that was implemented that ebay decided that in 4 categories, the BIN would not go away with the first bid, but would stay available until the bidding reached 50% of the BIN price.

disneyshopper
Volunteer Community Member

split-cane · ‎10-22-2020

Thank you for taking the time to reply. This is interesting history--I don't sell professionally so don't track these changes closely over time. Well, this kinda proves my point that the BIN feature is messed up: the 30% mark-up is a reactionary measure artificially imposed due to an unintended consequence of another policy. I still don't like the 30% figure. My items are not necessarily unique, but are not commodities either. Pricing can vary. I am OK with not achieving the very highest price if I can consistently motivate bidders to accept a price that is somewhat higher than what I believe is the current market value. 10-15% above market is more than acceptable to me. I could live with 30% if...if...the BIN would be an option for the course of the auction, or, as you indicated, the bidding reached, say, 50% of the BIN mark-up or 95% of the BIN price.

split-cane · ‎10-22-2020

Thank you for taking the time to reply. My items are not necessarily unique, but are not commodities either. Results are variable but the means are pretty stable and predictable. I am OK with not achieving the very highest price if I can consistently motivate bidders to accept a price that is somewhat higher than what I believe is the current market value. 10-15% above market is more than acceptable to me. I could live with 30% if...if...the BIN would be an option for the course of the auction, or, as you indicated, the bidding reached, say, 50% of the BIN mark-up or 95% of the BIN price. I will take a closer look at your methodology. It may have merit in my case.

split-cane · ‎10-22-2020

Thank you for taking the time to reply.

split-cane · ‎10-22-2020

Here's the problem. Let's say the first person to look at the auction is willing to pay my starting price and bids. That's OK for me but not great because that bid eliminates the BIN option; it disappears and now I am back to a regular auction. What then was the value of the BIN? It only has value if no one kills it with a starting price bid. The second viewer may well have been willing to pay the higher BIN price in order to guarantee a win and secure faster shipment. That same buyer may not be willing to pay more than my starting price. Even if the second bidder were willing to pay slightly more, I will only beat the BIN price I could have had if these two bidders are willing to pay above market price with no guarantee of a win and a longer wait for acquisition. Unlikely to say the least. The real value of BIN to a buyer is securing the item against all other bidders and the current policy eliminates this important for potential viewers far too early in the process. It's a type of anti-seller churning wherein eBay incentivizes the bidders to make the lowest possible bid rather than the sellers desired bid. Just like a real estate agent. Knocking $10K off the price of your house makes a tiny change in their commission but represents a $10k hit to you. eBay has been pressuring sellers with "start with a lower price" for years. This defeats the whole point of BIN. I also don't like that BIN mark-ups are controlled by eBay. Sellers should be in charge of that mark-up, not some artificial pricing regulation imposed by eBay because they screwed up their pricing model when then instituted listing fee mismatches with fixed price listings. Sellers will always get the job done eventually; eBay needn't worry about that. I could just not use eBay, it's true, but without sellers there is no eBay and for that service we provide to eBay, we sellers should have more control over the terms of our transactions since we have little control over anything else in this process.

robxznyc · ‎10-22-2020

Lol, OP was talking about when you use auction with buy it now format, eBay requires that the BIN price to be at least 30% higher than the auction starting price.

"What do we live for, if it's not to make life less difficult for each other?" — G Eliot

coolections · ‎10-23-2020

What you are trying to do is use a BIN but you are falsely saying it is an auction. Auctions are designed to let the bidders decide the price. Starting an auction at the BIN price is a big waste of time. When Ebay says 30% higher they do not mean for you to start the auction at $100 BIN price and then ADD another $30 to the price. Skip auctions and just use BIN only.

ladyindecadence · ‎10-23-2020

I'd like to see it set up that you can start an item with a $100 buy it now price and an opening bid of $9.99 and the buy it now price stays available until the bidding reaches 90% of the buy it now price. That way once bidders get in early it may convince potential buyers that there is enough interest in the item to just use the buy it now option rather then take their chances with the auction. I think this would be a great way to push sales of better items.