Why it currently sucks to be a seller on eBay

 We just received this message from eBay today:

We're contacting you about the following item:
WOMENS CUSTOM CLOTHING LOT PERSONAL SHOPPER SERVICE

This listing didn't follow the guidelines in our policy. We haven't removed it, but we wanted to let you know about the problem because future violations could result in listing removal and limits to your selling privileges. Please use the information below to edit your listings so they follow our policy: 

Listings that offer a choice of different items aren't allowed on eBay. Sellers can offer a choice of sizes, colors and configurations of a particular item within a listing, but the listing can't offer buyers a choice of completely different items.

Sellers are generally permitted to offer a choice of sizes, colors and configurations of a particular item within a listing. However, a listing may not offer buyers a choice of completely different items. This is considered a form of fee circumvention.

Using systems and techniques to circumvent, or avoid, eBay fees isn't allowed. Fee avoidance, or "circumvention," is damaging to the online marketplace, puts sellers who pay their fees at a disadvantage, and damages members' trust. 

For more information on this eBay policy, please visit: 

http://pages.ebay.com/help/policies/listing-circumventing.html

We're sorry for the inconvenience, but our policies help keep eBay safer for everyone. Thanks for your understanding.

Sincerely,
eBay Trust and Safety Team

So effectively our last two remaining eBay auction listings are considered in violation of eBay terms.  To be more specific, we were running two "personal shopper" auction listings on eBay.  In each listing you could choose your size and also how many clothing items & jewelry you would like to receive, with different price ranges for each "lot".  The buyer would send us their payment, we would then go shopping for them (as a SERVICE), photograph what we purchased for their review, go shopping again if necessary, then package and ship their clothing directly to them.

Because there were variations within each listing, eBay apparently determined that we were selling "different" types of product in one listing and therefore attempting "fee avoidance".  Strangely, they did not cancel the listings, so apparently this message was intended to be some kind of warning.  To me that makes things really unclear - because according to this message from eBay we were in violation of eBay policies, but it was still okay to keep the listings up.  My interpretation is that eBay knows that we were not in violation of their terms, but they decided to bully us into splitting these two auctions up into ten separate listings so they would receive more revenue from insertion fees.

For those of you who do not use eBay regularly or have never sold anything on eBay, this past October a number of changes on the site were initiated to make eBay seem (in my opinion) less like a flea market and more like a professional site such as Amazon.com - in fact it appears to me that eBay is attempting to move in on Amazon.com's market.  These changes include degrading Powerseller (which is a title achieved by selling a certain quantity or dollar amount within a 90 day period) to little more than a title, increased emphasis on seller star ratings which focus on accuracy of listing description, shipping time, shipping fees and communication, and the inclusion of a new title called Top Rated Seller which can be easily lost by receiving one or two low seller star ratings or a serious listing violation.  This title is also very difficult for new sellers to achieve.

The reason it is hard to become a Top Rated Seller is because the seller star ratings are entirely dependent on the customer.  If the customer has a grudge, or maybe wants more than what the auction offered, or didn't bother to read the auction description or the seller's terms before they made their purchase, it is still the seller who has to pay the penalty.  Also, because eBay sellers are forbidden from leaving any negative feedback on a buyer's record, there is nothing a seller can do to protect themselves from bad customers, or worse - scammers.  There are many buyers on eBay who take advantage of eBay's policies to attempt to get products without paying for them.  Failing that, they can also take advantage of Paypal's policies and get their money back for a purchase by lying.  In all cases, it is the seller who ends up paying, and the sometimes the costs of these bad customers don't go away for a VERY long time.

