I am all about eBay and making my living from online businesses, but I want to tell my readers about something I have been working on for a while with my good friend Jim Cockrum. We work together on Jim’s Silent Team Membership Site. This is a new program that Jim and internet wizard Andrew Cavanagh put together to help folks like us make some good extra money.  It’s called OffLineBizToday.

Do you have basic internet skills? If so a new proven program could generate up to $1500 a day? Do you sell on eBay or from a website? Can you follow simple instructions to set up a basic website? Do you have basic writing skills? 

If you can answer yes to these questions, they you may want to look at this new free trial membership program.

One of the reasons I like this program is that Jim has set it up so you can look into it and try it without risking any money. And, everything is online. There are no eBooks to buy.

I know this is not for everyone, but if you have some basic skills, OffLineBizToday shows you how you can help local businesses.  This program has been in design for a while and Jim actually tested it with his silent team members and it is working great.

FREE Short Audio and Free Trial Membership at http://www.offlinebiztoday.com/

Don’t worry. There is no spamming involved. No cold calling. No multi-level marketing or recruiting. This is just a simple business where you can take some very basic internet skills and help local businesses like restaurants, gift shops, kitchen stores, contractors, dog groomers, interior decorators and others build their business with simple internet skills –and best of all, you don’t have to do most of the work. You can outsource it.

Best of all you don’t have to buy anything to see how this works. Jim has set up a free membership site where you can see videos and join a forum to see and discuss with others how this works. It’s a members-only forum –but right now you can have a free trial membership with no upfront money and you don’t have to give up your credit card info to get in.

I have actually done a smaller version of this in my local community and my son even did this for some local businesses when he was still a teenager. But Jim (and his partner Andrew) take this to a new level and best of all they simplify it.

Now, I am not talking about free money. You will have to do some work.  How much is up to you. If you just want to make an extra few hundred dollars a week, you can do that in a few hours. Work more and you can earn $1000 to $1500 a week.  I know that isn’t getting wealthy –but you can still do this even if you have a full time job.

This is NOT for total internet beginners.  You will need some basic skills. But if you know how to launch auctions on eBay (write descriptions, upload photos, process payments, etc.) and if you have simple basic writing skills then you can probably do this.  Take a listen to the short free audios and read the message board posts at http://www.offlinebiztoday.com/.   If you feel it is not your cup of tea, you will have wasted a few minutes. But if it intrigues you dive right in.

eBay created eBay Motors for two reasons. The motors category was large enough –billions of dollars in sales, to work as a standalone business.  Secondly, given the high cost of automobiles relative to other products on the site, the traditional final value fee schedule just wasn’t workable.  So it made good business sense to break motors off to its own marketplace.

If you look at all the stress eBay and eBay sellers have been under for the past two years or so, it is mostly the result of competition from Amazon and other sites that has caused eBay to rethink their business model and move from a trading site to a shopping site. There are already two eBay’s today.

1. The old eBay where ordinary people buy and sell art, antiques, collectibles, vintage items, used merchandise, used books, CDs and DVDs, and handmade arts, crafts and other goods.  Mixed in with this are sellers selling new merchandise in small specialty niches.

2. The new eBay (or what eBay hopes to be) is a shopping portal for new consumer merchandise such as digital cameras, consumer electronics, computers, games, music and movies, house wares and name brand apparel and accessories.

The problem with these two very distinct eBays is that they are mixed together on the same platform.

The old eBay had its quirks but buyers quickly figured them out and came to love the site. The old eBay probably had more loyal shoppers than any other brand in history.

The new eBay was attracting more and more first-time buyers who didn’t really understand the site and how it worked –and these new products were responsible for most of the fraud.  After all, a $2000 Plasma TV or a $300 game player is more likely to attract fraudsters than a Great Horned Owl Coffee Mug for $12.95.

The new eBay was spending millions of dollars on keyword advertising, direct mail, Television and their affiliate program to attract new buyers to the site –and most of the action was in new merchandise.

