Let’s put the cart before the horse:  For the past seven years I have used PayPal to process sales on my website.  I have known for a long time that I was getting what online marketers call Shopping Cart Abandonment.  How did I know this?  Well when I look at my Hitslink analysis program it might show that 17 people hit my Order Page while only 4 or 5 hit my Thank You Page (Where you end up after you pay).

Over time I was seeing abandonment rates of over 50% consistently and often as high as 60% to 70% some of the time.  I always assumed there was something wrong with my order page and I was constantly redesigning and tweaking it.

For the past two years my webmaster has been trying to talk me into trying a shopping cart program called 1Shopingcart.  I finally gave in last April –and wow am I glad I did.

We still use PayPal to process the payments, but now instead of my customers going to PayPal when they pay, they stay on my site on pages that I control. And the results?  My abandonment rate has dropped below 35% and my sales increased overnight by 20% to 30%.

There was another huge benefit as well. Those of you who were in my old affiliate program might remember that we switched lately.  The old program was run by MyAp and was costing me around $500 a month.  Now I have an affilaite program built in to 1Shoppingcart that only costs me about $60 a month –a savings of $440.

1Shoppingcart also has a built-in email program that captures the name of every customer and can also capture names from an opt-in form.  I currently use Aweber for my newsletter email program and am very happy with them.  If all you want is an email list program they are simply the best and the lowest cost.  But if I were just starting out I would probably use the program built into 1Shoppingcart. It comes free with the shopping cart.

1Shoppingcart also works for information sellers. If you sell digital products, they have a secure delivery solution for those too. If you have bought an eBook on my website then you have used 1Shoppingcart

Web Builder

My favorite web builder is fast becoming xSitePro.  This company has been around for a long time and they are very well respected in the industry. They offer a complete “build-it-yourself” website solution that assumes you know absolutely nothing about building websites.

Their designs work for any kind of website, from simple niche affiliate websites, to complex product sales websites. Their training and support are legendary in the industry.

So whether you want to build your first website or you want a fast economical system for constructing multiple websites, check out xSitePro.  If you would like to see xSitePro in action, here is a link to a really cool free webinar.

++++++++++++++++++++++++

Ten, Little Known, Highly Profitable Niche Markets Hiding on eBay.  Anyone can make money with even one of these markets, but you get all ten to try.

eBay overpaid for Skype and they never succeeded in integrating it into the eBay platform. Yet Skype continued to grow and its prospects for the future are excellent. So eBay’s decision to spin Skype off into their own IPO works. Skype will get some initial cash from the IPO and eBay will continue to participate in Skype’s growth and profits. If Skype reaches its full potential eBay will reap great rewards over time –much more than they could have realized by selling it in today’s market.

It is no secret that eBay is hurting. They are losing market share to Amazon and other ecommerce sites. Management is going through an identity crisis; one week they think they are Amazon and the next they want to become Overstock.com. eBay will report earnings tomorrow and I don’t think it will be pretty.  Some analysts forecast that eBay marketplaces will be down 20% or more. But, the brightest star in the eBay, Inc. holdings is PayPal.  Yes, PayPal has some detractors, but the problems I see with PayPal are minor. In fact, if eBay Marketplaces were as well managed as PayPal they would not be struggling today.

It makes sense to spin PayPal off into an IPO for the same reasons that Skype did. Freed of the eBay encumbrance, PayPal can continue to grow and increase market share in the online payments industry where they now account for almost 10% of all online transactions.

A PayPal IPO would increase shareholder value and allow eBay to concentrate on their core business – providing online platforms such as eBay and the various classified sites where buyers and sellers can come together. And PayPal would be free of eBay’s constraints where other online companies would not see them as a competitor. This would also be a good move for eBay sellers. eBay could now focus exclusively on repairing and growing the marketplace.

Skip McGrath

See Also

• How to Make Good Money Selling Used Books on eBay, Amazon and The Internet
  Easy, low cost, low risk business that anyone can do. Great recession proof business.

The last few parts of the announcements include a new dispute resolution process, free access to eBay Selling Manager, moving the shipping process from PayPal to eBay and tools to bulk edit your listings.

