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What Will eBay Look Like A Year From Now?

August 26th, 2008 by Skip McGrath

This was a big week for announcements and there are more to come. So let’s try and put this into perspective and figure out where we go from here.

First of all everyone should realize that all of the announcements made this week about fees, search, payments and seller standards are not happening instantly. All of them will become effective after several weeks.

The new Fixed Price listing fees will be first. They go into effect on September 16th –almost 3 weeks from now.  Other policies will not become effective until October or November. So we all have some time to plan and implement our selling strategy.

I have tried to cover the key parts of each announcement, but some of the new policies include important small details that I don’t have room for here. Therefore I strongly recommend all of my readers set aside some time to read the complete information from eBay at: http://pages.ebay.com/sell/August2008Update/Overview/

When you look at the details of each announcement, be sure and click on the link to the FAQs for each policy as these contain some really good info. Much of it was stuff I missed the first time around.

Let me alert you to a few other things that are coming that I recently learned. Many of these have not yet been announced.

eBay Express – eBay express will go away. To use eBay terminology it will experience “end of life” sometime later this year or early next year.

eBay Checkout – One of the advantages of eBay express is that buyers can buy one item from me and one item from you and checkout with just one payment. Although eBay Express never really caught on, eBay does see some value in the checkout model where a buyer can make one payment for multiple listings.  So perhaps early next year start looking for some changes to the checkout process that will allow buyers to purchase items from different sellers and make one payment. I am pretty sure this will only be available to sellers who accept PayPal as I don’t see how eBay could accommodate other payment systems in this type of model.

Seller Dashboard – eBay will introduce some changes to the seller dashboard later this year. One of the changes will give sellers visibility into your specific star ratings. Right now you can only see your averages. When the improvements are rolled out you will be able to see how many 1,2, 3, 4 and 5 stars you earned.  There may be additional changes as well designed to give sellers more transparency into the actual ratings and numbers.

eBay Search engine –Finding 2.0 will become the standard –probably early next year.  In fact today you can see a small preview of what search results will look like in the future. Check the eBay announcement board for August 25th under the link: New Look for ‘Matching Products’ Module in Search. If you want to see what Finding 2.0 looks like now, just do a search on eBay and opt in to the beta from the link at the top right of the results page. If you don’t like it, you can opt out at any time.

My eBay Page – eBay is currently beta testing a whole new look for the My eBay page. I tried it for a couple of weeks and opted out.  Personally I just didn’t get it.

It took longer for me to go from page to page to view, edit and cancel my listings and store pages.  Frankly it was a real pain. I am not opposed to change –but I need to see the benefit. Anything that adds to my work load is not something I generally support. If you have opted into the new My eBay page, be sure and make your feelings known on the My eBay discussion board. One of the threads there is where you can vote on the test. So far it’s about 150 to 1 against. Some of the posters are obviously people who just don’t like change –but many of the posters have very real issues with what has become a very important seller tool.

There will indeed be more announcements that we haven’t anticipated. We all need to stay tuned. You should get in the habit of checking the eBay announcement board on a regular basis.

So what does this all mean? Is eBay still a viable opportunity for new sellers and the many  thousands of small and/or occasional sellers? More importantly does eBay still offer the opportunity to build and grow a profitable business for the little guy or gal operating out of their home?

There is no question that it is more difficult to start and run an eBay business today than it was in 1999 when I started –but that is true of the entire online market –not just eBay.

The internet has matured and grown. Although that has created some barriers to entry it has also created lots of opportunity. When I started selling online, only a tiny percentage of people were brave enough to risk an online transaction –today we take buying products, services and information online for granted.

So yes –it takes a little more work and effort to get started –and yes there is more competition –a lot of it from large companies with deep pockets, but the market is also larger.  Would you rather have 10-percent of a dollar or 1-percent of a million dollars? That is overstating it a bit –but you get the point.  The growth of the internet marketplace –including eBay, has been such that although there is more competition –there is also a much larger market –and with it more opportunities.

Five or ten years ago if you worked in a small niche like fishing lures, the total online market for your product might have been a few hundred thousand customers. Today the online market for fishing lures is in the high millions.  When I started selling books on eBay I would often get one or two bidders fighting it out for a particularly hot title. Today I often get 4, 5 or more.

What about fees? One of the most common questions I get from people who want to sell on eBay relates to “can I still make money with eBay’s higher fees?”  Let’s face it –everything is more expensive. The government claims that inflation has been running at 4 to 5% for the past few years. But that number excludes food and energy. When you add those in, real inflation is closer to 7 or 8% –some economists claim its as high as 10%. Everything is more expensive today than it was almost ten years ago when I started. eBay fees have gone up along with everything else and they will keep going up in the future.

Having said that I believe that in the short term eBay has lost pricing power (the ability to raise fees further). This will make it difficult for them to raise fees in the short term without affecting listing volume.  If the changes to eBay are successful in bringing customers back to the platform and if sellers see profits increase, then eBay will regain some of their pricing power –and their ability to raise fees. Basically sellers will go where the profits are.

Fixed Price Listings – It is pretty clear that the trend towards fixed price sales on eBay will continue. The listing fee reduction in the fixed price listing format works well for sellers. Come September 16th when the new schedule goes into effect I will be among those sellers who will launch a lot more fixed price listings. But the auction format will remain strong –and still a big part of eBay. So I don’t really see eBay going all the way towards an Amazon type format –but fixed price sales will continue to be important –especially for media and popular consumer goods.

What else can or will eBay do? My sources tell me that a slight rebound at eBay is already underway. Personally I haven’t seen it as my sales are down. I am still struggling with Best Match and some of the slowdown is clearly a combination of seasonality and the current economic conditions. But overall eBay is seeing some success since they announced the new policies back in February –however, we won’t really know how successful all of the changes will be until we get the results from the 4th quarter of this year which includes the hot Holiday season. So in some respects the jury is still out. My readers know that I have been critical of a few of the new policies –but success is the best way to change my mind. If eBay is correct, and the new policies bring scads of buyers back to the platform, I will be the first one to admit I was wrong.

I have seen all the messages and posts from sellers who claim they are leaving eBay. I don’t get that. The only reason I would leave eBay is if I weren’t making any money. As long as the platform remains a profitable place to do business I will be there. And yes, that includes going through the inevitable ups and downs.

So can the new guy or gal still start a business on eBay and be successful? Of course they can. The only real difference today is that in the old days you could be successful selling just about anything, whereas today you have to be much more selective. That is what niche marketing is all about.

Five years ago I hardly ever mentioned niche marketing. But for the past two or three years I mention it constantly and it features prominently in almost all of my books and training materials.  I firmly believe that until something better comes along, that targeted niche marketing is the way to insure your success on eBay –and on the broader internet for that matter.

So bottom line –all sellers can do right now is work with the system and have some patience.

Skip McGrath

PS: See the link below to Google Snatch 2. This is a great program and is already getting me traffic without advertising, email, gimmicks or pay per click.  Be a little patient as the page is a bit slow to load.

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