Basically, if you're a PowerSeller, you get a little icon next to your user ID which says "PowerSeller". There really is no advantage or disadvantage. Oh, also sometimes eBay sends you crap in the mail. One time I get a certificate mailed to me, which is basically a piece of paper that says thanks for being our bitch.
ha giving too much to ebay ... i just paid them $500 this month alone and the month isn't over yet
That's good my man. I owe them like $300 now. They're making a ton of cash off of me and you, but at least we are making a ton of cash off of buyers =D
Ant, if you are paying $500 in fees and qualify for a 15% discount (the middle of discounts), then that's an extra $75 bucks a month! See how quick it adds up?
I can realistically maintain my 15% discount, and even got a 20% discount once. The requirements for the 20% are really tough to meet IMO though, and 15% is much more expectable.
Even if you have mediocre / poor DSRs then you should still even qualify for a 5% discount. That's still $25 and every dollar matters in collecting...
PS - My eBay bill is usually $300-$400 per month before discounts.
Ant, if you are paying $500 in fees and qualify for a 15% discount (the middle of discounts), then that's an extra $75 bucks a month! See how quick it adds up?
Not exactly... A lot of his fees come from maintaining his eBay store. He's got over 1,000 items, many of which are expensive and at the $0.05 listing. I bet at least $100 of that is in listing fees and store fees, probably closer to $200 since he does a lot of standard auctions to drive in business. Also, he, like the VAST majority of eBay users, doesn't qualify for the 15%. It's just a fact of the averages of doing lots of business like he does, that he's not going to get all 4.8's. He just hit 1,000 FB, most of it from sales...
If you're a higher-volume sellers, you virtually have to offer free shipping in order to keep your S&H DSR up at a 4.8, because Amazon and other eBay sellers do and you need to keep up with Jones. I wrote an entire e-Zine article on the folly of that, in plain mathematics (which few people stuck with and actually read). Otherwise it's just an inevitability, you're going to get bastard buyers who hate you for no real reason, and crap on your DSR's. People like that guy who negs 75% of purchases like we were discussing in the WARNING/BAD thread.
^ Dang, allow me to speak about that since you obviously are pretty knowledgeable in this realm.
I can maintain 4.8 DSR's pretty easily by only charging $3.95 on shipping for an individual game and $14.99 on systems. If you are playing by those rules I think you'd very easily hover around the 4.8 Shipping DSR. Might miss it and mike make it some months.
However, if you add a few free shipping listings here and there, that'll make the difference. I'm a math major and when Free Shipping is used in moderation and wisely, it will work out in your favor. You will save money in the long run.
There is a very strategic approach to knowing when to use free shipping. For me, I always use the subtitle feature when I sell a system to help my listing stand out and separate it from the plethora of systems available on the bay. That is $0.50 cent fee right there. Free shipping reduces that fee to zero. You've already acknowledged that Free Shipping can be the difference between 5% and 15% discounts, and at my volume that is the difference between $15 or $45. $30 is substantial enough.
Examples:
When not to use Free Shipping:
When it bumps up your insertion cost to the next tier. For example, I sell a refurbed system with Mario / Duck Hunt for $44.99 + $14.99 S/H. That's a $1.00 listing fee. If I listed it for $59.99 with Free Shipping which is essentially the same damn price to the naked eye, then I'm now paying $2.00 for a listing fee (went above $49.99) and my final value fees will increase by 53 cents ($15.00*3.5%).
That's $1.53 extra in fees that I'll pay.
When free shipping is good:
When it doesn't bump your insertion fee and you are selling a valuable item / lot (like system). If you plan to advertise with a sub title, then Free Shipping in this case is a MUST. Why? Here's an example:
I sell a refurbed system with Mario 1 2 3 for $69.99 + $14.99 S/H. I also use a subtitle on systems, so that's a $2.50 listing fee. Now once again I could sell this at $84.99 with Free shipping which is essentially the same price. Now my insertion fee is actually cheaper at $2.00 even because the subtitle is now free. Once again my FVF will increase by 53 cents, so I'm paying an extra 3 cents total to do the listing with Free Shipping.
Not to mention I'm
A) Increasing my visibility as Free Shipping plays a huge role in Best Match now.
Increasing my likelihood of reaching 15% discounts instead of 5%.
C) Doubling my Power Seller discount on this item only. In other words, if I qualified for 15% off discounts at the end of the month, then I'd actually get a 30% discount on this individual item. Any FREE SHIPPING item will have it's discounted doubled.
Free Shipping pays off when used right.
Dang, I'll be sure to check your article and see what kind of points you present. I love talking numbers.....