The new Dispute Resolution Process will be the most controversial, because it puts eBay between the seller and the buyer. Other changes I am trying to confirm include removing the eBay seller’s location from the listings and removing the date that a seller joined eBay. Personally I think buyers like knowing if a seller started selling last week, last year or ten years ago.

I will be commenting more on the personality change eBay is going through over the next few days so stay tuned.

Also I am now on Twitter. If you would like to follow me on Twitter, I will send you a tweet whenever I do a blog post.  Here is my Twitter Profile Page: http://twitter.com/Skip_McGrath

So that concludes our review of the new policies.  You really do need to read all of them which is why I provided the active links. Of course we still won’t know all of the details until they actually roll out in June, but I really give eBay credit for giving us this 60-day lead time to prepare.

As you can see I gave eBay a star rating (on a scale of 1-5) just like their DSR system. So what is the total for all the policies overall?  It comes out to  3.7

Overall these changes are a big positive for sellers but there are two big disappointments.

1. It is pretty clear that eBay has permanently abandoned the level playing field concept. They have been favoring the mega sellers for some time now which is interesting because these guys are the least loyal of all the sellers and are all selling on other platforms. I don’t really have a problem with eBay giving fee discounts to large volume sellers. After all, you can get discounts for almost anything you buy in volume anywhere. But I don’t like the idea that large sellers get prominent placement and special promotions that the rest of us don’t get. If eBay is really into driving buyer satisfaction then give anyone who provides a stellar buyer experience the breaks regardless of their size or volume of listings.

2. The new dispute resolution process is another turn in the road that leaves the concept of community behind. eBay was founded on the idea of providing a marketplace where buyers and sellers could come together to do business with each other. Sellers were encouraged to brand their business and build an online personality through their feedback, their About Me pages, eBay store branding and on the forums and features like Guides and Reviews. With these changes and more changes planned for the Fall of 2009 eBay will cease being the provider of a marketplace to become the marketplace itself.

This is so strange because the rest of the online universe seems to be going in the other direction with platforms like Twitter, Facebook and My Space.  Social networking is the fastest growing phenomena extant today. While people are seeking more connections and more interaction, eBay has decided to depersonalize the buying experience and isolate the seller from the buyer.  Ina Steiner has already reported in AuctionBytes about the Certified Seller program now under study and the fact that eBay will soon restrict sellers from cross selling during the checkout process.  I predict that the next steps will be total control of the communications. All email will go through eBay and sellers will have no way to let buyers know their email address or learn of the buyers.  In the longer term, eBay could even get into warehousing. Sellers would have to ship all their goods to an eBay owned and operated warehouse. When a sale is made, eBay would ship the goods so the seller wouldn’t even know the buyers name or address.

See Also

• Learn How To Create and Sell Information Products on eBay and The Internet
  Do you have an idea for an eBook, video or webinar. We show you how to create any info product and sell it on eBay and other sites

eBay and ProPay announced their deal for eBay sellers that will take effect next week. Starting next week, Silver, Gold, Platinum and Titanium eBay Power Sellers can sign up for ProPay and integrate ProPay into their eBay business much like they now do with PayPal.

The rates will be similar to PayPal: 30-cent transaction fee plus 2.7% for Silver Power Sellers and 2.4% for Gold and Platinum. eBay Titanium Power Sellers will be given special rates (Why am I not surprised?). Bronze Power Sellers will be “invited” to join the program sometime next year.

Rather than rewrite all the details, if you want to understand the ProPay (ProPal?) deal, Ina Steiner at AuctionBytes has done her usual thorough and excellent analysis of the eBay and ProPay announcement. There is some important information in her report, so please click here to read the whole story.

I am going to confine myself to some observations.

