eBay to Charge Fees on Seller Shipping Charges

The Online Seller's News, March 22, 2011, Volume 11, No. 6

Tips, Tools, News and Resources for eBay, Amazon and independent Online Sellers ~ Published Twice Monthly since 1999
by: Skip McGrath

In This Issue:

Musings from eBay and beyond

1. eBay to Charge Fees on Seller Shipping Charges
2. How to Make Money with The Amazon Affiliate Program
3. eBay Spring 2011 Announcements & Policy Changes
4. Finding money to Grow Your eBay & Amazon Business
5. More Wholesale Sources from The ASD/AMD Wholesale Trade Show

"Don't go around saying the world owes you a living. The world owes you nothing. It was here first." ~ Mark Twain

Musings for March 2011

This is part-II of our annual Wholesale Sourcing Issue. Each year I attend the Seattle Gift Show in early February and the ASD/AMD Wholesale Trade Show in Las Vegas in late February/early March. Between these two shows I am exposed to over 4000 wholesale sources in dozens of categories. In the last issue I listed 25 new sources and here are another 25. I will be featuring more of these over the next couple of months. Enjoy!

There are only a few days left to get The Proven Amazon Course at the $40-off discounted price before the price goes up at the end of the month. The feedback from our readers who have already purchased has been excellent and there are hundreds of posts on the forum (where I am participating) where clients can get answers from experts. Click here to learn more about The Proven Amazon Course. You won’t be disappointed. This course has the lowest refund-request rate of any product I have ever promoted –including many of mine. (Note – this course is completely different from my book on the Amazon Affiliate Program).

When I released my latest book, How To Make Money with The Amazon Affiliate Program (see article #2 below), I neglected to limit sales to North Carolina Illinois and Colorado –states that Amazon has pulled out of because those states insist Amazon collect and pay sales tax on sales that originate with affiliates in those states.

So if any of you from North Carolina, Colorado or Illinois bought my book and cannot use it, please email me for a refund, which I will gladly take care of.  I did know about the issue but in my hurry to write the sales letter and release the book I simply forgot about it. (Thanks to one of my readers, Sue W., for bringing this to my attention)

I recently found a great little eBook by Steve Poke called Public Domain Profits. I made a deal with Steve to promote his program if he would give the book away for free. It gets even better. Public Domain Profits is not only free; it comes with Master Resell Rights. That’s right – you can turn around and sell this book. If you sell it on eBay you will have to put it on a CD or DVD since eBay’s policy on information products is that you must ship a physical product. You can get this done cheaply ($1.75 each) at www.kunaki.com. I think this book is easily worth $20 or more.

Steve agreed to this so he could promote his larger Public Domain program, which is also excellent and as part of the deal he agreed to cut the price for my readers from $67.00 to $27.00.  NOTE:  Please download the PDF and save it to your computer before clicking on the links to buy.  If you read the issue and click on the links in your web  browser it will not take you to the discount page.

But even if you don’t get his expanded program, Public Domain Profits is an excellent companion to my book How to Create and Sell Information Products and will teach you a ton of stuff about how to make money with public domain products.

Lets get started with this month’s articles:

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1. eBay to Charge Fees on Seller Shipping Charges

eBay again upset sellers with their new fee announcement –this time they raised fees to include the amount sellers charge buyers for shipping. Here are the details from eBay:

• Sellers subscribed to a Store: To reward free and low-cost shipping, Final value Fee rates will be reduced and applied to the total amount of sale—including shipping—starting July 6. As always, you get the same low Insertion Fees—as low as 3¢.


• Sellers not subscribed to a Store: Starting April 19, list Auction-style FREE up to 50 items a month—any start price—and add the Buy It Now option FREE to capture those buyers in a hurry. You pay only if your item sells. Auction-style Final Value Fees will apply to the total amount of sale, including shipping. Starting July 6, Fixed Price Final Value Fee rates will be reduced and applied to the total amount of sale, including shipping.


• Seller discounts: eBay Top-rated sellers continue to earn 20% discount on Final Value Fees. Current 5% discount will be retired June 1 for PowerSellers who are not Top-rated. All other benefits continue for all.

eBay later clarified the policy on the message board to state that the extra fees would not apply to 1-day expedited shipping or international shipping. For these items eBay will apply the fee that they would have to a standard shipping cost.

The eBay message boards were on fire with sellers complaining about the increase. Here are a few typical posts:

And this fee increase is supposed to help our bottom line HOW?
I will have to raise my shipping prices to cover your new fees. It's bad enough that UPS has/will be increasing the fuel surcharge.

