eBay's plan to drive away good sellers with a 1% reserve fee

relayer

The new eBay fee structure - a 1% reserve fee

Below is an email I received from The Reeded Edge, an excellent eBay seller.

Appearently eBay only wants to cater to buyers who are out to rip sellers.

If an item doesn't sell, eBay doesn't get it's final value fees, so a seller offering a quality coin at a fair price is discouraged from doing so.

If you're interested in obtaining nice coins from good sellers at a fair price send a complaint to the weasels at eBay on their new policy at coins_newsletter@ebay.com

Otherwise, the only coins left will be the ones you won't want to buy.

---

Hello and welcome back! Today we cancelled several auctions we had listed the previous day because we were caught unaware of a drastic change ebay implemented in their reserve auction fees. We are not pleased with this change as it will make it almost impossible and defintely expensive to continue offering the premium quality coins you've come to expect from us. This change forces us to restrict your opportunity to bid on our items and conduct business with us through ebay by raising our starting bid levels to our previously listed reserve prices. We would ask that if you are as upset as we are about the restructuring of the reserve auction fees to contact ebay through coins_newsletter@ebay.com or any other contact address you may have for ebay. We feel that this change is unfair but not irrevocable and a strong voice from ebay's customers can effect a sensible change in policy! Below is a copy of the letter we emailed to ebay earlier today. Thanks for your time and we appreciate any support you can lend.

Rob
Tammy
Ray

The Reeded Edge, Inc.
Attn: Darlene Bisceglia


We are voicing our displeasure regarding the recent decision to change the pricing structure of reserve auctions on ebay. Not only do we disagree with the change in fees, we find the method in which this policy change was backdoored to be reprehensible, cowardly, discourteous, and inappropriate toward ourselves as well as other sellers in the ebay community.

The Reeded Edge, Inc. has been an active and high profile member of the eBay community since 1997. We sell premium grade certified coins to customers and have relied on eBay as a revenue source. The coins we buy and sell are not typical market fare and as such we rely on the opportunity to invite the potential customer to read our listing description and view our photographs of our items and understand why we offer such items at a premium above traditional market levels. In the past we would list our coins with low starting bids and set our reserve price at the level we wanted to sell the coin and this would accomplish our goal of entertaining a large number of bidders without placing the item at risk for less than our cost. Now that we are faced with a surcharge of 1% of the reserve price, we must make changes in our sales practices that will be detrimental to our success on ebay.

While we could continue to maintain the status quo, accept these inflated fees, and be led like lambs to the slaughter, this would not be an acceptable course of action. Like any other business, we are a financial concern. The Reeded Edge, Inc. is not in the business of making money for ebay, but rather making a profit for itself. The increased expenses incurred from continuing to list auctions as we have in the past would not allow our business to continue in a profitable manner, and over the course of a few months would force us to discontinue our relationship with ebay completely.

We could modify our auctions to simply list with a low starting bid an allow the ebay market to determine the final value of the auction item, however as we all know while some days are brisk with eager buyers, most are not and the handful of coins that would actually generate a profit would not realistically offset those that would produce a negative net. Placing such premium quality items at such a large risk would not be sensible and therefore, not a viable option.

The path we chose to take, which is in our view the safest, but potentially equally detrimental, is to list our coins with the starting bid equal to what used to be our reserve price. This has a negative impact on our listings as the price alone is a deterrent to view our listings. Where once our listings enjoyed the viewing of many potential customers, now we find just a small handful with the rest being chased away. The one customer that may have made a strong bid for a coin now looks elsewhere because he/she is driven away from the opportunity because of the high protective starting bid. Reducing the number of potential customers is not good for our business either and unless we see the reserve price structure revert to its previous state, we will certainly have to revisit how much ebay will contribute to our business effort.

We also find the method in which ebay instituted the changes to be underhanded and slighting in nature. Any policy change that would have such an impact on all its sellers should have been published in a mailing sent to all of its sellers, not simply posted on a bulletin board. We find the way in which ebay arbitrarily instituted the reserve fee to be unfair and without opportunity for review.