So at your volume, it's "free" for you to offer free shipping, up to $250 (since you said the difference is $30, and $30 / .12 (store FVF) = $250). Makes sense if you can swing it.
I'm just always so petrified of random angry buyers, I'd rather not take the risk of paying out that extra $30 in fees, then still falling short. That's the general tone of my article - negs are an inevitability, and basing your business strategy on DSR's that you, in reality, have less control over than we'd like to admit, is risky.
One problem that arises with free shipping items is getting people to pick up more stuff from the store. If the first item's free, but additional items are still an extra combined shipping charge, it not only confuses, but also deters. So increasing traffic to your store can actually undermine the DSRs you're trying to preserve ("that seller gave me free shipping on the big thing, but still charged me on the little game they put in the box! 1/5 for both!") or simply not sell other products because of the extra charge involved.
And offering free shipping on EVERYTHING is a poor deal all-around, but I'm sure you've seen the charts in my article by now and know that.
I don't have an eBay store and don't think they are necessary at all. I do all of my selling auction style only and don't need to pay a monthly store fee. My business model is based on moving inventory fast and I don't need to let an item sit for 30 days hoping someone will eventually bite at my asking price. I'll take a lower selling price and move the item in a week to make room for more stuff.
I also qualify for the 20% FVF discount as of right now for this month. I know I can meet the 15% criteria every month in my sleep no matter what circumstances arise. If you are committed to providing good service, you'll be able to withstand an "outlier" of bad data that is a 0 star DSR rating...
The qualification period for those discounts is only the previous 30 day period. We qualified for it on the last invoice (with $4.95 game shipping). As for the discount, it's only a % off your FVF, not the rest. Granted, ebay has backloaded alot of the fees now so it's a better discount than it may have once been, but it's still just a token when you're paying thousands in fees every month.
Ant, if you are paying $500 in fees and qualify for a 15% discount (the middle of discounts), then that's an extra $75 bucks a month! See how quick it adds up?
Wait isn't the power seller discount a percent of a percent, and not just straight up 15% off of your overall ebay fees? Doesn't that make the DSR thing not worth anything?
What would someone actually get back from 500$ of fees?
Right Potato, if you sell a $10 item from your store, you're charged 12%, or $1.20, and you get a rebate of 5% of that, or $0.06. Sell 100 $10 items and you get $6.00 back. If you do more volume, or get a higher discount plateau it can add up, but really compared to the amount you're paying them it's a very small drop in the bucket.
Really, it's just nice to get some small reward, even though it's really not monetarily substantial. It's not going to make or break any business, but you can't ever say eBay didn't give you anything "real"
If you are spending more than $500 in fees you are going to get more than $3 back. While Dan's math is still correct, he's approaching this with a very skewed view.
You should think of it like this, probably about 70-80% of your total eBay bill is comprised of Final Value Fees. I"ll use my exact November 2008 invoice amounts. My total bill for the month before any deductions was $252.81. Of this $252, exactly $177.07 of it was Final Value Fees (70.04%). I also only sell things straight auction style so I'm paying at least $0.25 to list every item, and much more on higher priced stuff. I also pay a lower FVF than a fixed price store listing would have.
This implies that if you are doing cheap store listings, then even more of your bill (80-90%) is going to be Final Value Fees.
So back to my example. Since I qualified for the 15% discount rate on FVFs, a total of $26.56 (15% of $177.07) was deducted from my bill. Further more, I got double discounts on some Free Shipping items which added up to an extra $7.99 off. Thus my TOTAL EBAY BILL was reduced from $252.81 to $218.26.
Do the math, I saved exactly 13.7% off my TOTAL bill.
You argued that 15% off FVFs is nowhere close to 15% off the total bill. Even if you remove the Free Shipping bonus discounts ($7.99), then the math still works out to me saving 10.5% off my total bill with a 15% discount off FVFs.
So maybe I was a little biased before. If your eBay bill is $500, then if you qualify for the 15% discount you'd save $52.50 (~10.5%, which is 70% of 15%) from your total bill. While that might not be $75 as I originally claimed, it is still more than that ridiculous $3 estimate quoted above.
- Sorry if I lost anyone with the math, but math is my strong subject.
Right Potato, if you sell a $10 item from your store, you're charged 12%, or $1.20, and you get a rebate of 5% of that, or $0.06. Sell 100 $10 items and you get $6.00 back. If you do more volume, or get a higher discount plateau it can add up, but really compared to the amount you're paying them it's a very small drop in the bucket.
Originally posted by: Potato
So 500$ in fees would only get you about 3$ back, and not 75$.
Guess it's better than nothing...
I see why you assumed this now. You guys are confusing SALES with FEES, two very different numbers.