What is especially obnoxious is that only Top Rated Sellers can purchase enhanced listing advertising (Featured First) which puts their listings ahead of everyone else's that fall under a similar search category.  Featured First is very expensive ($25.00US per listing) and there is no guarantee that your listing will even show up first - eBay rotates different auctions that have paid for Featured First, typically showing only two at a time, and only auctions that are "popular" (people click on them to view the description and/or place a bid) will show up at the top of the search on a regular basis.  In other words, if your auction looks cheaper than everyone else's, or seems to be offering more than anyone else's for the same price, you will get more traffic than other auctions, and if you have purchased Featured First, as the auction progresses through the week it will start to show up at the top of the search results ALL the time.  However, if you are not willing to take the risk of your auction selling for less than what you are paying eBay to list it, you will not receive as much traffic as those who do.  Either way - Featured First is like gambling at a casino - more often than not you end up losing.

What this means for a seller who is engaging in the sale of a popular type of product (popular meaning tons of other sellers are offering the same thing & that the search results for the product are several pages long) is that you either pay eBay $25.00 to ensure your listing receives the proper traffic throughout its duration, or else you pray that your auction performs well on the final day of its listing duration because that is the only time it will be easy to find for the average eBay shopper.  If your auction does not sell, you still owe eBay your insertion fee (although they may allow you to attempt to relist it and will credit your second insertion fee if it sells on the second try).  If you have purchased Featured First and your auction does not sell, you still owe eBay the $25.00 fee + your insertion fee.  If someone wins your auction and does not pay you, you still owe eBay the $25.00 fee + your insertion fee, although you may be able to get a credit for your Final Value fee.

Let me break this down for you:

• Listing Insertion Fee - To list an auction you must pay an "Insertion fee" which is a basic listing charge - the amount varies depending on the beginning dollar amount of the auction ($0.99 auctions cost $0.15 to insert, and the insertion fees increase from there - check eBay policies for specifics).  If your item does not sell and you "relist", you may receive a credit on your insertion fee as long as it sells on the 2nd attempt.
• Upgrades - To increase the "visibility" of your auction (how easy it is for the average eBay shopper to find) you may purchase "upgrades" for your listing such as Subtitle, Bold, and Featured First (to name few).  Featured First is the most helpful "upgrade" because it positions your listing first in your search category, however it is expensive ($25.00 US) and thus should only be used by sellers who know they will definitely receive more than $50.00 in bids for their auction.  You may also add features such as Buy It Now to allow buyers to end an auction early by paying a set price, which costs an additional $0.35 per auction.
• Final Value Fee - After the auction has sold, eBay takes a percentage of the final transaction price of every auction - the percentage varies based on how much the auction sells for.  Final Value Fees can be refunded if a buyer never pays for your auction, although this process takes up to two weeks to complete and effectively gives the buyer additional time to pay for an item beyond the seller's specified terms.
• Paypal Fee - Every time you receive money in Paypal it takes a percentage from the total amount (in the case of eBay transactions, which REQUIRE that you receive payment via Paypal, this means the total price of the auction PLUS shipping).  In case you were not aware of this, Paypal is owned by eBay, so this constitutes an additional source of revenue for eBay for their auctions.

So what does this mean?  It means that eBay receives payment from their sellers UP TO FOUR TIMES from ONE TRANSACTION.

Throughout 2009 we were selling "lots" of womens clothing.  This is a great market and also a difficult market.  If you are able to obtain large quantities of women's clothing for cheap, you could do quite well.  Yard sales, garage sales, thrift stores and so forth are excellent sources for this - thrift stores with clearance specials tend to be the easiest place to get good deals.  For a time we were obtaining a majority of our product from a local thrift store, but the details of that story fall under a different rant entirely.

Our plan was to resell our product on eBay with the initial goal of bringing in $600 or more each week.  Our initial trials indicated that this was quite possible with the sale of approximately 200 clothing items per week, in three to four auctions each offering roughly 60-80 articles of clothing.  There were other eBay sellers who were selling less articles of clothing and earning well over $1,000 per week.  All throughout 2009 we struggled to reach this goal, never quite achieving it.  Other factors were at play, but a number of our issues stemmed from an inability to find a set technique of selling the auctions that consistently worked.  We would have certain auctions that performed well, but duplicating these auctions typically resulted in what I called a "failed auction" - basically an auction where the clothing sold for less than $2.00 per item.

