I have previously opined that the best way to get anything done in a world where electronic communication is cheap is to send a letter.  I  believe that the physical nature, and relative rarity of a letter means that it is less likely to get lost in the system.  Writing letters straight to the managing director is usually a very quick way of getting things done.

My theory has come unstuck with eBay, who have amazed me with the ineffiency of their customer service.  Recently, an error in the configuration of my listing software caused me to list around 10,000 shop inventory items for a very short period of time costing me around £1,000.  I was pretty upset, thinking of all the things I could have spent the money on, but then I cheered up.  I know, I thought, I will write a letter to the head of eBay UK, who will surely see that this was an honest mistake and refund me the additional fees. Genius I thought this can’t fail.

So I wrote a nice letter to Mark Lewis, Managing Directory of eBay UK, explaining what had happened and appealing to his better nature.

Dear Mr Lewis,

Yours sincerely,

Trevor Ginn

hellobabydirect

I got not reply, so I sent a follow up letter.  Still no reply.

Not to be put off, I sent a letter to Doug McCallum, Senior Vice President for Europe, who did not see it fit to reply to me either

Finally, in a last ditch attempt I wrote to John Donohoe, CEO of eBay Inc, and, you guessed it, no reply.

Now, I think that it is reasonable for a polite letter  to receive a polite reply, even if the request is rejected.  I think it says a lot about a company if they do not have the decency to reply to customer communication.

Sales reporting is hugely important, but unfortunately can be rather time consuming. On eBay it is a real pain to analyse sales on a per item basis, as sales relating to each SKU are spread across multiple listings.  Sales data therefore requires analysing the sell through rate and average selling price of each product, deducting relevant fees and then comparing this against the trade price.  Your sales management tool may do this for you, but otherwise it is a time consuming manual process

I was therefore very excited to hear from Andy Geldman from Auction software review that a company called Prime2S had created an Excel plugin which pulls data from eBay using the API.  Functions available will for example pull items numbers for listed items, fees associated with items numbers and feedback details.  These functions could be used to entirely automate the creation of eBay reports.  They could very useful in building an automated versions of Scott Wingo’s eBay Dashboard, which he suggests in his book eBay Strategies.

It is a pity the Prime2S haven’t produced their own spreadsheets using their plugin, missing a trick there I think…..

Excel is very much the battle axe of the information age. White shirted warriors slog it out across the battle field of cells and pivot tables.

Anyway I am getting overexcited.  Here is formulas for calculating eBay final value and listing fees

Listing fee

=IF(D3<0.99, 0.1, IF(D3<4.99,0.15,IF(D3<14.99,0.25,IF(D3<29.99,0.5,
IF(D3<99.99,1.30)))))/E3

Where D3 is the eBay starting or fixed price and E3 is the sell through rate. 

Final Value fee

=IF(D3<29.99, D3*0.075, IF(D3<599.99, 2.24+(D3-29.99)
*0.045,2.24+25.65+ (D3-599.99)*0.019))

Where again D3 is the eBay final price, be it auction or fixed price

I (well not me personally), have created an listing template for my new eBay business, Hello Baby.  I thought I would go through my design rationale and invite comments:

Features:

• Two column design.  Although I think the proponents of three column listing and shop designs such as Frooition do an excellent job for a very reasonable price, three column designs are a bit busy for my liking.
• Clear branding.  Too many eBay listings ignore the opportunities which a free text HTML description field gives to build a brand and drive traffic to a website through search.
• Large images.  Images are 600 x 500 pixels, large enough to give buyers a good look at the product.  An image gallery make it easy to toggle between images
• Shop categories.  Hard coded unfortunately, but the idea is to allow browers to navigate between listings.  In the future we hope to have a more sophisticated gallery.
• Shop search.  again, to allow users to find other products for sale
• Contact details.  From a personal point of view, I find contact details reassuring.  It is also an opportunity to display the URL of my (as yet unlaunched) website to customers
• Payment and postage information.  The idea here is to give as much information as possible to customers, encouraging sales and reducing non payers.

According to the new version of terapeak (using their Hot sellers search) the top sellers on eBay UK in the month 19th Feb-19th March were:

I have been trying to get this data for ages! however I am not sure how accurate these figures are as performing a seller report seems to give different figures….  Interesting all the same though

I suspect that the reasons for doing this are two fold. 