The economy is still off track. My sales are down 30%. Increasing prices will drive more customers away, and higher shipping prices will ding stars. I have not raised shipping prices in over three years. This fee increase is also unfair to eBay BUYERS

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I strongly disagree with final value fees applied to shipping costs. I currently lose money with my shipping costs just to keep competitive. Now eBay wants to take a chunk of that from me? It makes it erroneous to sell any low dollar items in quantity as they were barely worth it before, and now we lose even more money to ship it? Is it worth spending $3.49 (while charging 2.99) with shipping, confirmation, and a bubble envelope for a $1-3 item, with eBay taking a fee on all of it? That means I'm making about 30 cents to $2.30 to drive my item to the post office and ship it, (time and gas). Not worth it. I am going to have to raise my shipping cost $1 to make up for the fee, not lower it.

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So if I sell one 45 rpm record for 99 cents and charge a reasonable s/h of $3.00, my FVF is increasing from 9 cents to 36 cents. That is a 400% increase (.09 * 400%)! After PayPal takes their cut, my profit drops from 48 cents to 21 cents. At that point it becomes a complete waste of my time. My DSRs are 4.9 across the board. Why does eBay want to drive away us small, part-time sellers who depend on this site for a little (but much needed) additional income?

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I too am disappointed with this update. I managed another store over the holidays for a liquidator that had the Top Seller Rating. However due to the winter storms and heavy holiday traffic a couple of the items arrived slowly (they were shipped right away after payment, usually the same day). Three people gave us two stars for shipping time (out of 500+ products sold for the holidays) and we lost the Top Seller Rating and the 20% discount on fees.

Actions speak louder than words and eBay's actions can tell a seller that:

• eBay does not care about your success and will find minute infractions so they don't have to give you discounts on fees.


• eBay will not effectively promote itself (anyone seen an eBay commercial in the last several years?) or your store


• eBay knows that it is on the way out (my sales are in the dumps) and is generally squeezing every penny out its sellers (adding fees to shipping) as its gasps away.

As for that liquidator I am working for. We closed our eBay store and have an e-commerce site coming up where our fees will be in the 3% range. So bravo to you eBay!

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As you can see, sellers are pretty unhappy. There were similar passionate complaints at eBay’s Town Hall Meeting. So what is eBay’s answer to this? “Raise your prices!” That’s right –eBay says this will not cause any problems –all we have to do is raise prices. What planet are these guys on? Are they living in the same economy the rest of us are? Maybe the economy in San Jose where eBay is located is booming and there is no unemployment or high gas prices.

One of the biggest issues revolves around eBay’s Multi-variation listing format. This is where you can list one product with different colors, sizes, models, specs and so on. The Multi-variation listing tool has been a huge money and time saver for eBay sellers and one of the most successful tools eBay has introduced in the past few years. Let’s say a buyer buys 4 items from you. The buyer will be assessed 4 shipping charges. When the seller makes the invoice changes, or issues a partial

credit –eBay will keep the FVF based on what they calculate –not on what the seller actually collects from the buyer.

Lets do some math and look at some actual examples of how this will affect seller’s pocketbooks:

The first example is Fixed Price no store. The insertion fee changes based on the store level, but it hasn’t changed with the new fees. The FVF are the same for store subscribers and FVF. This is without any TRS discount.

Fixed Price with no store subscription

Fixed price with Basic Store Subscription

Auction with no store subscription

In this example remember you get 50- free auction style listings per month if you are not a store subscriber, so the last column shows the cost for your first 50 listings.

Auction Style listing with Basic Store Subscription

The break-even point for store subscribers is 40 listings per month. Less than that and it is better to pay the higher fees rather than the monthly fee.

Remember you also have to add the PayPal fees to these.

Sellers who were already offering free shipping will actually see a discount as they were already paying fees on their shipping and this release will give them a small discount on fees.

So what to make of all this? Let me repeat something I said in the November 2010 issue of this newsletter:

eBay is a corporation. They answer to Wall Street –not eBay members. All eBay policies are driven by one thing – earning more fees. Anything that gets in the way of that is road- kill to them. Lest you think I am being too harsh –most (but not all) large public corporations are like this. I have had experiences with Google that are far worse than this. There is something about these types of businesses. Once the original founders leave or they just get so big –they forget what got them there and take on an arrogance that is only matched by government bureaucrats.

So, will I stop selling on eBay because of these new fees and policies? No! eBay used to be the heart and soul of my online business, but today they are just one more channel. And that is the way you should approach it.