We would ask that the Board of Directors reconsider this policy change as it is detrimental to the people who make ebay money: The Sellers. Remember, without nothing to sell, there are NO listing fees and NO commissions. While many sellers can offer five and dime candy with no repercussions from this fee augmentation, we and many other sellers that offer more expensive offerings will be forced to take our four and five figure "toys" (and consequently our potential commissions) and go elsewhere.

Robert Lehmann
The Reeded Edge, Inc.
eBay ID: reedededge

Merc

Yes, Ebay has made a mistake here. Their new policy will stop all reserve auctions. High end sellers can still list their coins but will have to start them at their reserve. This may reduce the number of high end coins being offered on Ebay. Once that happens, ebay may changer their minds.

gmarguli

When the stock P/E is hovering around 100 you have to do something to make money and a hell of a lot of it.

northcoin

I got the same email but have mixed feelings about the reserve issue on ebay. For me time is money and I really can't afford to spend the time trying to guess whether someone's reserve is in the range of what I am interested in spending. My suggestion would be to allow ebay sellers who want to play the reserve game, yet not want to pay the price for doing so, to be allowed to start their five figure reserved auctions at one dollar as they do now - but be required to place at the end of their ad a statement of what their reserve actually is. I've seen some sellers do this and have appreciated it when done. It has the bonus to the seller of encouraging more potential bidders to at least learn about the auction item before being immediately turned off by seeing a high priced minimum bid.

ASwimmer

Let me play devil's advocate. Ebay has two types of sales strategies fixed priced and auctions. Their concern is that sellers are using Ebay to receive essentially free advertising. Let us say I put up a very rare coin at a really high reserve. Week after week I keep it up and finally it sells. Lots of bidders but none ever winning and in many cases the high bid would not even be close to the reserve. Well, you in reality received all of those weeks prior to its sale for almost nothing. What other type of advertising allows one that? Ebay knows one , its Ebays Stores and their Fixed Pricing sales model. Or as you said one can start the auction off at a high price. Either way the buyer has an idea of what the coin is going to sell for. Too many people are putting up items with high reserves just to show them and maybe get lucky with a fluke buyer who would pay that reserve in the heat of bidding. What Ebay is looking to do is to keep the auctions just that auctions and move the high reserve rarely close no revenue for ebay items to the fixed price stores side of the formula. Or the seller can use a high start price in his auction or pay the 1% each time they list it and it does not sell. To me it makes sense. There is nothing more frustrating than seeing all these 'auctions" that are really not since there is no winner so much of the time with the reserve being high and unknown. If you list an item at Sotheby's with a high reserve and it does not sell, I would bet you there is a fee even though it did not sell. Just becasue Ebay is conducting auctions in the virtual world does not mean that they should not receive revenues for the service they provided and costs they incurred even if the item did not sell. They should not be penalized because an item did not sell when the reserve was high and hidden. They did their job and deserve to be compensated and manage their business for the good of the whole. If the new fee does not work and does not drive business into the fixed priced strategy and they see sellers leave and revenues drop then they will reverse it or tweak it in someway. Of course this is just my opinion I could be slightly mistaken.

AS

jbsteven

swimmer:

Ebay makes money even if the item does not sell. There is a listing fee. So on a transaction since they bought paypal they can make $3.30 to list, 3% when it sells then ANOTHER 3% if the person uses paypal. $500 item sells before the 1% reserve thing came about then ebay makes $33.00. Now they will make $38 if it is a reserve auction.

Sounds like to me the only game in town is getting greedy.

Swimmer.........made any new coins recently?

Russ

<< <i>Appearently eBay only wants to cater to buyers who are out to rip sellers. >>



Damn them! It's a good thing they also go after sellers out to rip off buyers; especially power sellers. You have to love the way they aggressively and immediately shut down all the obvious frauds and scumbags insuring that no buyer ever gets taken to the cleaners.

Russ, NCNE

baccaruda

i like the change.

it's cheaper now to place a reserve on an item under $200 and more expensive to place one over $200. it also makes reserves accessible to low-end sellers.

baccaruda

The Reeded Edge, Inc. is not in the business of making money for ebay, but rather making a profit for itself.

