eBay Fall Seller Update - 2016
The eBay & Amazon Seller's News ~ October 2016 ~ Volume 17, Issue No. 15
Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
Check out this article on eCommerce gone bad, Alibaba fires employees for hacking their way to free mooncakes.
I was interested to read this article about women committing more eCommerce Fraud than men. The article tracks with my own experience. At one time, Karen and I ran a small antique shop in the Hudson Valley area of New York. Most of the shop lifting was committed by women.
Here's a book right up my alley, Thrift Store Profits: 10 Common Items That Sell For Huge Profit On eBay and Amazon.
Amazon, Amazon, Amazon!
It seems like the last few weeks Amazon is everywhere I look. Here's just some of what I'm talking about:
Change in Amazon's Long-Term Storage Policy
I wanted to make sure this announcement didn't get lost in the other Amazon news as it deals with the cost of inventory storage at Amazon. In the past, one unit of each ASIN in storage has been exempt from the twice-annual Long-Term Storage Fee. That's going to change.
Starting on February 15, 2017, Amazon will charge long-term storage fees on ALL inventory that's been in one of their US fulfilment centers for six months or more.
There was a bright spot in their announcement though. Until October 14, 2016 you can get reimbursed for the return fee or disposal fee for one unit of every ASIN for which you file a removal order. This applies to inventory in U.S. or Canada fulfilment centers only.
In my last newsletter I talked about my list of restricted brands on Amazon. I got a big response and with your help, I've made a lot of additions to the list. So even if you looked at this page a month ago, it's worth taking a second look now. If you find something that's not the page and should be, contact me.
Lets get started with this monthís articles:
Many changes await eBay sellers when the new updates come into effect in between October 1 and June 2017. You can read the full update here, but we're going to look at the main highlights and how they will impact your eBay business.
Features and Fees
The only fee update so far is a change to the Reserve Fee for reserve price auctions. Currently the fee is $3 if your reserve price is under $150, and 2 percent of the reserve price (up to $100 fee) if it is over $150.
This is changing to $3 if your reserve price is under $75, and 4 percent of the reserve price (up to $100 fee) if it is over $75.
Since there is no price-break for starting an auction at a lower price, there is very little reason to use a reserve unless your item is worth hundreds of dollars and you expect a lot of bidding (but need the safety net just in case). Many bidders avoid reserve price auctions entirely, so use with caution.
You will be required to include a product identifier (UPC, MFN, GTIN, ePID) for all new or manufacturer-refurbished items by February 2017. However, eBay is also introducing non-standard identifiers like ASIN, Google product identifiers, or private label (i.e. seller-generated) product identifiers for most categories by the same time frame. eBay will be removing N/A or Does Not Apply as options at that time.
If you use the Catalog-Upload feature, eBay will generate eBay Product Identifiers (ePIDs) for each product. This will enable private-label and non-branded items to get the same brand traction and visibility on eBay, and fulfil the product identifier requirement.
These are the categories that require Product Identifiers.
Returns, Replacements, and Exchanges
In October 2016, you will be able to offer "replacement" (different item) or "exchange" (same item) as a return option for buyers in addition to the current "refund" option. You will be able to set up automation for this in your Return Preferences in My eBay. Interestingly, you can only offer one or the other. You cannot allow the buyer to choose from refund, replacement, or exchange. Your listing may only offer either "refund or exchange," or "refund or replacement." Unless you sell a lot of items with variations (color difference, size, etc.) I recommend exchange. Replacement works if an item doesn't fit, or isn't quite the color they wanted, and you can save the sale by allowing a replacement of the correct size or a different color. But offering replacement items when your catalog has varying items and prices is problematic at least.
Animation in Listings
This impacts scrolling galleries, drop-down menus, and search features from 3rd party listing products which currently utilize plug-in technology. It's possible these companies will adapt, but it is clear eBay is trying to standardize listings as much as possible. This does make sense with the increase of mobile buyers- these animations make it difficult to standardize a mobile version and cause longer load times. We will keep an eye on this as the updates continue throughout the next few months.
Turbo Lister and Selling Manager Out, eBay Seller Hub In
eBay Seller Hub is going to be your only listing option on eBay going forward next year. Selling Manager and Selling Manager Pro have already been mostly integrated into the Seller Hub, and those two products will be discontinued in Spring 2017. eBay says there will be more essential features added into the Seller Hub before they are discontinued though. If you want access to the functionality and tools provided by Selling Manager Pro, your monthly subscription will continue to be $15.99 unless you have an active Premium or Anchor eBay Store.
