Special Supplement to The BookThinker, #73 Update

How to Beat The eBay Stores Fee Increase by Craig Stark #73, 24 July 2006

Based on the email I've received and notes that have been posted in BookThink's forum and elsewhere over the last few days, it's clear that there aren't many booksellers who are happy about the recent eBay stores fees increase. What took many of us by surprise wasn't that there was an increase - we're accustomed to this - but that it was so punitive. Store items listed at $25 and over, for example, could previously be listed at $.02 a month. That fee will now skyrocket to $.10 - a 5-fold increase. Believe it or not, however, there are some of us who are ok this, and I'm one of them - at least tentatively.

The capitalist system is unerring in rewarding those who continuously strive to grow their businesses, also unerring in punishing those who don't. Further, if you're successfully growing your bookselling business and you depend on other businesses for assistance in buying, selling, facilitating payment, shipping your products, etc. - and who doesn't? - then it's just as important for those businesses to grow along with you or their poor performance will, sooner or later, impact you negatively.

eBay raised Stores fees to promote growth - period. No other reason. And there shouldn't be another reason. It's nothing personal against booksellers or any other group of sellers. Though the health of your business necessarily matters to them if for no other reason than it keeps you on board, eBay is not in the business of keeping you in business. You are. Whether or not the most recent fee increase will promote more growth is another question, but I suspect that it will have a positive impact. If it doesn't, you can bet the farm that the fee increases will be rolled back and something else will be tried. Because it's a pioneer in the online auction industry, eBay has a long history of experimentation to promote growth - after all, there are no other models to compare themselves to - and also a long history of cutting their losses on initiatives that flop. And if one initiative doesn't get it done, they'll keep trying until they get it right. In short, they're not shy about laying eggs. Case in point: I've lost track of the number of changes they've made to Stores over the past few years. Some of them have been proven to be large goose eggs. And yes, they're still trying to get it right. (By the way, I recommend that all booksellers lay eggs too; failure is the most dependable road to success.)

A few money matters. eBay is and has always been my biggest source of bookselling revenue. If it were to suddenly start going south, become less of a force in the marketplace, I know as I know nothing else that my sales would suffer. Things that don't grow die, and potential customers would begin leaving if this happened. I would too. Everybody wants to be where the action is, and say what you will about other venues (and, unlike many other types of vendors, booksellers do have some attractive competitors to choose from); eBay is still the powerhouse of online venues.

Also consider this: When eBay raises our cost of doing business, it forces us to make more money to pay for it, whether it's by increasing our revenue or decreasing our costs through, for example, increasing efficiency. These very conditions of forcing and being forced are what promote a healthy economy, and this is why some of us believe so strongly in the system. Healthy competition makes all of us who meet it in a positive frame of mind better for having done so because there's an urgent need to become more than we are to survive. And we usually do. Another positive point: Chatter in bookselling forums indicates that some sellers are already closing stores in response. More will no doubt follow, and this can only help those who remain.

Whether or not any of you agree with this, we booksellers still need to put our heads together and come up with an effective strategy or group of strategies for making up the difference and, preferably, more than making it up so as to insulate ourselves against the next increase. On a more personal note, I feel at least partly responsible for encouraging some of you to open eBay stores in the first place (during that heady but disappointingly brief interlude when store items were commingled with auction items in searches). Most of you who got there in time realized a nice windfall, and at least we have that to be grateful for.

Okay, off the top of my head, here are some possible strategies that have occurred to me. Some of them may work for you, some of them not, and who knows what combination of them will produce the best result?

1. LOWER YOUR PRICES. Let's face it, eBay Stores have been deeply under-priced ever since store items began to show up in searches. Now that fees are more or less commensurate with competing venues (perhaps significantly higher if you have a low sales velocity) your lower value books should no longer inhabit your store unless you know you can move them quickly. There are serious time issues here because low-priced, underperforming books will take a big hit if you don't get them out the door in a month or so. One of the best methods of I know of for doing this is to adjust your prices downward. Keep in mind that I'm talking only about books on the low end.

2. RAISE YOUR PRICES. One common strategy businesses use to offset increased costs is to pass them on to their customers. Raising your prices certainly will extend the time you can afford to keep your books in your store, but will this work for all books? Obviously not. But eBay remains the venue where collectors congregate most densely, and my guess is that all prices on uncommon, sought-after (collectible) books in your inventories can be safely raised. Raising a price on a $50 book to $51, for example, will buy you 10 months of free listing, and will $1 decrease the chances of this book selling in 10 months? Very unlikely.