It is also important to note that these clothing lot auctions were more of a service to our customers than anything else - we purchased the product, organized it into like sizes, created "collections" of matching items, dressed a mannequin with each outfit, photographed them, cropped & resized the photographs and created a listing with additional information about the pieces such as measurements, size, color and so forth.  This was a very time consuming process, and a single auction could easily take several hours to create.  Regardless of the amount of money we had invested in our product, we needed our auctions to sell for a certain dollar amount to properly compensate us for our time.

Unfortunately, from the buyer's perspective, we were offering discount clothing for cheap, and it is in the smart shopper's best interest to purchase from the seller who appears to be offering the best deal.  Other sellers who included accessories with their lots such as cheap plastic jewelry, belts and handbags typically received the majority of bids from eBay shoppers.  These sellers would end up receiving anywhere from $200 - $400 for a single auction.  We tried selling the same jewelry with our auctions after finding a source for it on eBay for less than $1 per item, only to find that our listings still did not perform as well as we had expected.  To try to differentiate ourselves, Brig started creating her own jewelry to include with these collections, and while it did make an impact by improving most of our auction listings, it was unfortunately not enough to allow us to reach our expected goal.

As Thanksgiving approached we ran into difficulties with our source of inventory, and at the same time our sales began to plummet.  In an attempt to protect our remaining inventory we began offering Fixed Price "auctions" - they were listed at a high price, and we also accepted Best Offers from our buyers.  This allowed us to sell auctions for much higher than $2.00 per item, but they did not sell as frequently as regular auctions, so we still did not meet our weekly goal.

The Saturday before Thanksgiving eBay's search engine broke, making it impossible to find anyone's listings.  eBay claims that the problem was caused by an unexpected number of sellers creating new auctions so they would end on the Friday following Thanksgiving (Black Friday).  As a result of the problem, sellers could not even find their own listings for the entire day, and the problem was not entirely resolved until sometime on Sunday.

It is common for eBay sellers to schedule their auctions to end on Saturday because Saturday is the most active day on eBay.  This search engine outage therefore not only resulted in lost revenue for thousands of sellers, it also undermined buyer's confidence on eBay - especially the confidence of new buyers.

We had practically no business from that point forward.

eBay then added insult to injury by offering the 12 Days of Christmas sale, promoting manufacturers of major clothing brands such as DKNY by offering 70% off their clothing right on the front page of eBay.com, among others.  Effectively, eBay was competing against the majority of its own sellers by offering these promotions for Christmas.  I'm sure that eBay made quite a bit of money as a result of these promotions, but it left a really bad taste in my mouth, and I'm sure I'm not alone in this.  We took the time to view other auctions being sold in the womens clothing lots, and throughout the entire holiday season and even up to the present, these auctions are not performing nearly as well as they had been before the holiday season.

So this brings us up to the present - based on what I consider our failed eBay business attempt I went out and got a new job, for which I am incredibly grateful in this awful economic climate we are now in.  We had decided to continue to offer auctions on a more limited basis as an extra source of income, and had decided to consolidate our regular auctions into two custom shopping service listings.  They were identical, we just used different search keywords in each one to increase our visibility.

I also closed our eBay store (which is an additional source of income for eBay, it cost us $15.00 a month) and also ended our image hosting service subscription.  I ended all of our individual jewelry pendant auctions as well (we had over 100 listings of hand crafted holiday pendants and earrings running throughout the entire holiday season, and sadly only received purchases from our friends who knew of our listings thanks to Facebook).

Consequently, it is my opinion that the letter we received today from eBay is based on the fact that we are no longer a dependable or significant source of revenue for eBay.  Therefore, even though we were doing nothing wrong, this letter was their attempt to bully us into creating more auction listings so they could have a bigger cut of our profits.  If this is true (and so far I have no reason to believe otherwise) this is yet more despicable behavior committed by eBay, and as a result I no longer desire to have a part in it.

While we may purchase things through eBay from time to time, I do not intend to allow them to rape us any longer.  I paid the $3.70 we owed eBay for the month of January so far, and ended both of our last two clothing listings.