If you have $500 in FEES, then that means you would have sold roughly 500 $10 items because you'd be hit with a $1 fee per sale. So really you'd have $5,000 in SALES and $500 in FEES. It is easy to get lost when you don't distinguish the two.
Potato - You thought that the sales in Dang's example were fees. You thought 100 $10 items meant $1000 in fees, but it really meant $1000 in sales and $100 in fees. Then you incorrectly halved the $6.00 estimate to $3.00.
You really should have multiplied by 5 to get 6 x 5 = $30 as a ballpark estimate. However, if you see the post above then I believe the number is even much higher.
- Sorry again for another math intensive post but I'm bored at work.
I'd only say "very skewed" because it seems that your underlying tone is "Well the benefits are better than nothing, but but those DSRs aren't really worth the extra added effort".
While my approach is "The savings are quite substantial and worth actively trying to improve your DSR ratings to save money."
That is all, no further explanation necessary and think we all agree now.
Comments
But apart from the obvious, no, no drawback (like with Paypal where they charge you 2.9% for a Pro account).
ha giving too much to ebay ... i just paid them $500 this month alone and the month isn't over yet
That's good my man. I owe them like $300 now. They're making a ton of cash off of me and you, but at least we are making a ton of cash off of buyers =D
I can realistically maintain my 15% discount, and even got a 20% discount once. The requirements for the 20% are really tough to meet IMO though, and 15% is much more expectable.
Even if you have mediocre / poor DSRs then you should still even qualify for a 5% discount. That's still $25 and every dollar matters in collecting...
PS - My eBay bill is usually $300-$400 per month before discounts.
Ant, if you are paying $500 in fees and qualify for a 15% discount (the middle of discounts), then that's an extra $75 bucks a month! See how quick it adds up?
Not exactly... A lot of his fees come from maintaining his eBay store. He's got over 1,000 items, many of which are expensive and at the $0.05 listing. I bet at least $100 of that is in listing fees and store fees, probably closer to $200 since he does a lot of standard auctions to drive in business. Also, he, like the VAST majority of eBay users, doesn't qualify for the 15%. It's just a fact of the averages of doing lots of business like he does, that he's not going to get all 4.8's. He just hit 1,000 FB, most of it from sales...
If you're a higher-volume sellers, you virtually have to offer free shipping in order to keep your S&H DSR up at a 4.8, because Amazon and other eBay sellers do and you need to keep up with Jones. I wrote an entire e-Zine article on the folly of that, in plain mathematics (which few people stuck with and actually read). Otherwise it's just an inevitability, you're going to get bastard buyers who hate you for no real reason, and crap on your DSR's. People like that guy who negs 75% of purchases like we were discussing in the WARNING/BAD thread.
I can maintain 4.8 DSR's pretty easily by only charging $3.95 on shipping for an individual game and $14.99 on systems. If you are playing by those rules I think you'd very easily hover around the 4.8 Shipping DSR. Might miss it and mike make it some months.
However, if you add a few free shipping listings here and there, that'll make the difference. I'm a math major and when Free Shipping is used in moderation and wisely, it will work out in your favor. You will save money in the long run.
There is a very strategic approach to knowing when to use free shipping. For me, I always use the subtitle feature when I sell a system to help my listing stand out and separate it from the plethora of systems available on the bay. That is $0.50 cent fee right there. Free shipping reduces that fee to zero. You've already acknowledged that Free Shipping can be the difference between 5% and 15% discounts, and at my volume that is the difference between $15 or $45. $30 is substantial enough.
Examples:
When not to use Free Shipping:
When it bumps up your insertion cost to the next tier. For example, I sell a refurbed system with Mario / Duck Hunt for $44.99 + $14.99 S/H. That's a $1.00 listing fee. If I listed it for $59.99 with Free Shipping which is essentially the same damn price to the naked eye, then I'm now paying $2.00 for a listing fee (went above $49.99) and my final value fees will increase by 53 cents ($15.00*3.5%).
That's $1.53 extra in fees that I'll pay.
When free shipping is good:
When it doesn't bump your insertion fee and you are selling a valuable item / lot (like system). If you plan to advertise with a sub title, then Free Shipping in this case is a MUST. Why? Here's an example:
I sell a refurbed system with Mario 1 2 3 for $69.99 + $14.99 S/H. I also use a subtitle on systems, so that's a $2.50 listing fee. Now once again I could sell this at $84.99 with Free shipping which is essentially the same price. Now my insertion fee is actually cheaper at $2.00 even because the subtitle is now free. Once again my FVF will increase by 53 cents, so I'm paying an extra 3 cents total to do the listing with Free Shipping.
Not to mention I'm
A) Increasing my visibility as Free Shipping plays a huge role in Best Match now.