Disadvantages

• The rates  are about the same so there is no cost advantage
• You now have two services to deal with instead of just one
• We already have a merchant CC account as many larger sellers do and their rates are about the same as ProPal, plus I get a machine for procession offline or telephone transactions

Advantages

• One advantage I see to joining ProPal is to help the occasional buyer out who does not have a PayPal account or those who have a PayPal account and don’t want to use it for some reason. We get a lot of this around Christmas. A wife wants to buy something for her hubby and doesn’t want him to see it on the PayPal account.
• When you have an unhappy customer they have to sue the credit card charge back system. This is slightly better –and a little more in your favor than PayPal. If you sell the type of goods subject to a lot of returns this could be a big advantage, but for most sellers like us, it doesn’t add up to much.

Stay tuned for more. eBay said they are currently working with several other payment processors and will announce those in January. For me, I am going to take a pass for now and see how this all plays out. If I have leaned one thing being on eBay, don’t rush into new services until they have had some time to percolate on the site.  Jumping right into ProPay now, would be like taking a cake out of the oven five minutes before it’s finished baking. It will still be a little soft and mushy in the middle.  I also want to see what the other services will be and how PayPal integrates with PayMeLater whom they just purchased.

Until next time

Skip McGrath

See Also

• Could the Best Online Business Actually be an Off Line Business
  Free membership site lets you take a look at a new business concept using your online skills to help offline businesses
• The Complete eBay Marketing System – Revised and updated September 2008
  Complete eBay training course by Skip McGrath, an eBay Power Seller who sells on eBay every day. Printed Manuals and CDs.

Here is a great little free tool for eBay sellers. It is an online calculator that calculates eBay and PayPal fees to help you decide the best price and format to list an item on eBay.  If you are running an eBay business this is a great little tool to help you figure out the best price to start and item and the most efficient selling format.

Here is the link:

http://www.newlifeauctions.com/calc.html

This tool shows you all of the fees for the different formats and even allows you to set your power seller discount. It not only calculates your fees, it also shows you how much profit you will make on the item.

If you just want a simple fee tool. Here is another one. It is a little faster to use but I like the additional information in the New Life Auctions tool more.

http://home.alltel.net/micrep/fees.html

So if you just sell on eBay occasionally or you run a full time eBay business, try this great free tool to help you control your eBay fees.

See Also

• Learn How To Run a Profitable eBay Business with the 2008 Edition of The Complete eBay Marketing System
  Printed workbook and complete training course by a successful power seller who sells on eBay every day
• Learn How To Make Good Money Creating and Selling Legitimate Information Products on eBay and The Internet
  Forget resale rights and cheap 99-cent eBooks. This system shows you how to create real information products that actually make money

In the early days of eBay when PayPal was growing like wildfire, most of our business was via personal check or money order. In those days trust was still a big issue and controls on fraud were minimal.  Since then both eBay and the internet has changed dramatically.  PayPal became dominant on eBay so much that eBay had to scrap their own payment system and ended up purchasing PayPal. Today PayPal has 90 million users and goes well beyond eBay. PayPal is now used by thousands of websites, and major companies like Jet Blue have adopted it. In fact one of our dentists here in town has a little sign on his counter that he takes PayPal.

Nevertheless sellers were perplexed when eBay announced that starting in October, all payment on eBay (with a few exceptions including eBay motors and most Business & Industrial categories) would have to be electronic. Some sellers thought this meant PayPal-only, but that is not the case. You will be allowed to use PayPal, ProPay, your own merchant credit card account and eBay has indicated that some additional payment systems will also be allowed in the future. (However Google checkout and Amazon payments will not be allowed as they are direct competitors of eBay/PayPal)

Here is part of eBay’s reasoning behind the decision:

"Expectations for shopping and paying online have evolved since eBay was founded. People want consistent, secure and fast transactions. Offline payment methods are no longer suitable for online transactions. This opinion is shared by law enforcement and the financial services industry. The vast majority of ecommerce shoppers, including eBay buyers, now use online payment methods. On eBay.com over 90% of transactions are paid with online payment methods and the use of offline paper methods has declined by 40% over the last 3 years.

Today, items paid with check or money order are 80% more likely to result in an item not received (INR) than those paid with credit card or PayPal. Also, buyers who pay with check or money order are 50% more likely to leave negative feedback than those who pay with electronic methods. So starting in late October, 2008, we are moving to 100% electronic payments – credit cards, ProPay, or PayPal.”

