When Less is More
by Craig Stark
#82, 20 November 2006
Some Observations on eBay Stores
After the Fee Increases
How's it going since the August 22 fee increases, Store owners? I've been looking at some numbers this morning, both my own sales stats and some things mined from eBay, and have noticed some interesting trends.
As most of you know, eBay North America President Bill Cobb announced the fee increases for Stores on July 19. On July 20, when I looked, there were 10,864,365 Store Inventory items listed in the Books category. From this day forward the total began to decrease steadily, picking up the pace some as the August 22 date approached. On August 22, the number stood at 9,351,834 - a loss of 1,512,513.
Recall that items listed as GTC (Good 'Til Cancelled) prior to August 22 were not subject to the new fees until they came up for renewal 30 days after previous renewals or initial listings, so no doubt most Store owners had, to varying degrees, a period of grace after August 22 and perhaps delayed making major decisions about the direction they would take - reduce inventory, close their Stores, whatever.
Everything, however, kicked in after September 22, and the decline in listings continued, more or less steadily, without a major bump. At the time of this writing (November 14), there are 6,708,066 Store Inventory items listed in the Books category - about 62% of the July 20 number. This is a significant drop given that we're in the midst of the holiday season, a time when listings usually spike, also given that July numbers are historically lower than November numbers. Doubtless this is exactly what eBay was looking for, and for the time being anyway, total revenue they're deriving from Stores listing fees has increased perhaps by a factor of 4 or 5. Nice Christmas present.
What about numbers of Stores? Have many sellers pulled out? North America eBay Stores numbered 213,785 on August 22. Any guesses on how far this number has plunged? Would you be surprised to learn that it hasn't plunged at all, that it's in fact gone up? Hah, indeed it has - to 219,594. No doubt some new sellers have come on board since the fee increases, but it's also abundantly clear that many sellers already in place have stayed in place and simply reduced their inventories to mitigate fees. Doubtless this is also good news for eBay because it suggests that sellers have culled low-priced and/or slow-selling inventory, and the overall salability and quality of items offered on the venue has now most certainly been upgraded. It also suggests that there hasn't been a mass exodus of sellers to alternative venues, though many predicted it - and perhaps this is the best news of all for eBay.
Okay, now for some personal numbers. Earlier this year, when eBay was commingling Auction, Fixed-Price and Store items in search results, many of us who had Stores experienced a windfall like we'd never seen - in fact, my March sales from my experimental minimalist Store (in this Store, by the way, my listings consist of short textual descriptions, sometimes pertaining only to condition, and no photographs) for the first time were nearly double what I was making on all other fixed-price venues combined. Sadly, the party was a short one; eBay abruptly returned to the former format when it recognized that auction sales had been adversely affected. By April, things had returned to normal: My EM (experimental minimalist) Stores sales dropped to about half of what I was realizing overall on FPVs.
Normal was still ok for me. Good, in fact. My EM Store sales, with the exception of a lukewarm June, remained remarkably steady through August. Funny thing, though. Just when I was bracing myself for eating the additional fees that were scheduled to kick in, the wind suddenly freshened. Coincident with the Stores fees increase, I saw a significant jump in EM Store sales in September - about a 25% uptick - the same in October, and I must tell you that November has been a major bookselling event. My EM Store sales through the first 15 days of the month exceed my total-month sales for any other month in 2006 with the exception of March, and even March sales, at 15 days out, were about 30% less than what I'm seeing 15 days out in November.
What's up? I've had good Novembers in past years, but since a high percentage of my inventory consists of less common, more collectible titles, my sales aren't nearly as seasonally sensitive as they would be if I offered more common titles or, you know, gift-like, seasonal items. No, for me, something else is going on - and the only difference I can see at this point is that there's been a fee increase, and this increase has had significant consequences on the quantity, quality and salability of books on eBay.
Re consequences, less competition is the first thing that comes to mind. There may be just as many sellers, but so many of them have reduced their inventories, sometimes drastically, that the effect has been to give my inventory more visibility and reduce the likelihood that my books will be competing with other copies. In this case less is more because, you see, the buyers haven't left. The prevailing difference is that there are fewer books to buy.
There's one other factor that may be feeding into this - a search change eBay quietly made in late August: Now, when buyers land on any browse or search page and click the Buy It Now tab, a complete list of matching Store items will appear after matching Auction and Fixed-Price items. Despite the dramatic reduction in Store listings over the past few months, eBay still isn't the auction-anchored venue it once was. As Stores have grown, eBay buyers have become accustomed to purchasing non-auction items, and I suspect that many of them prefer this option, especially as we approach Christmas. Maybe some of them are pounding that tab and running into my books.
Speaking of the Buy It Now option, I can't emphasize enough how this has transformed my approach to selling books on eBay. Time was I would come back from scouting trips and divide the books I'd purchased into eBayables and those more suited to FPVs (including Stores). I'd list the FPVs almost immediately - because it was easy - and slowly, slowly list the eBayables at auction, as time permitted. Some of these latter books would sit for months, some for years. It was stupid on several counts. For one thing, I had a growing, quality inventory that wasn't producing (and, wouldn't you know, in some cases values had dropped by the time I got around to listing them), and for another, I was denying myself the opportunity to sell books the easy way - on fixed-price venues.
Well, about a year ago, I got smart and started to list almost everything that came across my desk
up front on FPVs and, later, in my EM Store, using these venues as parking lots for my eBayables;
and, though I had every intention of eventually listing them at auction, guess what? Lots of times
they sold before I ever had a chance to - and sold at prices higher than I probably could have
realized had I presented them as auctions with multiple photographs and detailed descriptions.
Another case of less being more, this time with a magnificent savings of time.
[EDITOR'S NOTE: There's a school of thought that believes that, at least to some extent, minimal descriptions can be more intriguing than those that show and tell all and, in turn, produce sales because of it.]
And they continue to sell. But there's a point that shouldn't be missed here: The majority of these eBayable books sell out of my EM Store and only occasionally on other FPVs. Reason? eBay is still - still, after all these years - the venue of choice for collectors (including content collectors), and even though my EM Store presents my inventory minimally, the buyers who are looking for it are much more likely to be searching on eBay than other FPVs.
Another important point: Though it certainly produces numerous sales of higher-dollar, non-collectible books for me - textbooks, other modern non-fiction, etc. - eBay is not the venue of choice for them; it's only one choice among several, and when I factor out my eBayable sales, Amazon often matches eBay sale for sale. This may explain why some eBay Stores sellers, those with ISBN-heavy inventories (not to mention lower dollar books), aren't doing well now and won't be able to absorb the recent fees increase.
So, whether you're already on the Store wagon or thinking about climbing on, I'd recommend taking a hard look at this before coughing up hundreds of dollars in fees every month. Now that fee increases are down and dirty, eBay Stores are frankly no longer a good fit for many booksellers. At BookThink, we'll be watching how this all plays out and reporting back. Meanwhile, as always, selling better books is what insulates you against the shifting sands of online bookselling.