C) Doubling my Power Seller discount on this item only. In other words, if I qualified for 15% off discounts at the end of the month, then I'd actually get a 30% discount on this individual item. Any FREE SHIPPING item will have it's discounted doubled.
Free Shipping pays off when used right.
Dang, I'll be sure to check your article and see what kind of points you present. I love talking numbers.....
I'm just always so petrified of random angry buyers, I'd rather not take the risk of paying out that extra $30 in fees, then still falling short. That's the general tone of my article - negs are an inevitability, and basing your business strategy on DSR's that you, in reality, have less control over than we'd like to admit, is risky.
One problem that arises with free shipping items is getting people to pick up more stuff from the store. If the first item's free, but additional items are still an extra combined shipping charge, it not only confuses, but also deters. So increasing traffic to your store can actually undermine the DSRs you're trying to preserve ("that seller gave me free shipping on the big thing, but still charged me on the little game they put in the box! 1/5 for both!") or simply not sell other products because of the extra charge involved.
And offering free shipping on EVERYTHING is a poor deal all-around, but I'm sure you've seen the charts in my article by now and know that.
I also qualify for the 20% FVF discount as of right now for this month. I know I can meet the 15% criteria every month in my sleep no matter what circumstances arise. If you are committed to providing good service, you'll be able to withstand an "outlier" of bad data that is a 0 star DSR rating...
Ant, if you are paying $500 in fees and qualify for a 15% discount (the middle of discounts), then that's an extra $75 bucks a month! See how quick it adds up?
Wait isn't the power seller discount a percent of a percent, and not just straight up 15% off of your overall ebay fees? Doesn't that make the DSR thing not worth anything?
Really, it's just nice to get some small reward, even though it's really not monetarily substantial. It's not going to make or break any business, but you can't ever say eBay didn't give you anything "real"
Guess it's better than nothing...
You should think of it like this, probably about 70-80% of your total eBay bill is comprised of Final Value Fees. I"ll use my exact November 2008 invoice amounts. My total bill for the month before any deductions was $252.81. Of this $252, exactly $177.07 of it was Final Value Fees (70.04%). I also only sell things straight auction style so I'm paying at least $0.25 to list every item, and much more on higher priced stuff. I also pay a lower FVF than a fixed price store listing would have.
This implies that if you are doing cheap store listings, then even more of your bill (80-90%) is going to be Final Value Fees.
So back to my example. Since I qualified for the 15% discount rate on FVFs, a total of $26.56 (15% of $177.07) was deducted from my bill. Further more, I got double discounts on some Free Shipping items which added up to an extra $7.99 off. Thus my TOTAL EBAY BILL was reduced from $252.81 to $218.26.
Do the math, I saved exactly 13.7% off my TOTAL bill.
You argued that 15% off FVFs is nowhere close to 15% off the total bill. Even if you remove the Free Shipping bonus discounts ($7.99), then the math still works out to me saving 10.5% off my total bill with a 15% discount off FVFs.
So maybe I was a little biased before. If your eBay bill is $500, then if you qualify for the 15% discount you'd save $52.50 (~10.5%, which is 70% of 15%) from your total bill. While that might not be $75 as I originally claimed, it is still more than that ridiculous $3 estimate quoted above.
- Sorry if I lost anyone with the math, but math is my strong subject.
Right Potato, if you sell a $10 item from your store, you're charged 12%, or $1.20, and you get a rebate of 5% of that, or $0.06. Sell 100 $10 items and you get $6.00 back. If you do more volume, or get a higher discount plateau it can add up, but really compared to the amount you're paying them it's a very small drop in the bucket.
So 500$ in fees would only get you about 3$ back, and not 75$.
Guess it's better than nothing...
I see why you assumed this now. You guys are confusing SALES with FEES, two very different numbers.
If you have $500 in FEES, then that means you would have sold roughly 500 $10 items because you'd be hit with a $1 fee per sale. So really you'd have $5,000 in SALES and $500 in FEES. It is easy to get lost when you don't distinguish the two.
Potato - You thought that the sales in Dang's example were fees. You thought 100 $10 items meant $1000 in fees, but it really meant $1000 in sales and $100 in fees. Then you incorrectly halved the $6.00 estimate to $3.00.
You really should have multiplied by 5 to get 6 x 5 = $30 as a ballpark estimate. However, if you see the post above then I believe the number is even much higher.
- Sorry again for another math intensive post but I'm bored at work.
Edit: why is my view "very skewed?" With respect to what?
While my approach is "The savings are quite substantial and worth actively trying to improve your DSR ratings to save money."
That is all, no further explanation necessary and think we all agree now.