The big boys also wanted a piece of the action and soon there were huge sellers listings thousands of items each –many of them earning fees for eBay in the millions of dollars per year.  Suddenly the small seller with their quirks became a pain in the butt for eBay.  Why spend money on a support organization to support 700,000 small sellers, when the top 10,000 of those sellers did 80% of the business and earned eBay 80% of their profits. And the big sellers were demanding special treatment and lower fees than the little guys got. eBay eventually caved in.

Yet, eBay couldn’t completely ignore the small sellers. After all the real appeal of eBay is the wide variety of merchandise.  It became known in the marketplace that “you could find anything on eBay.” And, the hundreds of thousands of small sellers still generated millions of dollars in fee income and PayPal fees.

So that is where we are today.  eBay sellers can gnash their teeth all they want, but the old eBay ain’t never coming back. However, a version of it could, if eBay would make the right moves. 

What has gone on for the past two years reminds me of the early days when PayPal was a separate company.  Almost everyone on eBay was using PayPal. It was at one point actually growing faster than eBay. Rather than doing what the buyers and sellers wanted and simply buying PayPal, eBay decided to create their own payment system with Wells Fargo Bank called BillPoint. It was slow, expensive and complicated. Both buyers and sellers hated it.  It took eBay two years to realize defeat. They euthanized BillPoint in 2002 and purchased PayPal for $1.5 Billion –about a Billion dollars more than they could have two years earlier.

There is a parallel here. The market always wins. The best thing eBay can do is admit defeat.  You can’t really run two vastly different business models on the same platform with different types of buyers and sellers, the same rules, the same search technology and the same support organization.  It’s akin to Gucci setting up a kiosk in a Wal-Mart.

I believe it’s time to split eBay into two parts:

eBay.com would be the home of the traditional eBay. This would be the place where buyers and sellers of new and used unique merchandise came together. Some of the new rules could be unwound and eBay.com could go back to being a community instead of an Amazon.com lookalike. No stores, no fixed price listings –just auctions and traditional buy-it-now (where BIN disappears once a bid is placed), second chance offers and make best offer would be the only selling format. eBay could set up procedures to prevent fraud such as requiring ID Verification and a verified bank account for anyone offering expensive items (over $1000).

eBayShopping.com (or some other suitable name) would be the place where the professional sellers, big box stores and other large merchants could go to list new merchandise and popular consumer goods. eBay could allow small sellers to play on that field too –but they would know there are different rules going in.

eBay sellers could operate on both sites. For example if you sold essentially new sports cards and memorabilia you may want to list your fixed price goods on eBayShopping.com and list your more collectible and vintage items on eBay.com.

And the sites could be linked –much the way eBay motors is linked to eBay. Both sites could have a search tab that would take you to listings on the other site –but the search results would be separate.

There are now dozens of alternative auction sites all vying to attract the traditional eBay user. So far none of them has made a serious dent but it is starting to look like a PacMan game.  eBay is being nibbled at around the edges by all of these little players.  Eventually one of these alternative sites will gain traction and eBay could see a big chunk of those 700,000 small independent sellers finding a new home.

Until next time,

Skip McGrath

Come Monday there either will, or will not, be a bailout bill.

I have heard both Democratic and Republican congressmen on TV reporting that calls from the people in their districts are running as high as 5 to 1 against a Wall Street bailout with taxpayer’s money.

There are two parts to this crisis and two solutions that require very little, if any, taxpayer money:

Problem Number 1: There are several million foreclosed houses on the market that are depressing real estate values and new home construction and sales. 

This has had a cascading effect on jobs and the economy and the value of all the mortgages held by institutions –even the vast majority of good ones.

Solution:  Congress could pass a simple tax bill that said anyone buying a home out of foreclosure would not have to pay any capital gain on the sale of that house. If you wanted to take it one step further, the Congress could sweeten the deal by offering a one-time $5,000 tax credit towards any money spent in the first year on repairs or improvements to the property.

Remember, money hasn’t dried up; Credit, and the willingness to take risk, has dried up. Offering this tax break would bring billions of dollars worth of investment capital out of the woodwork and attract investment dollars from overseas wealth funds that now hold trillions of US dollars they can’t make any money on.

You would have everyone from small independent house flippers to massive Real Estate Investment Trusts and overseas investors buying up the distressed property. Buying these now empty homes would increase value of both those properties, and the neighboring properties, and take a ton of excess inventory off of the market. This would restart sales of existing homes and new home construction. Home prices would immediately stabilize and once again start to rise.

