eBay misses own shipping cap deadline, media sellers confounded and befuddled

October 6, 2008

Marketplaces ChannelAdvisor By ChannelAdvisor

Back in August, along with a host of other changes, eBay announced shipping maximums (caps) for the media category.  They also published a checklist that pinned the date to October 5th.  Well here it is October 6th and… nobody knows why, but it hasn’t rolled out.

Some sellers are reporting they’ve heard October 16th, others say it’s been delayed till Q1. What’s disturbing is nobody at eBay seems to know the answer.
Why does this matter?
You may be asking yourself why does this even matter? Why can’t sellers just go ahead and set up the limits now and not worry about the date.  The problem is that ecommerce is a zero sum game and a marketplace has to change all at once for someone not to be the loser.
Let’s look at scenario, for example video game systems (with a $15 shipping cap as per eBay).  Let’s say these are $100 items with shipping included (all in).
Seller A lists these for $80 and $20 shipping
Seller B lists these at $1NR with $20 shipping
Seller C is a model citizen and lists them at $85 with $15 shipping
Seller D is also a model citizen and is an auction traditionalist, starting the systems at $1NR with $15 shipping.
The whole reason eBay is implementing the shipping caps is because eBay buyers don’t look at S+H cost very closely so with that caveat, Seller C is immediately at a disadvantage because their item is $85 vs. $80 on the others.  However, if they do get a sale at least it will be for the $100 target.  If they do sell something, they’ll have the pleasure of paying eBay’s FVF on $5 more so they face a higher effective take rate vs. non-compliant sellers.
While Seller C is in pain, Seller D is truly hosed because to buyers it looks like the market is saying $80 for the items, thus they stop bidding at $80 and the seller is left with a paltry $95 in total sales.  What’s $5 you may ask yourself, well this seller was probably going to fund some S+H cost in the core price so they get a triple wammy.  Electronics margins are very thin and $5 on almost any sale with of $100 item destroys all margin.
Time for eBay to get buttoned up on these changes
The bottom line is eBay has to start realizing these changes impact their customers in serious and profound ways and are not to be taken lightly.  Of course a (maybe) unintended consequence of these kinds of random activities is that they really destabilize auction sellers who find themselves having to switch to fixed-price for some continuity or leave eBay for other pastures.
Can you imagine any other business doing this?  What if your employer told you pay day would be October 25th and then moved it to October 31st?  What if you hustled to do your taxes, and the IRS moved it June this year unannounced?  Those seem ludicrous, but this is how it now feels to sell on eBay.