Turbo Lister will be discontinued in June 2017, also in favor of eBay Seller Hub. Currently, eBay is looking for feedback about features that need to be integrated into eBay Seller Hub from sellers currently using Turbo Lister (email them at DL-eBay-SH-Listings-Feedback@ebay.com). To answer two obvious questions- eBay states there will be an option for sellers to work on their listings offline using Microsoft Excel, and you will be able to save listings longer than the current 90 days allowed by eBay Seller Hub.
Seller Performance Standards
eBay will now give sellers at least three months to get back on track when they fall below eBay Minimum Standards and will provide insight into how they got there and what they need to do to improve. During that time, there will be no performance-based selling limits or selling restrictions imposed on the account.
If, after three months, you are showing consistent improvement but are still overall Below Standard, eBay will extend the grace period for one month. This will continue on a month to month basis provided you are improving until you meet the selling standards. If not, performance-based restrictions and limits will be enforced.
Category and Item Specifics Changes
New category changes will go live mid-October. Details of the categories and changes are available here.
By Denis Geary Lopez
"I can resist everything except temptation." - Oscar Wilde
We so often view the past through present-tinted glasses that we forget that success is more spiral-shaped than linear. A mobile revolution has been underfoot for some time now. With this dramatic change in how people access the internet, the ecommerce auction is staging a comeback.
Traditional Online Auctions Slowed Down as the Internet Picked up Speed
It's natural to assume online auctions are a fading shopping format when considering that auction powerhouse eBay now has less than 15% of their listings as auction-only (down from over 90% in 2003). Back in the days of the desktop, bidding on auctions took consistent effort and close monitoring.
Shoppers had to haul themselves over to their computer to check how their latest bid on that pre-loved Michael Kors purse was holding up. Winning an item was more work than play.
Auctions Were Meant for Mobile
Mobile has changed all of this. No longer is it an effort to "get online" - the internet comes with us everywhere. Browsing one's smartphone is an impulse whenever there are a few seconds to spare. Having free time is browsing one's smartphone, and this occurs on what seems to be an almost subconscious level.
Ecommerce is riding the wave of this mass migration to mobile. Mobile makes up 35% of ecommerce revenue, and in just four years it's expected to reach 49%, or $252 billion. To understand how how ecommerce auctions fit into this new buyer behavior on mobile, we need to visit some elements of buyer psychology.
Instant Gratification Meets ADD
In theory, mobile migration should be the coup de grace for online auctions. Researchers in Canada demonstrated that the average human attention span has fallen from twelve to eight seconds in the past 15 years. This means it's harder to keep people's attention. We want content, products, and entertainment - just faster than before.
In the desktop age, search was king. Now, shoppers are spending several minutes at a time in discovery mode on popular apps like Instagram, Snapchat, Pinterest, and Facebook. A 2015 study by Deloitte found that the average American checks their phone 46 times a day, up from 33 times in 2014. That's a total of 8 billion collective checks each day. These mobile micro moments are where the online auction finds its new home.
Hello Hyper Fast Mobile Auctions
The new generation of auctions are like traditional online auctions, only they are much shorter. Hyper Fast Mobile Auctions are made for the modern day shopper. These auctions start and end in approximately 90 seconds. Marketplaces like Tophatter (where I work) have a user experience inspired by the newsfeed format of Facebook and Instagram. At all times of the day, there is new content in the form of dozens of 90 second auctions to scroll through and bid on, most starting at $1. The key to the success of Hyper Fast Mobile Auctions is that they pull shoppers in and keep them engaged from beginning to end of the auction event. For the shopper, there's no waiting around wondering if they'll be outbid. They see other bids instantly and can then bid again. This competition, combined with instant feedback, creates a more fun and desirable shopping experience.
As Paul Roberts writes in his book, The Impulse Society, "our entire consumer culture has elevated immediate gratification to life's primary goal."
For sellers, there are many benefits to Hyper Fast Mobile Auctions. A faster selling format means it takes less time to turn over inventory, generating cash flow more quickly. This format means that items starting at $1 often get bid up to over $100, generating dozens of bids. The key to getting higher prices, on items like fashion brands, is the increasing bid structure. At lower prices, each bid drives the price up by $1. As the price gets higher, each bid increases the price by $5 increments, then $10, and so on. In just over a minute, popular items starting at $1 bids can be bid up to over $100.