My eBay sales used to represent the majority of my online income, but today they are less than 25%. And whereas eBay was once my most profitable channel, it now represents the lowest profit margin of any of my channels. Yes the margins are lower than they used to be –but still profitable –so why would I want to give that up? However, depending on what you sell and what type of listing that work for you, the new fees could put you in the negative to the point where it is no longer worth it. I am seeing some sellers reach that point.

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2. How to Make Money with The Amazon Affiliate Program

I have been teasing this for a while, but my newest book, How to Make Money with The Amazon Affiliate Program is finally available. I actually released it last week in an email to my readers and the response was overwhelming.

I have been working on this book on and off for a few months. Every time I would get close to finishing something would change or I would discover a new tool. But the book is now on sale.

Since times are tough and eBay fees are going up, I am offering a discount of $10 off of the full price through the end of March. After that the price will increase to the same price as my other eBooks - $27.00. Just use this coupon code when you check out SAV10AMZ.

As I was working on this, a funny thing happened that played right into this strategy. I lost my exclusive franchise to sell the EZ Cube photo studios (www.ezauctiontools.com) that I have had for ten years. Since I already had a website that featured the products, all I had to do was remove the shopping cart and attach Amazon affiliate links to all of the products. Not only that, I added a new section for Budget Light Tents a section for Digital Cameras for eBay and Amazon Sellers and Ten Best Digital Photography Books. The affiliate links have only been active a few weeks and are already generating an excellent income stream. Take a look at www.ezauctiontools.com to see a good example of how my system works.

And get your copy of , How to Make Money with The Amazon Affiliate Program with the limited time $10-discount before it ends. Don’t forget to use the coupon code: SAV10AMZ.

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3. eBay Spring 2011 Announcements & Policy Changes

In addition to the fee changes I wrote about in the first article, there are other changes as well in the Spring 2011 Announcement. Let’s look at eBay’s announcement first. My comments appear in red below them.

• New eBay Shopping Cart let’s buyers add items, both Auction and Fixed Price, from multiple sellers and pay in one easy checkout—making it fast and easy to buy more with each visit. This was tested in the UK with mixed results. I think we will just have to wait and see how this complicates seller activity. I see real issues with combined shipping rates, fees on shipping and returns and refunds.


• New way to shop for popular products coming to more electronics categories and books. Listing with the eBay catalog will be required in these categories. I don’t understand eBay’s strategy here –seems to be based on getting greater conformity and less exposure for individual sellers.


• Clothing, Shoes & Accessories buyers will find your listings even faster shopping by brand, style, color, size type, and size. Item specifics will be required in these categories. This is probably a positive change as it will make it easier for buyers to find things and it enforces discipline on sellers to provide complete information which is always a good thing.


• Motors Parts & Accessories: To build confidence and reduce buyer questions, sellers will be required to specify shipping and handling time, return policy, and item condition. This is one of eBay’s policies I have always supported. Why did it take so long to add to eBay Motors?


• For sellers who don’t meet eBay’s minimum selling standards and sellers with little or no selling history, funds from buyer payments will be unavailable for a period of time to ensure successful fulfillment.
  I have mixed feelings about this. On one hand it does help prevent fraud and keeps really incompetent sellers in check –but it does hurt the new small seller who is doing everything right and in the long run will probably hurt the growth of new small sellers (which may actually be what the new eBay wants).


• New communications hub helps you manage contacts with buyers from one tab in My eBay. Probably a good thing, but every time eBay does something like this it takes me a few weeks to find everything. eBay needs to do a better long-term job of planning these things and just make big changes every few years rather than constant small changes that drive sellers crazy.


• Sell worldwide: Specifying international shipping cost and carrier will be required to build confidence and reduce buyer questions. Updates to the Seller Dashboard will give you more insights into your global performance standing, helping you improve your service and grow sales. I support this!


• Category and Item Specific changes consolidated with these updates. Find out if your listings are affected. Constant change here too.

Most of these changes will not actually take place until the period of April 19^th to May 23^rd. So you have a little time to cope with them.

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4. Finding money to Grow Your eBay & Amazon Business

If you sell on eBay or Amazon you have probably found yourself needing cash at some point. Perhaps you needed to buy new equipment, hire some help, purchase inventory or any of the myriad things a business needs to grow.

Banks are reluctant to lend money to small businesses unless you have a history of several years of operations. Walk into your bank and ask for a loan to operate your eBay business and they will offer you a second mortgage loan on your house.

A couple of years ago, I told you about a new person-to-person lending site called Prosper. At prosper you could apply for a 3-year loan up to $25,000 and lenders would bid on a portion of your loan with the interest rate being set by the bidders. Good credit and sound operating history and you would get a loan with a low rate. But if your credit was poor or the thing you were borrowing for was deemed risky, then you would pay a high rate –as high as 24%.