1. Drive traffic to the eBay listing and thereby get more sales
2. Save on eBay listings fees by an getting affiliate payment for driving traffic from the eBay site.

I think that giving this kind of website promotion of eBay listings is a mistake.  The eBay listing fee is your payment to eBay for marketing your products , if you feel you have to drive more traffic to the site then you are not getting your money’s worth.  Furthermore, the volume of traffic which will be driven to your products from your website will probably be small compared to the traffic which are driven via the eBay search.

Another reason not to place links to eBay, or any other site, on your homepage is that it drive traffic from you site, which should be the preferred channel as it incurs no fees, to a site where a fairly hefty fee is payable.

Ask yourself the question, do I want people to buy products from my website or from eBay.  If it is your website, don’t place a link to eBay on you homepage.  Building traffic to a site is hard, don’t throw it away.

Today ClockWorx Ltd. (best known under one of its trading names Auctioning4u) has gone into administration. I was the company’s co-founder and CEO over the last five years. There is a lot of discussion of franchised versus company owned – I believe that discussion to be beside the point; the real question is if one can run a commercially viable trading assistant business (we know if works as a hobby from home). I thought it of interest to outline an overview of the company and its history, the reasons of its demise and possible lessons for survivors in the industry.

Our Consumer Segment

The initial idea was to help consumers sell unwanted possessions on eBay. We started the business almost at the same time as Auctiondrop in America and Dropshop in Germany. We became a Trading Assistant business in April 2003 and soon opened our first shop in West London. At the height of our consumer activity we had 13 locations; 11 in Greater London, one in Manchester and one in Brighton. Some of these were 3rd party locations in storage companies, some company owned stores and two were franchised. We also had a fleet of four home collection vans. We exited the business in 2007, the shops in the summer and the vans around October. We sold the brand Auctioning4u at the end of the year to the operators of Serial Sellers who trade on a smaller scale from South London.

Main Issues

Consumer Acceptance
In our experience there are principally two groups of users: those who don’t want to pay for a service they could provide themselves (even if more often then not do not follow through) and those who value their own time and therefore have no problem paying for services. The latter group however is time poor and/or cannot be bothered to bring their unwanted possessions in. The only attractive consumer segments are those that undergo a life changing event such as a move, relocation, death in the family or children leaving the house. Most of these are hard to market to; we found only the relocation market to be attractive – the target market is affluent, time poor prior to the move and everything has to go before leaving the country.

VeRO
The current VeRO programme (eBay’s programme to allow brand owners to stop sales of counterfeits and trademark infringing items) makes it impossible to run a sizeable trading assistant business. The combination of the sheer size of the problem (more than 18,000 firms monitoring eBay for alleged infringements), the lack of any incentives of those firms to show restraint in their take-down actions and eBay’s three strikes out policy are lethal. eBay closed our main eBay shop four times over the years meaning almost unbearable pain and costs for a trading assistant. As an emergency measure we had to stop taking fashion items in the summer last year making the shops unviable. But even non-fashion items will become a problem over time.

I believe that as a matter of policy auction sites such as eBay need to be put on the same footing as ISPs; i.e. brands should be allowed to serve take-down notices but sellers should equally be able to defend themselves by declaring the item to be genuine or not infringing a trademark. If the brand feels strong enough they then ought to take the seller to court but leave the auction site outside. With the current legal framework it is just a question of time until general auction sites will have to close due to legal risks (try selling a Tiffany product these days on eBay and you will understand what I refer to). Unless the VeRO issues are going away I do not think that it is possible to offer services to consumers on a commercial basis.

Our Charity Segment

With Blue Ocean Solutions we had a strong partner in the charity segment and at our peak served more than 200 charity shops. However, the value of donations was never sufficient and training the charities proved too difficult (our charity shops had an average of 18 employees, most with very little IT skills). The fact that being a trading assistant is labour intensive and charities principally do not pay for their labour did not help. We started to close our programme at the end of 2006 and I do not believe that a charity programme can work on commercial terms.