Ebay is not in the business of making money for The Reeded Edge, Inc., but rather making a profit for itself.




While many sellers can offer five and dime candy with no repercussions from this fee augmentation, we and many other sellers that offer more expensive offerings will be forced to take our four and five figure "toys" (and consequently our potential commissions) and go elsewhere.

the five and dime sellers are the ones making ebay profitable. not the high-reserve sellers with auctions that sell 5% of the time.

BillJones

Ebay never was much fun to deal with if you were trying to sell nice material. Now it's even LESS fun to deal with.

I think they should change the name to "Sanford and Son, Inc.."

DCAMFranklin

Baccaruda is right. The pricing equation is much better for the small seller. Sellers offering the highly priced material can list their auctions with an initial bid equal to what have been their reserve. ASwimmer makes some very good points as well. It is obvious to all that a good number of sellers have been listing their extremely high ticket material with an extreme reserve only as a means of "advertising" for a very low cost. Or, they do so as a means of "trolling the bait" through the school to see if they can get some bites. Then they negotiate the deal off of Ebay, cancel the auction early and screw Ebay out of their deserved final value fees. I like the new pricing equation. I told Reeded Edge to forget. I'm not sending any complaint messages to Ebay.

UncleJoe

I thought there was a fee for a reserve auction that did not sell that was in addition to the listing fee?

Joe.

NumisEd

Reserves SUCK!

redhott

an excellent eBay seller??? yeah, right, are you grading sellers or spammers?

UncleJoe

Am I correct that the reserve fee is only charged if the item doesn't sell?

I don't see anything wrong with this. What am I missing?

Joe.

DCAMFranklin

<< <i>Reserves SUCK! >>




That's right! Everyone should send an e-mail to Reeded Edge telling them to list the coins at 99c and let 'em rip! If their coins are as good as they think, then they will get appropriate value for the coins. Let the market decide.

baccaruda

or they can simply sell the item without a reserve at "fair market" price - then they don't have to worry about the restructured costs at all...

as far as i'm concerned, weeding out the auction "spammers" who list a high-reserve auction 50 times over until some poor sap accidentally pays twice what it's worth is a good thing. i hate it when i unknowingly click on a reserve auction anyway, so less of them is good.

one further change they should make is showing a "reserve symbol" next to the auction so that we know not to even bother with them.

jbsteven

Dcam said this


<< <i>Then they negotiate the deal off of Ebay, cancel the auction early and screw Ebay out of their deserved final value fees >>



I highly disagree with the DESERVED final value fees Ebay charges. Again this is where the big dog takes what he wants as being 3%

Just like credit card companies get 2-3% from the merchant if you use a credit card. I pay $1500.00 a month in these fees and have always considered it robbery just like Ebay.

baccaruda

ebay fees are expensive, paypal fees are expensive but:

last time i listed an entire group of lots on ebay i estimated their value at $550. final auction value was $810.

that $260 over expectations covered ebay fees/paypal fees nearly three-fold. so you can either use ebay's exposure to your advantage and pay the high fees or take your goods to your friendly neighborhood coin shop and have them look down their noses at your merchandise and pay you a tiny fraction of their value - to me that's the real robbery.

it sounds like some sellers want the best of both worlds - they want ebay's exposure, ridiculous multiple of retail prices, and don't want to pay for any of it. that's just the nature of business i guess.

jbsteven

barracuda, I see your side but what happens when you have to relist items a few times? then the profit margins fall especially on lower priced items.