The cost to the taxpayers in lost revenue from the capital gains taxes would be more than offset by people paying taxes as the economy improves and people go back to work –including the construction industry which has shed over 2 million jobs in the past two years.

Problem Number 2: Banks, S&Ls and other investors are holding Trillions of Dollars worth of mortgages that they can’t sell because they can’t set a value on them.

This has caused business credit to dry up. And when that happens, personal credit will start to dry up shortly thereafter. That will send the economy into a deep recession that will cost millions of jobs.

It would take three pages to explain how this happened, but is was the perfect storm of Wall Street and investor greed, incompetence, fraud and self-serving corrupt politicians from both parties.  There will be plenty of time to investigate and assign blame –and that will happen. But we have to do something now to prevent a financial meltdown.

Solution:  Create a public Exchange Traded Fund (ETF) to buy the mortgage paper.  ETF’s are mutual funds that trade daily on the stock market.  There are several ways to get this fund started. The Treasury or the Fed could offer insurance, much like MGIC (Mortgage Guarantee Insurance Corporation) on the mortgages.  Or the fund could be set up as tax free.  Any and all investors, foreign or domestic, could invest in the fund and pay no (or less) taxes on any profits or dividend distributions.  An insured tax-free fund would attract billions of dollars of investment capital into the funds.  Banks could sell their mortgage paper to the funds, or use the fund's valuation to put a value on their securities. This would allow banks to improve their reserves and balance sheets and give depositors confidence.

What does all this mean to eBay sellers?

Simply put –we are part of the economy too.  Last year about 50% of my eBay sales were paid with a credit card. As I pointed out above, when business credit dries up consumer credit soon follows.  Credit card rates will increase leaving less money to spend on the goods and services people use credit cards for.  Unemployment will increase.  People will still buy the basics: food, clothing, gas and health care. But the market for discretionary consumer goods will collapse. This has already started.  Last week, the largest boat dealer in the Pacific Northwest went bankrupt.

However, a $700 Billion (or more?) bailout using taxpayer money will have the same effect. This will be hugely inflationary.  The only way the Federal Reserve can come up with $700 Billion is to print it. That causes inflation. When you have inflation, interest rates, including mortgage rates, will rise and the value of the dollar will fall. This will reduce consumer purchasing power, kill jobs and reduce investment money from overseas.  The stock market will initially jump on news of the bailout, but then it will begin to fall as interest rates rise and the economy tanks.  Any gains will be short-lived. 

If private capital is used instead of taxpayer funds, money will pour into our financial markets and they will stabilize. Inflation will remain under control and interest rates will remain low. We may still have a slowdown, or even a mild recession, but a long-lasting major recession will be avoided.

But, I suspect, that congress will do the political thing rather than the correct thing. There will be some type of bill.  To the extent it uses taxpayer money it will have a negative effect.

One way or the other, eBay sellers who deal in impulse products, or unnecessary consumer goods, will be hurt the most.  Sellers of used items and basic consumer goods will not only be OK --they may actually do well as demand for these goods increase. 

The focus for the future of eBay will be on bargain hunters and folks looking to save money on goods they need rather than goods they want --or would be nice to have. The other area that could do well is any type of hard asset or stable collectible such as stamps and coins and collectibles with a long history of holding their value. When inflation and recession loom, and in times of uncertainty, people with money look for safe places to put it.

So, depending on how things look a week from now, you may want to take a look at your business with an eye towards the future. In the meantime, call or email your congressperson and let them know how you feel about them spending your money to bail out Wall Street and their political cronies.

Recently I have received email from sellers who have run afoul of eBay's aggressive actions to limit the sale of counterfeit merchandise on eBay.  Several sellers have had their auctions cancelled even though they were selling legitimate merchandise. Compounding the situation, when they contact eBay for help, eBay refuses to tell them what they are doing wrong for "security reasons."