OK – I have to take eBay at their word when they state: “… items paid with check or money order are 80% more likely to result in an item not received (INR) than those paid with credit card or PayPal. Also, buyers who pay with check or money order are 50% more likely to leave negative feedback than those who pay with electronic methods.” But after 9+ years on eBay, we have only had two bad checks and both of them were eventually made good –and neither of them resulted in a negative feedback.  If you look on the eBay message boards many sellers are saying the same thing. 

I know a lot of people like to attach devious motives to eBay’s every move, but I also know there is still an awful lot of fraud on the site. The amount of fraud is not nearly as bad as the media and some pundits make it out to be. But the problem with fraud is that it not only affects each person who is victimized –but those folks tell 10 or 20 other people about it and it spreads.  So, within reason, I do support any steps eBay takes to reduce fraud.  When someone has a bad experience on eBay and tells all of their friends and co-workers, that hurts all of us because it reduces traffic to the platform.

Now what does this policy really mean to sellers?  In our eBay business we close about 200 successful transactions per month and about the same number from Amazon and our three websites.  Out of those 400+ transactions per month, we receive between 5-10  checks or money orders. We also get about a dozen people per month who call us on the phone and give us their credit card information because they are afraid to do it on the internet.  This is more true on our web site sales than on eBay –but we still get at least one person per week from an eBay sale who wants to give us a credit card manually rather than do it online.

I honestly don’t know if our experience is typical. It is well known that fraud is highly category specific. There is more fraud in some categories than others. We sell in the Home & Garden, Photographic equipment, Books and the Collectibles categories and personally I see very little fraud and have very few non-paying bidders.  When I talk to other sellers it seems that there is more fraud in the consumer electronics, computers, software and video game categories. The other area where there used to be a lot of fraud was the information category –but that is pretty much gone with eBay eliminating electronically delivered information products. (No more 99-cent eBooks)

Interestingly, fraudulent money orders are a much greater problem than personal checks. Whenever I receive a money order for any large amount, I cash it at the bank or post office first before I ship. The other area where you see a lot of fraud is in certified bank checks.  It is easy to counterfeit a certified check. The problem is that you deposit it and the bank immediately credits your account. So you ship that expensive antique or collectible and two weeks later your bank calls you and says “sorry but that certified check you deposited was a counterfeit, so we are debiting your account.”

When the policy goes into effect you will no longer be allowed to mention anywhere in your listings or post-sale emails that you accept any type of offline payment. In their FAQs, eBay addresses the issue of the buyer who contacts you and insists. eBay says they will allow this on an exception basis as long as it isn’t abused. The one unknown is if eBay will allow folks to call you and give a credit card over the phone. I have asked that question to eBay but they haven’t gotten back to me on it yet.

The bottom line on this policy is that yes –you may lose the occasional sale –and yes some buyers who refuse to use online payment methods may not choose to buy on eBay. But in the long run I don’t see electronic-only payments as a huge negative for sellers and it could be a positive if it does indeed reduce fraud and UPI issues.

Blog Update

Shortly after posting this blog, I heard back from eBay and they will allow sellers to take credit card information from buyers over the phone and enter it manually. You can do this with PayPal’s virtual terminal or your own merchant credit card account.

See Also

• The Complete eBay Marketing System updated for 2008
  Start, build and run a professional eBay Business. All buyers will receive a special report updating the new eBay rules to be published on September 5th, 2008

The new requirement was mandated by The Housing and Economic Recovery Act of 2008 recently passed by Congress. President Bush signed the bill into law on July 30. The bill and applies to all payment providers but PayPal negotiated with the IRS to only provide information on sellers who receive more than $20,000 or more than 200 completed payments in any one calendar year.

I am not sure what sharing payment information has to do with Housing and Economic Recovery –this is typical of congress –sneak ways to collect more money into bills that have nothing to do with the subject. The White House said they were against the measure but they couldn’t veto it without vetoing the rest of the bill which was needed to help the housing and mortgage crisis.