MrEureka

Eureka is evaluating the eBay situation to see if there is some way we can offer the PUBLIC an effective (and cheaper) alternative for higher priced coins. Please PM me if you have any ideas you would like to share. Thank you!

baccaruda

i've listed probably 30-40 items and have never relisted a single one. face value starts with no reserve will solve that problem. if you want to pay extra in an effort to get "better than market" price, that's up to the seller.

it's strictly an economic issue. ebay is pleasing the great majority of their customers with this price change. we may not like that ebay is the 3,000 lb gorilla in the auction game but they are. they've worked and paid for that name. no one's forcing anyone's hand to list items on ebay.

the effect of the change is that there will be more low-dollar reserves and less high-dollar reserves. they most likely will attract low-end sellers and chase away a proportionately small amount of high-end sellers. items less than $200 are not garbage, they're lower priced items. i don't think ebay is interested in changing it's image from "world's marketplace" to "overpriced high-end coins-r-us".

it's just market force at work. those who want to take it , will. those who don't, won't.

jbsteven

barracuda:

what are the price ranges of the items you sell? link to your store? username?

baccaruda

it's right there in my sig. small time of course, if that's what you're driving at . the most expensive item is ever sold was about $150.

but i look at the world with an objective eye. most sellers (the vast majority) deal in merchandise priced at less than $200. ebay is not trying to cater to high-end coin dealers specifically.

baccaruda

i've never seen a seller complain that it costs him the same 30¢ to list a $1 coin that it costs someone else to list a $135,000 coin. to me that is grossly unfair, yet i've never seen a complaint.

mdwoods

Where else can you reach so many potential customers. Ebay has been a boon to everyone involved. Instead of a coin sitting in display case in the middle of nowhere, now you have a chance to reach millions of people, for a small fee. Look at what big companies spend on advertising each year, then tell me ebay fees are too high. Besides, many of the big coins sell off of ebay in private deals, so basically some sellers use ebay as a place to advertise their goods. Look at the whole picture before you bash ebay too much. mdwoods

Russ

<< <i>i've listed probably 30-40 items and have never relisted a single one. >>



Usually the same results here. The only ones I've ever relisted are the items that I put stupidly high reserves on because I don't want to sell them. For example, the AT'd Morgan listing I run from time to time.

Right now I have 39 listings on eBay, 36 of which close today. In total, these listings became profitable two days ago, and every auction started at one dollar with no reserve. The only one that won't sell is a bogus 1964 proof set envelope that I'm running right now with a stupid reserve to prevent the reading-impaired from actually buying it.

Of course, I'm only selling "nickel and dime candy", not like the "real" eBay sellers.

Russ, NCNE

BigD5

I list coins in a whole mess of price ranges, and in a lot of different formats. Reserves, set prices, $1 starts etc.
I think all Ebay is doing, regardless of an items value, is trying to make a seller price items at an "attractive" level, not a "I hope that one deep-pocketed buyer (for my item) comes along".
I don't mind the new fee structure, and quite frankly if The Reeded Edge doesn't want to play in Ebay's playground anymore, it's fine by me Just seems like more moaning and groaning to me, from a "quality" seller who won't stop spamming my damn email after repeated requests to stop.

baccaruda

ebay has closed the gap between "collector" and "dealer" much to the delight of most people. collectors no longer have to pay retail price and no longer have to "give away" items they want to sell.

the dealers have gained benefits too (as mdwoods said). they can take a 25¢ coin that would have sat unsold in a dusty display case, put it on ebay and find just the right buyer for 10x that price.

maybe ebay isn't the best venue for rare, high-dollar coins. but if ebay loses it's $50,000 coin listings i doubt 99.9999999999% of ebayers are going to lose much sleep.

and i'll just have to keep buying cheap crappy junk like russ.

Bustman

<< <i>

<< <i>Reserves SUCK! >>




That's right! Everyone should send an e-mail to Reeded Edge telling them to list the coins at 99c and let 'em rip! If their coins are as good as they think, then they will get appropriate value for the coins. Let the market decide. >>




Thats a bunch of BS! I would love to see anyone of you put a $3000.00 coin up for sale on ebay without a reserve. You would not have the nads to do it. As far as starting the auction at your "ask" price, you may as well list it as a "buy it now", because its not a true auction anymore.
eBay makes money even when a reserve is not met. The seller usually winds up listing it again & again until it sells. Each time eBay collects their listing fees!