Several months ago, eBay made an announcement that they would become more proactive to combat counterfeits.  In the statement eBay said they would take the following actions:

- Proactively removing suspicious items
- Removing items reported as counterfeit by brand owners
- Working closely with law enforcement to prosecute offenders
- Enforcing selling limits on items favored by counterfeiters
- Restricting seller activity in certain categories
- Providing free tools for rights owners to efficiently identify an
  report items to us for immediate removal

At that time eBay said they would place "restrictions" on sellers who could sell famous name designer goods, but they were never clear what the restrictions were or how sellers with legitimate goods could go about selling.  One policy was to require sellers of these goods to be PayPal verified and to link their eBay user ID with their PayPal account.  eBay also hinted that the number of listings of these goods would be restricted.

They also announced seller restrictions:

• Site activity such as selling, bidding, and communication with other eBay members using Contact eBay Member or Ask Seller a Question may be limited in order to maintain safety in the marketplace.

• eBay may require a seller to be registered for a period of time in order to sell certain types of items or volume of items. This is especially true in efforts to help limit the listing of items that are reportedly favored by counterfeiters.

• For certain types of items that are reportedly favored by counterfeiters, sellers might not be able to list using one-day or three-day auctions.

• Sellers are required to meet a certain level of buyer satisfaction. If buyer satisfaction falls below expectations, a seller’s activity may be limited or the seller’s account may be restricted or suspended.

As you can see these policies are quite vague and have introduced a lot of uncertainty into the marketplace.  I wonder if that is what eBay is trying to do. By introducing fear, uncertainty and doubt, a lot of sellers will just give up trying to sell these goods, leaving the market to a few big sellers who eBay knows are not selling fake goods.

It is not just new merchandise that is being affected. The policy is also affecting sellers of vintage items. You might think if you picked up a great used Hermes handbag at a thrift shop or a pair of Ferrogamos at a garage sale, you would be OK --but that is not the case.  Here is a posting by a seller of vintage fashion good that outlines the problem pretty well. This seller has been selling on eBay for over ten years and has excellent feedback and DSR scores:

The subject of totally arbitrary eBay seller account restrictions in response to designer listings came up on the Vintage Fashion Guild; I'm cutting and pasting the excellent advice of a member who sells lots of designer vintage stuff:

"Yes, everyone has a magical secret limit on designer goods. The list of exactly what constitutes a designer name is secret --- but it does include ridiculous things like Gap, Ann Taylor etc. And every seller's limit is different --- and can change at a moment's notice without eBay letting you know. That is, until you try to list one of the secret items or revise an existing item.

Yes, if you revise an existing designer listing, eBay counts that as a new listing. So say if your Gucci limit is one item and you already have one listed, if you go in and try to revise it, eBay will no longer allow it to be listed. The reason people are seeing this more often is ebay has recently dramatically decreased the number of designer items most sellers can sell --- even when you have a proven track record of selling authentic goods. They have essentially put many long term sellers out of business. This is no doubt in response to the LVMH suit, but the great irony is that new sellers can pretty much list as many fakes as they want with abandon. ebay is randomly targeting mass numbers of established sellers.

SOMETIMES you can get the restriction listed, but it pretty much depends on who handles your request on any given day. First of all, make sure your PayPal account is linked to that eBay account. This is imperative. I cannot stress that enough. Next, if you are a Powerseller, contact Power Seller Support. If you are not a Powerseller, go directly through regular support (rswebhelp@ebay.com). In either instance, expect a delay of up to two weeks for a response. Keep nagging. Some sellers have been successful with having the limits lifted but it takes a proven track record, having PayPal linked, and dogged persistence.

This is an example of a template that has been used by and proven successful with several designer sellers in some of the private groups I belong to.

(Make sure to put your seller ID at the top of the email because eBay reps are stoopid).

Dear Powerseller/ebay Support.

I recently received a notice that I have been placed on restriction from listing certain items.

I have been a member of eBay since (month and year) and have a long and positive selling history. My feedback is (feedback number), with a Y% rating.

I have never sold counterfeit merchandise.

I do not condone the sale of counterfeit merchandise.

All of my merchandise is authentic.

Please lift the limitations so that I may carry on with listing my authentic merchandise.

If you have any questions regarding my account or this issue, please feel free to contact me via phone at (phone number.)