If you are running a legitimate business and claiming your income and paying your taxes, this bill doesn’t really matter. Anyone making $20,000 a year should be doing this anyway. The problem is that the IRS will have data that won’t naturally match your claimed income.  So PayPal will send one number to the IRS and when you do your taxes, you claim a different number. That will trigger a request from the IRS to explain the difference.

Sellers who are not claiming their income will have to start doing so, but I suspect the number of those is a lot smaller than the IRS thinks.  All in all this will be a big paperwork mess that won’t result in any additional income to the government.  I am all of the government going after tax cheats –but why do they do it in such a way to cause the rest of us grief.

See Also

• The Complete eBay Marketing System by eBay Power Seller, Skip McGrath
  Updated for 2008. Complete eBay selling and marketing system – printed manual

If you saw my post yesterday you know that I am no fan of the new feedback policy that stipulates that sellers can only leave positive feedback for buyers.  Apparently a lot of eBay sellers agree. Take a look at the Feedback Message board.

The posts are coming in so fast that if you post, your post gets buried immediately by other posts.  I did a post this morning on my proposal (outlined in yesterday’s blog) and it was immediately buried. If you would like to read it here is the link to my post. I hope some of post a reply with your ideas and comments.

Buried in the eBay announcement was also some good news about the feedback system. Here is a summary of all the changes to feedback and how I feel about each one. The comments in red italics are mine

• Buyers will only be able to receive positive Feedback. The elimination of true mutual feedback completely changes the culture of eBay for the worse.
• Positive repeat customer Feedback will count (up to 1 Feedback from the same buyer per week.)  This is good for sellers who get repeat business.  
• Feedback more than 12-months old won’t count towards your Feedback percentage. I have mixed feelings about this one.  Everyone should get a chance to rebuild and fix their mistakes, but isn’t getting more good feedback to raise your percentage the point?
• When a buyer doesn’t respond to the Unpaid Item (UPI) process the negative or neutral Feedback they have left for that transaction will be removed. Excellent and long overdue.  Sellers have been asking for this for years.
• When a member is suspended, all their negative and neutral Feedback Left will be removed. This is good, but what is not clear is what happens to their received feedback. Is that removed too?  This ties into the 12 month rule. If a seller was suspended for a year then he starts over with 100% feedback.  :-)
• Buyers must wait 3 days before leaving negative or neutral Feedback for sellers with an established track record, to encourage communication. Great move – I like it.  :-)
• All Feedback must be left within 60 days (compared to 90 days today) of listing end to encourage timely Feedback and discourage abuse. Why not 15 or 30 days?
• Buyers will be held more accountable when sellers report an unpaid item or commit other policy violations.  I wish it said how they will be held more accountable. ???

So there is some good news mixed in with the bad.  Some other nice things that happened is that PayPal will also give you seller protection when goods are shipped to any address –not just the confirmed address as long as the buyer puts that address into his PayPal account.

As for the Feedback Issue –All is not lost. eBay has backtracked and changed position before.  Keep complaining, post on the boards, in your blogs and to other blogs.  All is not lost.

See Also

• FREE eBay Income Product Reviews
  This is where I review and recommend various eBay and internet programs, tools and services to help sellers make money

BEFORE I GET STARTED –ONE ANNOUNCEMENT: eBay has a Value Pack bundle of listing upgrades for 25¢ during this 1-day special offer today only. Value Pack gives you 3 listing upgrades for 1 price, and includes Gallery, Subtitle and Listing Designer. Get all three of these upgrades for less than the regular price of Gallery alone for listings launched today, April 11.

Fake and counterfeit merchandise is a problem on eBay, but it is a tiny percentage of millions of legitimate sales that take place every day on eBay.  Eighty million members believe eBay is a safe place to trade. Among these are millions of people who routinely buy and sell art, antiques and collectibles.  Although hot consumer products are sold by mega-PowerSellers on eBay every day, the categories of used merchandise, art, antiques and collectibles is the purview of the small eBay seller. These people (like you and I) are the heart of the eBay marketplace.