Business Segment

Started in 2005 this segment soon became the most important part of the business. This month alone we sold more than £500,000 of eBay GMV. That being said we believe that the VeRO problems also impact this business. We have had significant problems selling fashion items or other luxury products for a number of our clients including department stores and jewellery companies (we even tried to sell a product for one brand owner only to be stopped by one of the same brand owner’s employee through the VeRO programme) and were so worried that we sold off all non consumer electronic and IT clients to XS Items, a competitor in late 2007. Another problem is the fact that eBay is only a partial solution for companies’ problem stock (returns and overstock); most of the times clients will have stock that either has no market on eBay or cannot be sold due to its low value. The high number of Non Paying Bidders also added to our problems rising to 15% in the last few months (eBay sellers should be able to insist on immediate payment, which would be no different to any other ecommerce site).

This segment made profits for the company; particularly once we had specialised (in consumer electronics and other IT equipment through our brand Clocktronix and in vintage and collectible toys through our brand The Toy Auctioneer).

In the end our overhead costs put in place when we had wanted to built a national network, in particular our 45,000 sq.ft. processing centres and marketing costs to built the Auctioning4u brand and the relative low margins on the business segment made new investments into the company an unappealing choice and leave the board no other choice than to close.

Christian Braun

Yesterday, Clockworx, the company previously trading as Auctioning4u called in the administrators.  It is a sad end to the dream of building a nationwide chain of eBay drop shops.  It also, I feel, sounds the death knell for the idea that a large company can be built from franchaising drop shops.  The stand alone shop model does not work as shown by iSold-it problems and now the centralised model has also failed.

I don’t know how much I should really say about this, considering I used to work at Auctioning4u, but nobody else seems to be blogging about this and so I will try and be fair.  Auctioning4u was based around a centralised franchise model with sateillite shops taking items to a central processing facility for listing and fulfilment.  At its peak the company had around 7 locations around the UK and two warehouses in North Acton, London.

The centralised drop shop model was always going to be difficult to get right.  Margins are slim in processing items, and listing is labour intensive.  The franchise model involved a revenue split 70/30 between auctioning4u and the franchiser.  Neat solution though the centralised model was to the problem of running a chain of drop shops it did not provide a solution which appealed to potential franchisers.  The 70/30 split meant that they had to process large volumes and entrepreneurial franchisees did not like the idea of merely running a shop without doing any of the other tasks. 

Auctioning4u’s death has been a slow one.  Last year they gave up on the franchise model to concentrate on home collections, only to give up completely and sell the auctioning4u brand to Serial Sellers a few months later.  After that they concentrated on business sales and development of their software.  Having not secured further funding the company was forced to close for business yesterday (January 31st 2008).
 

Gosh its been an exciting few days in the world of eBay watching.  The site has made some pretty radical changes to how their fee structure works.  Interesting, all very interesting

The end of the level playing field (in the UK at least)

eBay has done two things to the way their fees are structured

• Reduced their insertion fee and increased their final value fees.  The idea is to make the fees more success driven, aligning the interests of eBay and the sellers.
• Offering a scalled reduction of final value fees based on powerseller status and detailed seller ratings i.e. if you are a volume seller who gives a good service you will get a discount

I think that the second change is particulary interesting.  When I have talked to eBay in the past, they were most adamant that their marketplace was going to be for now and evermore a level playing field where sellers pay the same fees if they are a sole trader or multinational.  In most other lines of business bulk users get a discount, which is what eBay is now offering in the UK. 

I remember Randy Smythe complaining in his after bankrupcy debrief from Ina Steiner that he thought that eBay should offer a bulk discount on fees.  Well move to the UK Randy and your dreams will come true!

I presume that this is as the result of eBay’s poor performance of late and increased competition. 

eBay Express RIP

eBay express UK is to be scrapped.  Whilst I could see what eBay were trying to do with express, I am not sure if anyone ever used it.  I think markets tend to consolodate, a fact that has given eBay near total monopoly of the online marketplaces.   Getting people to use express was asking them to leave the consolodated marketplace, where a) all the action is and b) they are used to going.  Not surprisign that it didn’t work really

End of Seller Negative Feedback

Sellers will no longer be able to leave buyers negative feedback.  I think that this is sensible as  I think that after a buyer has paid, they have done their part in the transaction.