Thank you for your prompt attention to this matter.

Your Name

Your Seller ID"

We used to sell designer merchandise and gave it up a couple of years ago. Now I am as convinced as ever that we made the right decision. 

In my last post I reported that 48 hours after eBay launched the new Fixed Price (FP) listing format and fees that eBay's listings had hardly budged.  Now 5 days later, listings have climbed from around 16 million to 18.35 million, according to the eBay listing tracking service at Medved.net.

Medved tracks auction counts and sell through rates on eBay.  I also looked at sell through rates (STRs).  Since the new format started earlier this week, the total eBay sell through rate is down about 2%.  However this is not that significant and STRs change based on the days of the week.  We will have to wait a few days to compare Sunday to Sunday and Monday to Monday --typically the two biggest selling days of the week.

As I mentioned in my last post, a likely reason for the slow takeoff was the last of automated seller tools.  I haven't checked today, but as of a day ago, eBay's Turbo Lister was not yet updated with tools to use the new 30-day and GTC format.  I use Vendio, a service used by thousands of power sellers.  Their system was updated, but my sales manager edition was pretty clumsy and convoluted to use.  Basically I had to open each inventory item, click on the eBay site specifics, select the GTC option, save the edits, save the file and then launch the FP listing.  Then I had to go back into each listing and undo and save my changes, so I could launch those items as ordinary auctions. 

I only have about 100 different inventory items and this took a couple of hours of work.  I can't imagine what eBay sellers who have thousands of items are going through.

I don't know what the situation is at other popular auction management companies such as Auctiva, MarketWorks, Channel Advisor and InkFrog.

My FP listings have only been up for about 24 hours --and so far no sales, but i would expect that.  I am really anxious to see how they do after a week or so. I did the math and if just 22% of my listings make at least one sale per month, then I will be ahead of the game on fees.  eBay's historic STR on Buy-it-now sales is around 20%, so I am hopeful this will work out.  If I were to get a 25% or higher rate then the new format will work well for me.  Of course this is very product and price dependent. As an eBay seller, you need to run the numbers for your product, your category and your DSR discount.

According to Medved –a company that tracks eBay listings, the number of Fixed Price (FP) listings stood at 16,700,000, 24 hours after the new FP fees and format went into effect.  A week ago eBay was averaging about 16,100,000. That is a gain of about 600,000 listings, or 3.7%.

Everyone, including eBay, expected a much greater bump. Only eBay knows what is going on behind the scenes. It may be that FP listings are way up, but sellers have reduced their auction-style listings. Or perhaps sellers are concerned about the site being swamped with listings and are taking a wait-and-see attitude.  There is also the possibility that smaller sellers with eBay stores, are canceling their store listings and moving them to FP because FP listings come up in search.

Another, more likely explanation is that most of the medium and large sellers use various listing tools –both software like eBay’s Turbo Lister, and online systems like InkFrog, Vendio, Auctiva and others. I don’t know about InkFrog and Auctiva but Vendio, the system I use, has not been updated to work with the new SYI form. I spoke to a seller who uses Turbo Lister yesterday, and the new format has not been integrated there either.

If eBay’s own tools are not ready, it is no surprise that third-party tools have not been integrated.

I have about 70 listings I would like to launch in the new format, but I am waiting for Vendio to complete the integration. Right now, I would have to list each item individually using the eBay Sell Your Item form. I just don’t have that much time. So I will wait until Vendio updates their system. I have spoken with two other sellers who are doing the same thing I am.

The new FP listing format and fees look very attractive. You can list an unlimited quantity of media items for 15-cents and other items for 35-cents for an entire month. Listings can be set up so they are essentially permanent by selecting the Good Til Cancelled (GTC) feature. And unlike store listings, FP listings come up in search with auction items.

As part of the new format, eBay has changed the search algorithm so they now score FP listings separate from auction-style listings. eBay’s Best Match search ranks time ending soonest as a leading factor in bringing up search results. Since FP listings are essentially permanent, the new search will ignore the time ending when serving up FP results.

Given all of this I suspect it will take a week or more until we really know if the new FP listing format will be successful. Certainly there are sellers trying it. If it produces sales, then I suspect we will see an increase in the total number of listings. If not, eBay will have to stracth their heads and think of something else.

