Hmm… $1 is too high? Total Fees on that $10 part would be $1.10. It seems like Ebay is a lot higher than that… but they do have a lot of different deals so it is hard to compare. The credit card companies take about $0.35 per transaction plus a percentage. So trying to charge $0.50 is not going to work.
Total fees are fine, but you’re charging too much on the front end. I’ll use myself as an example. I listed 20 items in the classified section. On the Cougar site that would cost me $20 even if I don’t sell any of them. Why would I take that risk? I’ll gladly give you that $20 if I get my asking price for half of them. But in order to entice me to list on an unproven venue, you have to make it cheap on the front end. I’m not sure what the CC fee has to do with the issue. Unless you’re thinking of a separate transaction for each individual listing. But that wouldn’t really make sense.
Ebay doesn’t charge a listing fee for auction style listings. Yes their total fees are a lot higher. But you can’t expect people to shell out a lot of money to attempt to sell their stuff. They’ll just keep listing them in the free places. Charge them if their items actually sell.
Al, you have a good point.
Here are the issues I am trying to address:
If you can end the auction at any time and it is free to list, and you can re-list things for ever and that is also free, then that doesn’t work for the site. Currently very few listings on Ebay end in a sale. Most vendors (Ebay store owners) have figured out how to use Ebay to advertise and then they make the sale outside the site.
If you only list one item then the transaction will be for $1. I am trying to verify this, but it looks like each transaction (auction listing creation) is billed individually. So if there is problem with a transaction, you don’t contest the entire months bill, just the single transaction. I think getting around this is part of why Ebay bought PayPal, so they could do it their way.
For the sake of discussion, Here is what Ebay publishes for fees:
Auction style parts listing:
First 50 insertions are free. After that they range from $0.10 for an auction less than $1 to $2. for $200 and above.
Then they get 10% of the first $50, plus 8% of the next $950. plus 2% of anything over $950 So a $50 item would cost $5 plus $1 if you had to pay for the insertion plus $2 for a reserve. What I am proposing would be $1 (2%) plus $1 for the listing Ebay = $7 or $8 versus $2 Plus Ebay will charge for auctions ended early…
What I am beginning to understand is that elimination of a small risk may justify a huge reward on the back end.
I like the idea. I would use the site.
I disagree. In fact, not only do I think it will work, I think it’s almost a necessity. The first challenge is going to be having enough interesting listings to attract buyers. You can’t open a store with empty shelves. And if you can’t attract buyers, no one is going to list their items.
You may be correct about the success of ebay listings as it relates to cars. But as far as general items, that is simply not true. The main reason for the lack of success is because people want too much for their items. They aren’t listing them for too much money then selling them through the back door to avoid the fees. Does it happen? Yeah sure it does. But it’s not anywhere near as widespread as the ebay propaganda machine would have you believe. As a matter of fact, it’s a lot harder to convert an ebay buyer to do business outside of ebay than you would think.
Trying to bill each individual listing is not really feasible. You need to have people create accounts and bill them on a monthly basis. Otherwise the card processor is going to be the only one making money. This has nothing to do with the reason ebay bought Paypal. Paypal and Bidpay (ebay’s online payment service) were created to give buyers and sellers the convenience of paying online. The majority of people chose Paypal because they were more user friendly and less expensive. Since ebay couldn’t figure out how to compete, they simply closed down their own system and bought the competition. Probably the only smart thing they’ve done in the last ten years.
For what it’s worth, I sell an average of 1100 items a month on ebay and I have close to 40,000 feedbacks. I don’t just make this stuff up, I have a pretty good idea of what works and what doesn’t. The biggest mistake ebay has made is treating their sellers like crap by assuming they are all dishonest and out to screw the buyers and them. Don’t make the same mistake by starting out with the assumption that the guys on your site are going to go behind your back and cheat you out of the fees.
Al, I think you are right. My point was really that unless you do what Ebay does, it probably won’t work. Ebay may not do everything right, but they have figured out where the pressure points are. Sellers are less sensitive to paying large percentages on a sale than they are to paying lower overall fees that involve a front end expense. The key in business is to charge for the things that people are willing to pay for, and to give away the part they think should be free.
I sincerely do value your opinion so please don’t take anything as an attack, I am just asking questions, sometimes pointed, and I do appreciate your candid, honest, responses.
My altruistic side tells me to make this ideal for the little guy, but my business sense tells me that if it really works, the little guys get bigger, and turn into the big guys, so the two are not really much different. I am sure that you have worked up to your current level of success.
Do you have an Ebay store? What are the expenses that you see on your transactions? If you only sold one or two items a month how would those expenses differ?
The individual billing is not my idea, it is the way the credit card companies want to do things. Pay Pal charges $0.30 plus 2.9% of each transaction so on a $0.50 payment they get $0.33. Ugh. I will see if there is a way to accumulate the charges to minimize this.