gmarguli

If eBay really wanted auctions to sell, then they would reward the people who list items starting at 1¢ with no reserve. All they have to do is offer no insertion fee on these items. Perhaps make it that the item has to sell for a minimum amount so no junk gets listed.

baccaruda

I would love to see anyone of you put a $3000.00 coin up for sale on ebay without a reserve. You would not have the nads to do it

i have HUGE nads i guess because that's how i'd do it. if i believed that the true value of the coin was $3,000 then i'd sleep like a baby.

now if i needed to sell it at $3,000 in order to make a huge profit on it when i knew it's only worth maybe $2,000, then i'd worry a little and place a reserve.

no reserve/low start auctions will sell at "market value". dealers may not like this value but rest assured it's market value. auctions with reserve have artificial price floors and are not true auctions.

redhott

Reeded Edge sucks!!

DCAMFranklin

Bustman-
I see plenty of $2,000 and up coins selling with low initial bids and no reserve EVERY week. Probably every day. Just because you don't have the nads to sell the coins with no reserve, please don't attempt to claim that other Members lack the gumption.

I'm with Baccaruda. If Reeded Edge lacks the nads to auction the coins without a reserve, then good ridence. More room for other sellers.

RegistryCoin

When a collector/seller goes to a single dealer/buyer with a strong asking price, a high reserve in essence, the dealer may tell the collector "you really don't want to sell it, do you?"
When a dealer/seller goes to a massive public audience with a high reserve, it's for "protection".
I'm not sure about the conclusion, but I find the comparison interesting.

baccaruda

Registry,

my conclusion is: "you want to make a fat profit on that, don't you"

you're right. i think some dealers have a "club" mentality in that they think they have the right to pay less than market and sell for more than market. ebay will straighten out those misconceptions.

RegistryCoin

<< <i>my conclusion is: "you want to make a fat profit on that, don't you" >>


I guess that is correct, as opposed to "you want to make a reasonable profit on that, don't you"
...or, "bought wrong", I suppose .

Bustman

<< <i>Bustman-
I see plenty of $2,000 and up coins selling with low initial bids and no reserve EVERY week. Probably every day. Just because you don't have the nads to sell the coins with no reserve, please don't attempt to claim that other Members lack the gumption.

I'm with Baccaruda. If Reeded Edge lacks the nads to auction the coins without a reserve, then good ridence. More room for other sell

You can call it gumption, I call it stupidity. I have seen many sellers ( my self included), list an item one week and get very little interest, list the item the next week and it hits the reserve in the first day. Its really luck of the draw on ebay.
If you have enough money that you can afford to take that kind of a chance, good for you.

baccaruda

bustman,

it may be scary to list like that but if you list an item well with a good description, good pictures etc. people ARE watching it. i think i've gotten good deals and bad deals on ebay but i've never "stolen" something at considerably less than what similar items go for.

i've tried to snag items closing at ridiculous times (3am, christmas morning, during the super-bowl etc.) - no luck, someone's always looking to get that same deal.

wallstreetman

Ebay is an auction site, the buyers are supposed to determine what an item sells for, not the seller! BUYERS DONT LIKE RESERVES and neither does Ebay! If you cant take the heat, get out of the kitchen!

Bustman

Even the major auction houses have reserves on their coins. And those are widely advertised auctions that get mass attention.
eBay is soooo hit or miss, even with nice honest to goodness coins. A lot of factors have to be taken into account for the coin to sell well. I have seen it. I have put the same coin up one week, where it does not get more than a handful of bids, the next time it is listed it hits the reserve in the first day. Same coin, same auction venue. There is a bit of luck involved no matter how nice the coin is.
All it would take for those of you who say they don't use reserves is to put up a $2000 coin, and realize it only sold for 500.00 because it ended during the season premier of Survivor or Buffy the Vampire Slayer.
Then you would change your tune!

baccaruda

lol. i was hoping i'd have nothing in common with the "survivor" or "buffy" people.

Bustman

I was certainly not suggesting anyone here watches either one of those captivating TV shows, just using an example.

baccaruda

whew-

if you would have said that the person interested in my collection was busy watching "joe millionaire" i think i'd have to find a new hobby.