When I typed Lehman Brothers into the eBay search engine it came up with 254 items for sale. A few of them were domain names related to the bankruptcy, but most of the items for sale were various advertising giveaway and employee items including golf clubs and golf balls, hats, tee shirts, duffel bags and other items of clothing with the Lehman Brothers name and logo.

One of the most ironic items was an operating principals cube. Here is what the listing said:

Own a piece of Lehman Brothers history as its being made. Brand new and sealed in the original plastic.

Operating Principles cube that opens up in different ways and you can read all the different principles like...

"Demonstrating smart risk management" 

"Demonstrating commitment to excellence" 

"Doing the right thing"

"Maximizing shareholder value"

I especially like the first one.

Another great item is a Lehman Brothers Emergency Evacuation Kit.

It's not only happening in the US. Here is a link to a story in the UK Telegraph about angry Lehman Brother's employees selling off their stuff.

Lehman Brothers is not the only one. If you search Merrill Lynch, bought out by Bank of America yesterday, there is a lot of their Merrill selling as well. Could AIG be next?

You can't buy it on eBay, but I find it interesting that people are still buying Lehman Brothers stock. The stock is trading today for 19-cents a share.  I called a broker friend of mine and asked him about it.  It turns out that Lehman actually has a lot of assets.  Some folks estimate that when the bankruptcy is finally finished shareholders could end up with a couple of dollars per share. But --that could take several years.

Skip McGrath

This story first surfaced in an article in Barron’s Weekly citing a report by a research firm, Wedge Partners. eBay’s stock was trading new its 5 year low today hitting $21.75. 

If eBay were to cut the jobs it would signal that eBay’s business is deteriorating faster than most market analysts thought, but confirm the comments of many eBay sellers who have seen lower sales of late.

Several investment analysts have recently upgraded eBay to a Buy. But eBay’s recovery could be a while in coming. Although a layoff would probably boost the stock price. eBay currently generates about $455,000 in annual sales per employee. A 10% cut in staff could theoretically boost that to over $500.

eBay currently employs over 15,000 people so that would amount to 1500 job cuts.  Most of the cuts would be at their San Jose campus and their Salt Lake City operations center. Cutting 1500 jobs would save eBay slightly over $100 million over a year’s time. If eBay can do that and stop their sales from deteriorating further by bringing buyers and sellers back to the platform, that would give a big boost to eBay’s profits and their stock price.

eBay has initiated several pricing and policies designed to make the site more buyer-friendly. Many of the policies have angered sellers, but the policies are still too new to show results. 

I found a blog called Seeking Alpha that has a pretty good analysis of where the layoff would come from. Here is the link: http://seekingalpha.com/article/95515-how-would-an-ebay-layoff-impact-sellers?source=yahoo

When I talk to other sellers, I don’t really see that many actually leaving eBay. Mostly it’s a case of sellers seeing their growth as coming from other online platforms such as Amazon.com, Overstock.com, Bidz.com and their own websites. So although they are still selling on eBay, they are growing their business on these other platforms. This is true in my case. My non-eBay sales now account for a larger part of my sales (about 15%) than they did at the same time last year.

The other factor that could hurt eBay’s profits in the Fourth Quarter is the recovery of the US Dollar against the Euro and the British Pound. The European market accounts for a large part of eBay’s (and PayPal’s) profits. A stronger dollar could hurt those profits. On the upside, PayPal and Skype continue to do very well and PayPal is said to be taking steps to increase their margins.

The Fourth Quarter will be very interesting both for sellers  --and for investors.

The new Fixed Price (FP) listing policy has four major elements:

1. Listing fees are lowered to 35-cents for most products and 15-cents for Books, Movies and Media
2. The listing duration will be for 30-days and listings can be automatically renewed (GTC).
3. Sellers can list an unlimited quantity of items for the same fee
4. Final Value Fees (FVF) will rise to charge sellers more on the back end (when a sale is made)

I have been speaking with several sellers over the past few days --both large and small.  One of the concerns I am hearing is that the platform will be swamped with items resulting in items becoming harder --not easier to find. eBay did announce that as part of this they are reconfiguring Best Match search to score FP listings separate from auction-style listings.  This should help, but the truth is no one really knows.  I suspect the Media category will be the most crowded but other categories will be affected as well.