I will disagree with you on the number of sales made outside Ebay. If you do a search and look at the number of listings for say “1967 Cougar” and then the number of completed listings, and the the number of sold items, you will be shocked at how few sales are being made. Where retailers are selling stock items it is not uncommon to find the identical item on their web site for less than they offer it for on Ebay. I think that this depends a lot on the category, my examples being Cougar stuff and car stereo. It also depends on the product. If it is a one of a kind product or limited in supply then they do tend to actually sell on Ebay, but mass produced items seem to be more likely to sell off the site. Maybe you need to look at how you are doing things. Are you leaving money on the table? Given all that, it is probably just a cost of doing business, as you say, you can’t open a store with empty shelves.
Bill, I’m not taking anything as a personal attack. I’m really engaged in this conversation because I think it’s a great idea for the Cougar community. I’m only offering the benefit of my experience to help avoid some of the pitfalls of doing business the ebay way. I have a lot more to share with you, but at the moment I don’t have the time to post. I will be back on later or if you prefer, I’ll communicate directly through a PM.
I used to have an eBay store, selling mostly retractable tonneau covers and the occasional clearance item. I closed the store when eBay extended their fees to include shipping costs. At that point, they were making more on the sale than I was, especially when you factored in the PayPal side of things. There was also the $16 per month fee for having a store at all.
The fee structure here needs to be geared toward the low-volume seller since that’s where most of the members will fit. You could set a threshold above which a “store” fee would apply. Under that system, the little guy could sell the occasional item, paying only the success fee while the volume seller would pay a monthly fee to support the volume of listings they create in addition to the success fees.
This is also a small community and someone trying to game the system is pretty easy to recognize. Given that this site is a resource for Cougar owners rather than the commercial enterprise that eBay is, someone gaming the site fee structure also wouldn’t go over well. I’m sure it will happen at some point, but I’d suggest starting out on the honor system and seeing what happens. It’s easier to argue actual experience than anticipated experience.
Excellent points Bill. You’ve done a much better job articulating a few of the things I was trying to say.
In order to dispel the thought that people are using ebay just to advertise and doing back room deals, I did an experimental search. I used the term “68 Cougar” just because it’s closer to the actual searches that I use. Then I used the completed listings option sorted by end date - most recent. Of the 200 results on the page, there were 115 sold listings. The first thing that can be observed about the 85 unsold listings is that a large percentage of them are not related to '68 Cougar. There are a number of the sold items that fit the description as well, but they are not relevant to this experiment. The reason this is important is because they can be removed from the potential pool of items that got sold off ebay. A person searching for '68 Cougar is simply not going to want a tin sign that says Jeep 4x4. The next thing you notice is that out of the 15 or so unsold items that are directly related to the search, about a dozen of them have been relisted. Therefore, they have not been sold outside ebay. This brings us down to just a few items that may have been sold outside ebay. But honestly they are inexpensive items that the sellers probably just gave up on.
A couple other points that should be made. You can’t advertise an outside website on your listings. And you can’t publish an email address. The initial contact with a seller has to go through the ebay messaging system. And yes they do read your messages. So like I said earlier, yes this does happen on occasion. But it’s not a widespread occurrence.
As Bill said, you’re going to have to gear this toward small sellers. Someone like Don already has an outlet to sell his stuff and everybody here already knows that. So he really has no incentive to use it. Win over the small guys first, then you can try to take over the world.
Hmm… Here is what I find really odd. When I do the same search, I find 255 completed listings going back to June 7th, 125 sold listings going back to June 7th. And 271 active listings presumably now older than 10 days. This looks to me like a there are many listings and not very many sales. I don’t know how we are getting such different results.
I am listening though.
Here is my thinking tonight:
Parts
Ebay: Charges $5 for the first $50 ( $50 sales costs $5) then 8% for the next $950, and 2% above that ( $500 sale costs $41).
Ebay: Reserve costs $2 or 1% above $200 capped at $50.
Cougar Swap Meet: 5% flat rate capped at $50 ($50 sales costs $2.50) $500 sale costs $25.
Cougar Swap Meet: Reserve is free. Buy It now is free. Listing is free. Pictures are free.
Cars
Ebay: $60 under $2000 $125 over $2000 Buy it now $5 Reserve $15 10 Day Auction $18. More than 4 pics extra charge.
Cougar Swap Meet 5% flat rate capped at $50. Buy it now free. Reserve Free. 10 Day Auction Free. Pictures Free.
Yes, I am trying to make this simple and painless, and also cheap. This doesn’t need to make much money, and it won’t LOL!
Thoughts?
One other thing… Unlike Ebay you could end the auction without penalty. Ebay charges for this.
