eBay promotions...
Ebay can almost double their Final Value Fees by 'encouraging' sellers to promote their items. I have tried it and thereby I am part of the so called 'throttling' problem.
Recently I ran a campaign through eBay promotions that meant I paid an extra 8% on top of my final value fees for the extra exposure. But I only paid the extra if my item sold. In my case around 20 items were sold. Not overly impressed with that but at least some things sold.
BUT.. I had 400 items on promotion, ALL showing in prominent position every time a buyer searched.
Great for me but not so good for the sellers who had their item pushed off of a prominent position for my 380 non selling ones on every search.
The only hope the other sellers would have had is to promote their items too, thereby demoting mine (possibly).
This is natural 'throttling' of the sort we would find with physical stores. We are either in the High Street paying high rents and getting some turnover or in the back streets, paying low rent and scraping a living. We pay our rent money and we take our choice of location. Ultimately that would mean paying more to be where the action is.
Of course... expect lower net profits (due to extra costs) and ever increasing competition (due to those willing to pay those extra costs) just as the physical stores are experiencing in the malls. Also, as with physical stores at the moment, expect closures.
To my thinking there will be a limit to what buyers will pay or can afford so it would mean that the squeeze will be on the sellers by both eBay (in extra fees) and the consumer (not willing to pay more). The consumers have an immense amount of choice about where they shop, sellers do not have that same immense amount of choice about where to sell.
Where do I think this will end for eBay? My answer has to be 'Right back where they started'.
eBay's niche always was and always will be... Consumer perception of a bargain and subsequent acceptance of cheaper less speedy service upon purchase.
The days of Chinese flooding of some eBay sectors are numbered. The reason is that even the Chinese will not be able to weather the increased costs of eBay promotion. Mass listing at loss leader prices will not be sustainable. eBay will of course suffer as a result but this is a good thing, they need to suffer, they need to downsize, they need to be forced to recapture their original niche.
As soon as they do, the smallers sellers will benefit, many more will return and the cycle will begin again.
For what it is worth eBay.... I will happily buy eBay for $1 when the insolvency comes and return it to what it was.
'Working for free and updating my sites to match eBay Partner Network's policy changes is my passion.'