Prosper used to be the only game in town to find money to grow your business. Now there is a new –and I think better, option for eBay and Amazon sellers who need cash to fund their operations: Kabbage.com. Notice I am not talking about capital to start a business. Kabbage is a service that helps online sellers find money to fund ongoing operations.

Kabbage was created because traditional methods of financing are not available or are not the best option for a variety of reasons. Personal credit cards can help in certain areas of your business, but the downside is that they aren’t accepted everywhere you need to purchase inventory and you certainly can’t pay seasonal employees with a credit card.

Withdrawing funds from your savings or retirement accounts can leave you short handed if an emergency crops up and are often accompanied by unwanted penalties and fees. Traditional bank loans are often not even an option due to the speed (or lack thereof) it takes to get your hands on the cash.

Kabbage can provide you cash in as little as 10 minutes into your PayPal account. Kabbage also uses eBay seller information (seller rating, how long you’ve been in business, transaction history), not just your credit score, to judge whether to provide capital to the online seller.

With the cash you get from Kabbage you can do anything you need to grow your online business including:

1. Negotiating Better Terms and Pricing on Inventory – Buy wholesale, clean out an estate sale or auction, or negotiate better payment terms with your regular suppliers.


2. Hiring Help – Stop spending your time on the little details in your business when you could be out there making deals with new suppliers and customers. Hire somebody to maintain your website and update your listings. Or to do your customer service. Or even somebody to help assemble, pack and ship products.


3. Advertising and Marketing – There are a lot of great ecommerce stores out there that nobody knows about. Even just one great marketing or advertising campaign can get your online store in front of the folks who want what you’re selling.

Where traditional methods of financing have fallen short for online businesses, Kabbage has created a way for online businesses to grow. Kabbage can provide cash to you to make sure your needs are met when you need cash the most.

Right now Kabbage gets their information from your eBay account and used that information to decide how much money they will advance you. Payments are made into your PayPal account and you pay the cash advances back through PayPal also. In the near future Kabbage hopes to add Amazon functionality to their model. So right now, you can use the money for any aspect of your online business, but the amount they will advance you is based on the level of your eBay business. Click here for an easy application, an instant decision, and immediate funding for your business.

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5. More Wholesale Sources from The ASD/AMD Wholesale Trade Show

This is the second part of our Annual wholesale trade show issue. Here are another 25 sources that I found at the ASD/AMD Wholesale Trade Show.

1. Hotery Products Company makes a complete line of butane torches in all sizes from mini-torches, to Food torches to full sized tool torches.


2. Alamode Fashion Jewelry sells a large line of over 7000 products from sterling silver, rings, bracelets, pendants, necklaces, brooches and charms. They are known for providing a wide range of quality jewelry at affordable prices.


3. Unique jewelry by Fay is a wholesaler of earring charms, pins, slides, pendants, fashion jewelry, chains, earrings, cell phone charms, charms, necklaces, bracelets, Christmas jewelry, Halloween jewelry, thanksgiving jewelry, holiday jewelry, angel pins, religious jewelry and more.


4. Accessory Wholesale is an extensive source for Wholesale Fashion Jewelry, Costume Jewelry, Tiaras, Rhinestone and Bridal Jewelry, Bracelets, Pendants, Earrings, Hats and Mardi Gras Accessories.


5. Design Time Watch, Inc. sells several lines of watches from fashion watches priced below $50 to the beautiful Giorgio Milano series of watches that sell for around $500.  Here are some photos of a few of the watches they sell.


6. The A1 Watch Co. of New York is a manufacturer, distributor and wholesaler of fashion watches. You will have to email them through the website for wholesale information. Be sure and mention the ASD/AMD trade show.


7. Brooke Distributing is a wholesale distributor for Samsung, Pentax, Panasonic, Sharpe, Techniks, and many other electronic companies. You will have to email them from the web site to get a dealer application. Just fill out the application and fax it back and they will give you access to the wholesale pricing for a wide range of digital cameras and electronics.


8. Dragon Distributing is a leading, non-competing wholesale distributor who specializes in the distribution of automotive and consumer electronics to independent dealers. You will need a tax resale number and a commercial checking account to do business with them. They carry all the hot brands of car-audio amps, speakers, cable and accessories.  Just fill out the dealer application on the website. It looks pretty intimidating, but they will work with just about any online seller.


9. TeleBrands Wholesale is probably the leading supplier of ASOTV goods to eBay sellers. There are several companies in this industry -- but this one is the best in my opinion. They sell most products in one-case lots and the prices are typically 50-60% below the advertised on TV price but might only be 20% to 30% above the eBay price.