Bustman

Not to stir things up again, but I have a question for those of you that hate reserves.
Are you in favor of a seller return policy? My guess is YES.
A buyers protection on a coin is the return policy, a sellers is the reserve. In that regard, eBay is very different from a true auction. The only real coin auction that I know of, that has a return policy, is the Heritage exclusive internet auction.

relayer

Last week it cost a seller $2.30 to list a coin with a $1000 reserve. Today it costs $10.

And, if you look at it from the buyer’s point of view you may be more concerned.

eBay just raised the price on all those coins by $10 and that will get passed right on to the buyer.

OK maybe The Reeded Edge isn’t one of those righteous sellers who are nobly sharing their coins, but

Look at this guys auctions

He has about 10 auctions with $.01 open and a 5-figure reserve.

Last week that cost $23.00. This week it will cost $1000. If you are a buyer, that can’t be good news.

Plus, I bet he didn’t even know he got hit with a $1000 fee instead of $23.00. The weasels at eBay gave no notice, other then on the “General Announcements” bbs.

ANACONDA

"the five and dime sellers are the ones making ebay profitable. not the high-reserve sellers with auctions that sell 5% of the time."

So, now we are blessed with experts in profit origin analysis. The expertise here is bottomless.

My monthly eBay bill is around $3,000. Ebay makes money on me when i list items, when i sell items and when i relist items.

Big items sell after being listed several times, sometimes many, many times. The 1806 quarter in NGC MS 66 that i recently sold for $66,000 on eBay was owned by me for around 8 months.

It was on eBay most of the time. I sold it for a profit and eBay made not only their one and one half percent when i sold it, but they also made money on it every time i listed it.

(and i had people funneled to my eBay store as a result of having a big coin up....)

Ebay can do whatever they want. And the sellers and buyers will respond. It's a dynamic process. They toy with the fee structure from time to time.

I simply don't list coins with reserves anymore. It's unfortuante for everyone (raising fees means less listers and less listers means less competition for buyers which means higher prices for buyers.)

They used to get $2.00 out of me all the time when i woud list things with reserves. Now they don't ever get that money.

We'll work around this.....and i predict that eBay will re-think their new prices.

adrian

LincolnCentMan

I quit using the reserve feature when they started charging a buck for it. I tried listing higher dollar coins starting at a dollar with no reserve. Sometimes you do better than expected. More often you lose. There's a point at which I'd rather keep the coin than sell it at a lower price.... that point is now my opening bid.

Another thing to concider... often times, the coin still goes to the high bidder of reserved in an after auction deal. This shaves the final value fees out of e-bay's cut. This would be a significant amount in the higher dollar auctions. It is possible that e-bay is trying to limit this practice.

Since I no longer use the reserve price, (other than to occasionally show off some of my personal coins at a rediculous price... which will obviously no longer happen), I have no strong feelings either way on this issue.

Best wishes,
David

TomB

I haven't used ebay to sell things in quite some time so I think I might not be clear on something so I would appreciate it if someone would help me with this. You can still list a coin for a $10,000 opening bid without the extra reserve charge, right? If so, it would seem to me that this is a fairly moot argument.

segoja

How many folks have bought high ticket items from the orginator of this thread, paid within 1 minute of the auction ending, paying way more than any offer the seller ever had at a show, then received no feedback!!! I know it's a run on sentence!!!

Seems this seller wants feedback for himself to increase his profits, but can't return the favor.

Had this seller provided feedback, I might be more inclined to address his concerns with E-Bay.

Oh well, guess what comes around goes around.

Paid $1200 for a 1972-D PCGS MS66 Ike from this seller with no feedback left.

fairtraderzz

relayer, You hit it on the nose with your post! Except that they gave us power seller's a month notice regarding this. Many of us coin dealers have been gearing up for this and have planned new methods on postings auction's.
I can see where it will hurt the buyer and seller.
And a few will leave eBay, I know we have been talking about it....

Gary


fairtraderz eBay auction's