When I look at my business, I have about 40 different listings for standard products I sell all the time. So it will cost me (0.35 x 40) $14 a month to launch all of my items to the FP format.  That is pretty cheap, so why wouldn't I do that.  If every seller does the same thing that could effectively double the listings on eBay if all sellers were to also keep listing in the auction format.  In my case, however, I will probably reduce some of my auction-style listings if the FP items start to sell.

The other factor that is in-the-wind is eBay's policy of making special deals on lower listing fees with very large sellers like buy.com.  There are some pretty big sellers out there who have the ability to list 50,000 or more items at one time. eBay doesn't really like to discuss this, but they have admitted that they reserve the right to make these deals. (I will have a longer article on this topic in my next newsletter).

Here is how that could work.  Let's look at just books as an example.  The largest book distributor in the US is Ingram. They have several hundred thousand titles in stock. Ingram has a drop ship program. What if I were to go to eBay and make a deal to list 100,000 titles on eBay for 5-cents each per month. That would cost me $5000 in listing fees for 100,000 titles.  I don't have to buy a book from Ingram until it sells. So let's say I have a 5% conversion rate and I make an average of $5.00 per book. That means I sell 5,000 books X $5.00 each gross profit, or $25,000 gross before eBay FV fee and PayPal fees. If those fees average 15%, I am left with ($25,000 - 3,750 - $5000 cost) = $16,250 profit. I don't need 25 employees to do this. A good programmer can write a program that will upload all the titles, photos and descriptions.

The 5% conversion rate is pretty low and so is the $5 per book margin, but I wanted to show that even with a worst case example this is a doable business that will attract large sellers and merchants. This is admittedly a highly simplified example --but I wanted to make a point, that this new policy could have unintended consequences.  If you want an example that shows how unintended consequences work think about Ethanol.  The congress and the president passed bi-partisan legislation to bring corn-based ethanol to 15% of all gas sold in the US.  If this worked it would reduce our oil-imports by that amount --a laudable goal. The problem is that putting all that corn into our gas tanks has increased food prices by 20% to 30%. Some chemical products based on corn has seen price increases as high as 50% and the cost of fertilizer to grow all that corn has doubled in the past couple of years. 

We won't know the unintended consequences of eBay's policy for a while --frankly it will take a while to shake out, but I predict there will be some.  Whether they are good or bad will take a while to determine.

The Future of eBay is a 30-page completely FREE eBook, released to my readers last week that covers the latest policy and fee changes on eBay. 

A few weeks ago I was invited to the eBay campus for a briefing on the new fee and policy changes.  During those briefings I had the opportunity to interview top execs at eBay extensively.  The next day, eBay announced several new policies and completely revamped the fixed price listing fee structure.  I covered each of the new policies here in the blog (scroll down to see those posts). When I was finished I went back over the posts, reviewed and updated them and put them into an eBook I call The Future of eBay.

In addition to the info on the new policies and fees, I also write about what is coming from eBay over the next year or so and what the impact will be for new, small and medium-sized sellers.

Readers can download a copy of the book by clicking here: The Future of eBay by Skip McGrath.

I also recorded a 20-minute podcast with Ina Steiner of AuctionBytes. Ina was interviewing me on the same topic, but she asked some questions I hadn't thought of, so the podcast gives you a slightly different take on the new policies.  You can either listen to the Podcast on your computer or you can download it to listed to later.

Click here to listen to the Podcast.

That's it for now.  There should be some more announcements from eBay soon, so stay tuned.

Skip McGrath

http://podcast.auctionbytes.com/cgi-bin/podcast/pod.pl

My regular readers know that the only source of wholesale sourcing information and research that I recommend is WorldWide Brands.  The sales manager at WWB called me last week and said they were going to have a Labor Day Weekend Special on their master course and wholesale info service.  I convinced them to extend the sale for a few more days, and they agreed.  If you act before Midnight, Monday, September 8th, you can save $100 on this excellent service.