10. CApico Accessories carries several name brands of belts, wallets and other small leather goods.


11. Central Restaurant Products carries a complete line of wholesale restaurant equipment and supplies.


12. Bell Golf Manufactures and wholesales golf clubs to dealers, distributors and online sellers. Their products include titanium woods, steel woods, irons, wedges, putters, grips, shafts, accessories, components including Synchron, Acer, Oxygen, Power Play, Prof. Open, PP System, Bionik, Four Ball Blade, Technica, Karma, Lamkin, Golf Pride, Winn, Apollo, True Temper, Powerflex and Aldila.


13. Boone's Antiques Yes, you can buy antiques wholesale. This company supplies antique dealers and decorators all over the country. Boone's Antiques main store is in Wilson, North Carolina. (Actually, "store" is an understatement. With 4 acres of antiques, they are probably the largest antique's dealer on the East Coast).

    Their pieces come from all over the world and they sell wholesale and retail to a wide range of clients and ship anywhere. You can see a sampling of products and find out more from the web site or by calling (252)237-1508. Whatever you're looking for, they probably have it, or can get it for you. The prices on the web site are not the best they sell for. Always call them for a quote letting them know you are a reseller.



14. GMC International does not have a website. They are a dealer in high-end antiques, Objects D’Art and Estate jewelry that sell to the trade only (that means wholesale). They are located in Westfield NJ and you can contact them at 908-518-1900 or Fax them at 908-518-1903. Ask for Leon Remoko.


15. Greatrep.com is an association of hundreds of small designers and manufacturers. When you deal through GreatRep, you are dealing direct with the manufacturer or master importer of the product. Not all of the companies listed on GreatRep will work with eBay and website sellers, but most of them will. If you run into one that doesn’t just move on to the next one. Just fill out a short online form to get access.

    Wholesale Books & Media

    Media products (Books, CDs and DVDs) are great sellers on eBay, Amazon and at Flea Markets. There is no one single supplier for all types of books; you will need several to cover the market. Here are a few companies that distribute and wholesale books and media products.



16. Noah's Ark provides a wide variety of items at discount pricing to stores, online sellers, distributors, & churches. Products include Christian movies and family movies on DVD, Christian books, gifts, T-shirts, ties, caps, Christian music CDs, Spanish products & more.


17. Jay's Record and Tapes, Inc. offers excellent deals on niche music CDs as low as $1.10 or you can check out his package deals of 110 CDs for $99.00. That works out to $0.90 per CD.


18. Price Zone carries a nice line of large woks and cookware for outdoor use including large pot burners, utensils and butane burners.


19. Magic Masseuse is an FDA Approved bioelectric stimulator (TENS unit) used to stimulate and massage your muscles. Your muscles respond to the impulses by contracting and relaxing rhythmically. The Magic Masseuse is the consumer version of the same units used by chiropractors and massage therapists. The device allows you to set both strength and type of massage - Tap, Stroke, Knead, Parego, Massage, Acupuncture and Cupping.

    Figure 1 Magic Masseuse

    The prices on the website are retail. Click on the link that says Wholesale information and contact them for wholesale pricing.



20. Rising International sells a line of funky and cute colorful clothing from Nepal. When you get to the website you can see the product overview, but you need to contact them to get registered first before you can see the product detail and pricing.
    


21. Air-Val International is a Spanish company based in Barcelona. They sell a line of licensed children’s perfumes and cosmetics. Some of the brands include Barbie, Phineus and Ferb, most of the Disney characters, Hana Montana and Dora the Explorer. Not too much info on the website, but contact them and they will send you plenty of information.
    


22. Lampson & Goodnow sells a complete line of high quality kitchen and chef’s knives. They operate with local manufacturing reps. So just go to their website and send them an email asking for the name of a rep that covers your area. (You have to tell them where you are located).


23. The Toysmith Group is located near us in Sumner Washington. They sell a wonderful line of educational toys and games that are creative, inspiring and imaginative for kids from 5 to 12.


24. The Real Insect Company of Menlo Park, CA sells a large line of insects embedded in Lucite blocks. Their products include key rings, bottle openers, pen stands, bracelets and pendants as well as large Lucite paperweights. A couple of years ago Karen and I sold a ton of these right before Christmas. The neat thing about this product is you can mark them up 200%. If insects freak you out, they also sell a line of flowers and butterflies in Lucite as well.

That’s it for now. Look for the next issue the first week of April.

Skip McGrath
The Online Seller's News

P.S. If you missed the last issue, click here to read it.

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