As I pointed out yesterday although fakes are a small percentage of the goods sold on eBay they are a problem.  This week eBay announced a new proactive initiative to combat fakes. eBay has identified several categories of merchandise where fakes are a problem. (They are keeping those a secret so scammers can’t outwit them in advance). When you list an item in those categories, you listing will be delayed for some period of time –probably 6 to 12 hours, which will give eBay time to look at the listings and remove those where it suspects fraud or counterfeit goods. You can read the entire announcement from Rob Chestnut, head of Trust and Safety here.

As part of this effort eBay has dedicated more people and resources to this effort. In addition to canceling auctions eBay is also working closely with federal and state authorities to put some of these people in jail.  Will this stop the scammers –probably not.  There will always be some level of fraud on eBay as there is on many other internet sites. Fraud exists in all facets of our society.  You can buy fake goods in stores and malls, by email offers, or on the streets of most major cities.  If you go to a Flea market and find someone selling Prada handbags for $90, do you really think they are genuine?

The answer to preventing fraud on eBay is stricter identification and verification for sellers and requiring sellers of goods in categories that are subject to fraud to be a PayPal verified seller before they can list certain items.

The steps to prevent being a victim of fraud include:

• Only buy expensive items from a PayPal verified seller and use PayPal to pay. This entitles you to eBay’s $2000 fraud protection program
• Don’t buy expensive items from newly registered sellers
• Look at a seller’s feedback to see how it was generated. Was it earned from buying lots of cheap items in a short period of time. If so be careful.
• If a seller demands cash or money orders and will not take PayPal or credit cards be very careful.

The vast majority of eBay sellers are legitimate and will have no problem meeting the above steps. The other thing you can do is report auctions that you think are suspicious.  At the bottom of every auction listing on eBay is a link that says Report This Auction.  Just click on the link and follow the prompts if you see an auction for goods that you think may not be real. Getting rid of the fraudulent sellers is good for all of us.  Who knows, maybe even Kim Komando will come back and buy something some day.

See Also

• Ten Little Known, Highly Profitable eBay Niche Businesses Anyone Can Do
  Ten little profitable niche markets hiding on eBay

BidPay. Everyone’s heard of them. But did you know that they are completely different from their pre- June 2006 existence? BidPay was purchased by CyberSource which is one of the biggest global credit card payment service providers. CyberSource is a well established company with an excellent fraud protection, risk assessment backend infrastructure. And unlike the old BidPay, you can see instantly when an item has been paid, and you don’t have to wait for a money order in the mail.

Now BidPay accepts both MasterCard and Visa and the payment is sent directly to your bank account. It takes 1-3 days to get there, but you can see as soon as the payment has been made and can ship the item. So it’s just as fast as PayPal in that respect (faster when you consider most buyers use their bank account and often end up sending an eCheck).

The fees are comparable too. PayPal is a little cheaper for domestic items under $50 and international payments under $20, but for anything over that, BidPay gets significantly cheaper. Their fees are much easier to understand too: 2.5% plus 50 cents for domestic, 2.9% plus 50 cents for international. How much easier can it get?

This all aside, the thing I like most about BidPay is how they handle disputes. They assume the risk of the funds (unlike PayPal) so if there is an issue, they investigate it far more than PayPal. I like that. Some sellers I have talked to feel  like the odds can be stacked against them if a buyer files a claim with PayPal. Not so with BidPay and their chargeback protection.

Also, a BidPay survey earlier this year suggests that sellers who offered BidPay on their auctions realized a 15.4% increase in sales. Now of course this came from BidPay, but all of the numbers about PayPal come straight from that company too and we accept them. Even if it is a little lower, it’s still an increase and worth capitalizing on.

In my opinion, BidPay is the only viable competitor to PayPal. And the neat thing is they are becoming more and more competitive every day. They have some great new features which will be rolled out later this year, so keep tuned for more information on that.

My advice? Offer both BidPay and PayPal on your listings. It costs you nothing to offer both, and then you can let the buyers decide which they prefer.

See Also

• The Complete eBay Marketing System by Skip McGrath
  Learn how to become a successful eBay seller from an established PowerSeller
• The New BidPay
  An alternative credit card processing company for eBay sellers