Here is just a quick overview of what they offer:

Worldwide Brands Product Sourcing Membership + 'The Whole $ale' eBiz Education

•  7,000+ Real Wholesale Suppliers for your eBiz! •  More than 6 MILLION products you can sell online! •  INSTANT market Research tells you What to Sell! •  Drop Ship, Light Bulk, Volume, Liquidation, Imports! •  Exclusive Wholesale Buys for Members Only! •  19 eBiz and Product Sourcing Video Courses! •  19 Online Workbooks expand on each Course! •  Interactive Self-Testing insures your Learning! •  Exclusive eCommerce Insider Reports! •  Resources for every area of your eBiz! •  Instant Access to the Whole $ale eCommerce Forum Here is the link to use to get your discount: WorldWide Brands Labor Day Week Special

After Sara Palin's speech to the Republican convention last night, I got up this morning and went to Cafe Press, the site where independent online sellers create and sell merchandise like tee shirts, coffee mugs, bumper stickers and so on.  Sara Palin was on the front page. When I did a search, I saw over 500 separate items for sale.

Next I went to eBay.  At the time of this writing, there are only about 20 listings for Sara Palin merchandise on eBay, but the number of listing is growing by the minute.

A few months ago I wrote an article in my newsletter about the niche of selling your own design tee shirts on Cafe Press and eBay.  This is a great eBay niche business --but it is not limited to eBay. If fact many sellers are now selling far more on Cafe Press than on eBay.

Cafe Press is set up so you can design a tee shirt (or coffee mug, ballcap, etc.), upload the design to Cafe Press, put it in your Cafe Press store (sort of like an eBay store) and people can order it online. The best part is that Cafe Press does the manufacturing and shipping for you --all you do is collect the money.

Once you have an item on Cafe Press ready to ship, you list the item on eBay. When you make a sale and are paid for the item, you just go into your Cafe Press account, pay the wholesale amount and they ship it to the customer for you.  This is basically an instant drop ship business.

Political campaigns are always a great time for these sellers. Last week it was all Obama all of the time. This week its Sara Palin.  If you are going to play in this market you have to be a news junkie and you have to be quick. The first sellers are the ones who will make all of the money.

Skip McGrath

A few weeks ago I received an email from one of my readers asking where he could find wholesale sources for Victoria Secret products that he sees selling on eBay. I told him I didn’t know because Victoria’s Secret has very tight controls over their distribution.  Well now we know where they were coming from.

An eBay seller, with several eBay usernames was busted for selling stolen Victoria Secret Bras, panties and other lingerie items on eBay. The New York Post reported today that eBay seller, George Tutaya of Queens NY stands accused of selling over $80,000 worth of Victoria's Secrets underwear that he apparently received from a shoplifting ring.  Tutaya was arraigned on charges of possession of stolen property and, if convicted, faces a prison sentence of up to seven years.

"Trafficking in stolen goods on the Internet will no more be tolerated than fencing stolen property would be anywhere else," said Queens District Attorney Richard Brown.

Tutaya  used eBay names such as beautiques,  bestfordivas and shopforless2 and several PayPal accounts to market over 2,000 bras and other ladies undergarments on eBay. The New York Post reported that he was underselling Victoria Secret prices by a substantial margin. When police raided his apartment they found a large quantity of bras worth approximately $26,000.

If you want to find real wholesale sources including over 7,000 companies who will drop ship, Worldwide Brands is running a Labor Day Week Special from now through Midnight, September 8^th where you can get $100 off of their complete sourcing and training package.  Here is the special link where you can get your discount. Remember this ends at Midnight, September 8^th.

http://tinyurl.com/cs2lh

Worldwide Brands is the only wholesale sourcing resource and  information company I currently recommend for eBay and small website sellers.

The Future of eBay

Get Your Free Copy of The Future of eBay.  My readers can now download a FREE copy of my 30-page eBook, The Future of eBay from my website at:

http://www.skipmcgrath.com/products/future-ebay-new-policies.shtml

The Future of eBay, eBay Gold PowerSeller, Skip McGrath, discusses the recent policy and fee changes on eBay and how they affect eBay seller strategies.  It is free for my readers to download –no email address or contact information required.