Hyper Fast Mobile Auctions in Action
Let's look at an actual item recently sold on Tophatter, where auction durations average 90 seconds. Bidding started on this Michael Kors handbag at $1 at 6.05pm. The auction ended at 6.07pm, after 74 bids. The item sold for $120 + $19 shipping.
That same bag is likely to take several days or weeks to sell on traditional 'buy it now' sites or slower auctions sites. In the Hyper Fast Mobile Auction, it sold in under 2 minutes.
As an Amazon or eBay seller you're probably thinking, "Great, but what's in it for me?". In the fast growing commerce world, the most successful sellers are selling on more than one marketplace to access broader types of buyers with varied buying preferences. Some people simply want to buy it now on Amazon. Others love to shop in a more fun and engaging way. Hyper Fast Mobile Auction marketplaces are one channel to explore for sellers who want to keep winning in the rapidly expanding world of ecommerce.
As any business owner, this is an opportunity to follow Wayne Gretzky's adage and, "Skate to where the puck is going."
By embracing this faster auction model, ecommerce sellers can leverage changes in buyer psychology and grow their business. You may find that Hyper Fast Mobile Auctions are the modern-day seller's land of milk and honey, where buyers are hungry and profits are sweet.
About the Author
Denis Geary Lopez is an Account Manager at Tophatter, an ecommerce platform that specializes in fun, 90 second auctions. 1,000s of ecommerce sellers, including small and large businesses, sell 10,000's of new and pre-loved fashion, home, beauty and other items on Tophatter every day. Denis enjoys the fast pace of working in the startup scene and is also an avid reader who loves art, hip-hop, and history.
By José Calero of LapWorks, Inc
Amazon has found another niche that allows them to print more money - it called their "Small and Light Program" (SLP). Typical items that fall under this program are USB cables, jewelry, smartphone screen protectors, cases & accessories, cosmetics and other small, flat items. These item must meet the following physical requirements:
(1) weigh less than or equal to 8 ounces
(2) have dimensions less than or equal to 9 x 6 x 2 inches
(3) are priced under $10
The SLP was originally developed for U.S. merchants as a lower-cost fulfillment solution due to the $10 selling price of these items. This program was made available to Prime members as well as non-Prime customers and comes with free shipping. At some point Amazon realized that Chinese merchants represented a significantly larger market opportunity for their SLP than did the U.S. based merchants. The only problem was that these orders shipping from China were taking 10 days or more to deliver when shipped via the ePacket program and the $5.00 shipping cost was excessive for a $10.00 sale item.
Enter Amazon with their solution: that is to lease 40 jet aircraft dedicated to bringing in orders from Chinese merchants under the Small and Light Program and to deliver them to their U.S. customers in 5 days or less. Amazon pitches its quick delivery and proximity to U.S. shoppers to encourage Chinese Manufacturers and suppliers to ship the items directly to the company's warehouses. These jets will also save Amazon millions in freight charges as they carry their own dedicated domestic and international shipping.
In June, Amazon slashed shipping fees it charges merchants who sell items through the company's FBA Small and Light program. And early this month, Amazon notified merchants [read Chinese] that such items would now be delivered to Amazon Prime members within five business days.
By reducing the price of shipping for such items and speeding their delivery, Amazon is looking to win over both Chinese merchants and U.S. customers who want their orders quickly. Amazon shoppers in the US order tens of millions of units annually that fit the Small and Light requirements. The Amazon executive who developed the Small and Light program believes the program will "explode in volume" under these new improvements.
This all sounds very good and well for Amazon and the Chinese merchants they are supporting with the leasing of these 40 jet aircraft. But what is this going to do to U.S. based merchants selling the same items through Amazon's FBA Small and Light Program? If you said it will severely hurt them, (read us), and all U.S. merchants selling the same items, then you're right. It's just another blow to U.S. merchant creating a very uneven playing field.
Chinese merchants are also likely to reduce their $10 sale price since they will be receiving free shipping from Amazon for their small and light product orders. This means they will shift from competing against us (read U.S. merchants) to competing against other Chinese merchants.
So what can a beaten-down Amazon U.S. merchant do in an effort to deflect as much of this loss that is sure to come from this dramatic move by Amazon? Here are our best suggestions:
(1) Wait and see what the onslaught of these new Small and Light products from China will do to your sales before making any hasty decisions.
(2) If they do kill your sales, then lower prices and blow off these product losers to recover the money to buy something else.
(3) If it allows, bundle-in another item with the original product to increase its value proposition and raise the sale price.
(4) Besides bundling, consider creating multi-packs of similar products to sell at a higher price point. Remember customers are also influenced by "deals" and "convenience".