On the issue of people buying/selling outside eBay, I’ve been involved in discussions about taking sales outside of eBay as both a buyer and a seller, but in all cases in a context of “if the auction doesn’t meet the reserve” or “if nobody bites on the buy-it-now”, and to meet up in the real world for a cash transaction in a McDonald’s parking lot or the like. The things I have saved searches for, I constantly see what Al has described, where the driving force behind things not selling is that a seller is asking $120 for something that the historical market after many months has indicated never sells for more than $40-45. People want unrealistic amounts of money.
Something that is really critical to consider when looking at eBay is that they have one thing going for them that a new enterprise like the one discussed here will not-- a sense of security and trust. eBay has been around for a long, long time now, and though shady stuff does occur, for a person like me, with over 250 auctions and only one of them having been a scam (about 9 years ago, also), I have an innate trust in the security of the process. And that is exactly the reason that I think the number of “let’s finish this outside of eBay” incidences is fewer than you are suggesting. The very reason it is undesirable is because as a buyer, without the proven track record and the security of the eBay/PayPal/Buyer Protection system, you are basically just taking a blind gamble on the seller being legitimate.
So my point with all that is, that is why people pay the premiums they do to use eBay.
I don’t think you’ll bite on this as it goes counter to your plan of having there be no fee for canceling an auction that doesn’t sell, but… To solve Al’s issue of not wanting to pay fees to have uncertainty of items selling, you could set it up such that there is a listing fee, a modest one like you propose, but you don’t pay that fee unless you either sell the item or cancel the listing. If you list it and it doesn’t sell, as long as you keep it active and renewing, you don’t pay the fee. If you cancel it (which suggests you sold it outside the auction, possibly by abusing the system as an advertising platform) then you pay the fee, and if you sell it, then you pay the fee. But as long as you’re trying to sell it within the system, as long as you keep renewing it (which could be set up to happen automatically) then you aren’t charged.
The downside to that is it allows for clutter in the form of unrealistic auctions, like the people all over eBay are doing. And it would also probably have to be set up such that if someone tries to buy the item but the seller doesn’t follow through, then the seller is charged that listing fee, because otherwise it could be abused by selling an item outside the system but renewing the auction to avoid the listing fee.
Why is nothing ever easy? 
Interesting idea, but keeping the items listed in perpetuity could be an issue for both a seller and for Bill. It does allow for “clutter” like you said. But also, let’s say I list my items in January and don’t have a lot of luck selling. I get rid of two or three, but just don’t find anybody for the rest of them. So June comes along and I take them to Carlisle and tell Randy Goodling to just give me whatever he can for them. I haven’t really taken them outside the system, I’ve just given up since I’m tired of tripping over them. That still leaves me stuck with the fee.
I think Bill is on the right track with the latest posting. One thing I want add not related to the fees is the listing themselves. I’m sure in the beginning it won’t be a big issue, but it could grow into one. You need to come up with a way to keep the categories “clean”. It really ticks off a lot of buyers to have to wade through a bunch of crap to see the items that they might be interested in. The search that I use on a regular basis has a list of “-screws, -shims, etc” in addition to a fairly long list of blocked sellers. And I still come up with a lot of irrelevant listings. I’m not saying you should not allow a guy to try and sell a 110 piece o-ring set he got from Harbor Freight if he wants to try, but you have to make sure it stays in the correct place on the site. Ebay is really lousy at that. The whole “compatibility” concept that they are trying to use is ridiculous. Yes those body shims are compatible with your 1970 Cougar, but that doesn’t mean they should show up on your search. A good seller should tell you in his listing if the rotors he listed will fit your car. But you shouldn’t see them unless you search for rotors.
Let me see if I can address a few things.
I can’t really illustrate what I am talking about regarding moving customers off Ebay with out naming names. With what I currently proposing it becomes moot anyway.
The decision to not charge for ending auctions early is easy to make: no one will ever be unhappy about this policy. I don’t want to make people unhappy over a buck or two. I think TMH is hitting this point: the best way to win trust is to make the users happy. When sellers are unrealistic, the buyers just won’t buy.
Currently I have the auctions set to automatically renew 10 times. This ought to be long enough for some one to figure out that the part just isn’t worth what they are asking. If they want, they can re-list it again and start the process over.
Al, you nailed the most important part: eliminating the crap. I am organizing the parts part auction into three main divisions: OEM and Reproduction Parts; these are parts that were originally installed on a Cougar. After Market Parts; these are parts that will will fit a Cougar (Edelbrock intake manifold) Miscellaneous Parts: Everything Else. There will also be categories cars and memorabilia and so on, but the MAIN thing is to eliminate the floral pattern seat covers and random spark plugs and all that other crap that keeps us from finding anything useful. I will have to moderate this and move auctions to make it clear that this kind of auction spam is not allowed. If they don’t like it they can clutter Ebay.