(5) Typically, Chinese merchants do not sell everything. If you wait a while - you can find the hidden product opportunities. Skip McGrath did this successfully with the fashion jewelry category and found some real winners.
A word of encouragement: "Illigitimi non carborundum" meaning "Don't let the bastards grind you down" is a mock-Latin aphorism but most appropriate here. Excuse my language but it's the best advice anyone can give you in these situations. We've all been surprised by Amazon's actions over the years that have caused us to adjust, alter, reconsider, modify and/or amend our current course. So whatever Amazon throws our way, don't just give up and crawl away. Be creative! Fight back and find another way. There are always other ways, other things you can do to win the Buy Box so never give up! Accept Amazon's actions as an opportunity to find new and creative pathways to make more sales and continue to compete. Remember, Illigitimi non carborundum. Good luck and never, never give up.
To read the full story, click here.
About the Author
José Calero is president and founder of LapWorks, Inc. - a technology accessories company designing and providing holders, stands and mounts for iPads, tablets and notebook computers. José designed the first portable laptop desk in 2000 that has sold over 1.7 million units to date. He is also a Viet Nam veteran honorably discharged and was awarded The Purple Heart.
Profit. Arguably the most important word in any commercial business. Great customer service and quality products are very important but that is to provide a more profitable business overall. Sound business advice is to invest in your most profitable products. But how do you know which products are most profitable?
First, you need to know what your Operating Profit is. That is how much you have left after all of the expenses are paid (before you pay federal/state taxes).
Letís take an example:
Your item costs you $20 and you sell it for $50. You ship it to Amazon FBA for 30 cents (because you ship in bulk).
Your Gross Profit is $29.70. This is NOT how much you made on the sale though. For that we need to calculate Operating Profit.
If you know your overhead (rent, employee, internet, insurance, etc.) then use that calculation. If youíre not sure, estimate 8%. If you know your return rate for that item, use that percentage. If not, estimate 2%.
$12.50 is a respectable amount to make on a $50 retail item. More importantly, it's realistic. A lot of times you will see examples where returns and overhead are not included. That gives you a skewed impression of your profit. Sure, overhead doesn't change, but your return rate does. You will often find different products have different return rates and that is an important factor in calculating the profitability of a product. A high returns rate affects your Best Seller Rank (BSR) which is what gains you more organic sales (or loses them), so make sure to pay attention to your returns rate when deciding what products to invest in more.
Once you know your operational profit, you can compare that with other products. Maybe one product has higher amazon fees because of the category. Or another has a higher returns rate. Or one is extremely profitable, but you only sell two products a month. This is the data you need to determine what products to invest in further. It can help you see trends as well. What categories are most profitable for you? Maybe that could help you determine a niche to expand into, and carry similar products, while avoiding those that are less profitable.
You don't need fancy software to keep track of these items. I have created a simple Excel spreadsheet you can download that will make all the calculations for you.
Calculating profit isn't rocket science, but it is a very important part of your business success.
As we enter the 4th quarter and holiday shopping begins, it is incredibly important to ensure you know fixed deadlines for inventory to FBA, holiday shipping, etc. Here's an easy reference guide. I highly encourage you to enter these dates into your calendar.
Note: Hanukkah falls on December 26-January 1 this year so, if your inventory is related to this festival, be aware that it is later than last year and will hit the same shipping deadlines as Christmas for 2016.
November 7, 2016 - FBA Inventory Deadline for Black Friday (Nov 25) and Cyber Monday (Nov 28)
Black Friday 2016 is November 25 and Cyber Monday is November 28. Of course you know you need to be fully stocked and prepared to answer customer questions on those days, but don't get complacent and delay your inbound FBA shipments. If your inventory is not at the FBA warehouse by November 7, it will not be available for arguably the biggest sales days of the pre-Christmas season. Watch out for long-term storage fees, but it is far better to have the inventory there and ready than risk missing the deadline.
December 2, 2016 - FBA Inventory Deadline for Christmas Delivery
You may want a break after Cyber Monday, but by that Friday you need to have replenished all stock for Christmas delivery. This is really important because you can't delay and take a few days off. You literally have four days to have your next shipments received by Amazon. So, if you're shipping items to FBA yourself, I recommend you have them prepared the week before Black Friday so you can ship them out immediately (or ship them a week early and avoid the rush of other sellers sending in items for Christmas delivery).
December 14, 2016 - Last Day of Non-Prime Free Shipping for Christmas Delivery
Non-Prime buyers will be very active today since it's the last day they can take advantage of free shipping. Watch your prices and competition so you don't miss out.
December 19, 2016 - Last Day of Non-Prime Standard Shipping for Christmas Delivery
This is the last day of shopping for most Non-Prime buyers. As with Dec 14, watch your pricing and competition. Sales start really exploding from here.
December 21, 2016 - Last Day of 2-Day Prime Shipping for Christmas Delivery
This is where it really heats up. This will probably be your biggest sales day of the season. Everyone who waited until the last minute is getting their orders in now. As before, watch your pricing and competition. Now is not the time to hold onto lots of inventory on the hope of an extra 1% in sale price. Today is all about volume sales. What you don't sell for Christmas delivery may end up incurring long-term storage fees, so weigh up the sale price versus fees when adjusting your prices. You should know your operating profit for all of your items (see the article on Data Driven Profit if you're unsure how to calculate this) so you'll know exactly how much "wiggle room" you have in your prices to keep them profitable.
December 22, 2016 - Last Day for 1-day Prime Shipping for Christmas Delivery
Expect fewer sales than the 21st, but still watch your prices and competition. You are approaching the last chance to move that holiday inventory you sent into FBA.
December 23, 2016 - Last Day for Next-Day Shipping for Christmas Delivery
This is your last chance to move inventory for Christmas for Prime and Non-Prime buyers. Price competitively and hope for the best. The shipping cost is high, so expect only your more expensive items to sell today.
December 25, 2016 - Christmas Day
You will see a few sales trickle in today, but nothing like you saw in the previous week.
December 26, 2016 - Boxing Day Sales (UK and Canada) and Hanukkah Begins
If you're selling in the UK or Canada, Boxing Day is another big sales day like Black Friday/Cyber Monday. Price competitively and move that inventory ready for next season. Again, make sure you're aware of your Operating Profit for items that won't be desirable year-round, or you have a lot of inventory and risk long-term storage fees.
If you're in the US, this is the first day you'll start seeing returns coming in and that will continue throughout January.
Congratulations! You survived the 2016 Holiday Shopping Season on Amazon!
OMH Inc. - OMH stands for Old Modern Handicrafts. They sell ship models, nautical items as well as wooden canoes and kayaks. They offer drop shipping, but I have no experience with their program. As always, I advise my readers to be careful and evaluate any dropshipper that I list.
Direct Liquidation - This company offers a wide range of products such as electronics, office supplies and kitchen items. They offer smaller merchandise loads to allow you to test products.
The Magic Scarf Company sells more than just their flagship product, the magic scarf. Their inventory also includes ponchos, shawls, shrugs, kimonos and more. Be sure to check out their large line of infinity scarves.
Genmert specializes in mom-themed merchandise for the kitchen, such as serveware, dinnerware and food prep utensils. They've also got a line of pet products. Register for an account to see catalogs featuring their special collections.
CDN specializes in kitchen measurement tools. With the holiday season coming up, it's a good time to check out items like meat, oven and candy thermometers.
Merritt offers a large variety of tableware products. To view their current catalog, as well was their top 25 selling items, fill out their new customer registration form.
Crossroads Candles is a family-owned and operated manufacturer of scented candles and other home décor products. They also have a private label program!
Look to KC Creations for crossing signs. They have over 200 different designs. Honest! The designs include over 100 dog breeds. There are more crossings signs for farm animals, wildlife, people and sports.
Planet Security has been providing wholesale audio and video surveillance solutions for more than 10 years.
SailorBags makes items out of genuine sailcloth. Products include tote bags and travel duffels, wine caddies, purses and wristlets, and home décor items.
Final Score Products offers a unique blend of Sports and Entertainment memorabilia.
Fathom It Distributing Distributing "As Seen On T.V Products":"XHose", Water Jet Power Washer, Earth Brite All Natural Cleaning Products, Shark Pack Waterproof Cases, Chillz Cooling Towel, and the Go Booster ( Inflatable Booster Seat).
Great Lakes Wholesale & Marketing L.L.C. markets and and distributes over 2,000 continuity and closeouts items including grocery, healthcare, dry goods and beauty care products.
Acne Mop is an all-natural product infused with Tea tree oil, white tea, clove, Aloe Vera patented to create an anti-bacterial layer between your skin and sports equipment to keep your skin cool and clean.
UST manufactures survival equipment. Their products include LED lights and patented all-weather fire starters.
Thatís it for now. See you again next time.
P.S. If you missed the last issue, click here to read it.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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