eBay Cold Calls Sellers With Nudge To Reduce Shipping Costs For Buyers
eBay is cold calling sellers in effort to convince them to lower their shipping costs offered to buyers.
A seller in the eBay community reports receiving a call from eBay "encouraging" them to change their shipping settings to pass on discounted shipping rates to buyers.
It's been a very long time since ebay has called me and I've never had one quite like this before. Usually they call to announce something new, but this one asked me if I knew my shipping preferences were set to not pass on postage savings to my buyers. They first asked if I was aware of this setting, and then, was I willing change my setting. They quoted some statistics about how this would help my sales.
I declined and gave my reasons. They asked again if I would consider doing so, and after saying no again, they said they would pass on my information. I hope some change isn't in the works. Anyone else get this call?
For those who are unfamiliar, eBay has negotiated discounted rates with the carriers for shipping labels sellers purchase through the platform. Sellers have the option to use those discounted rates for shipping charged to the buyer or to have the shipping on the listing displayed at regular rates without the discount.
Unsurprisingly, many sellers opt not to pass the discount along to buyers, as the difference between the regular rate the buyer pays and the discounted rate the seller pays when purchasing the label can help make up for the fact that eBay takes their Final Value Fee percentage out of the full purchase price, including shipping and tax.
If sellers do pass the discounted shipping rate along, they are likely adding to the item price to make up the difference, just like sellers who offer free or flat rate shipping, or else they risk the fees on shipping eating into their profit margin.
Other sellers cited these fees and/or other costs such as packaging materials or offering "free" returns as reasons why they do not pass the shipping discount along to buyers.
I do not pass on the savings either in order to pay for "Free" returns which of course are not free.
As far as I know this is a global setting for all listings, I would be interested in being able to change it listing by listing
Just WOW!!?? I know they won't be calling me, but I would be inclined to say..."As soon as eBay quits charging fees on shipping, I would consider it."
So the one incentive to ship via ebay was the discount to sellers and now they want you to give it to the buyers? The I guess I will have to start charging handling fees which I do not since I get the discount.
I would think a buyer would be more annoyed to be charged handling fees than to be happy with a shipping discount they don't even know we get! If ebay insists, I will begin using USPS website to print my postage.
If I'd had the time and was in the right mood, I would have some fun with this call.
"So, you want me to lower my prices so the customer has a better experience? That's a great idea. You would be willing to do the same, I'm sure. How about we do this ... together, partner? I will give the overage back to the customer, and you lower your fees to me by 1%. I can then lower my prices and then the buyer will have a very happy experience. Deal? Wanna go in on it with me?"
Some also expressed concern that this call may be a warning of impending change and that eBay may be considering forcing the issue in order to "provide a better buyer experience."
I have heard that eBay wanted to change this and give all buyers this discount that sellers use to cover some costs of shipping and fees.
I had hoped they would leave well enough alone.
Seems that eBay wants to take this away from sellers to give to buyers.
I sincerely hope they rethink this plan.
I do find it odd that eBay would suggest such a thing, because in general the MORE the buyer is charged for shipping, the MORE eBay makes.
Maybe eBay is in a bind with regard to buyer retention of late as a result of certain policies and forced enrollment.
As you all probably know eBay does little tests on a regular basis and from what I understand earlier this year they were testing select Selling accounts where Sellers would give the Buyer the eBay discounted shipping rate.
We are hoping it does not gain any traction and as @ittybitnot mentioned, it would be one thing if they waived FVFs on shipping AND sales tax on shipping so that shipping was a break even proposition when using the Calculated shipping setting.
I sincerely hope they call me ...
The phone call approach to gathering Seller opinions is probably just part of the test. What eBay needs to do is push back on the carriers for better discounts due to the package volume their venue does annually ... but then that's just my opinion
eBay has been on a long downward slide when it comes to buyer retention, with Q3 2023 marking the 6th consecutive quarter that Active Buyers were lower than in Q1 2018, and consumers seeing higher overall prices on eBay versus competing marketplaces could certainly be one factor in that decline.
Liz Morton
However, if eBay thinks nudging (or outright forcing) sellers to pass discounted shipping rates along to buyers is going to have a significant positive impact on price competitiveness across the platform, they may be in for major disappointment.
First, as these sellers mentioned, the carriers continue to increase their rates multiple times a year (giving eBay a defacto fee increase every time they do) and the costs paid to both the carrier and to eBay have to come from somewhere.
Sellers are pressured at every turn to lower their prices through discounts, coupons and offers and margins are already tight for many.
Passing on discounted shipping rates at best may just move pennies around between item price and shipping costs as sellers will still need to bake in enough to cover those costs.
More importantly, targeting shipping costs in an effort to become more price competitive ignores the giant Promoted Listings elephant in the room.
First party Promoted Listings ads continue to be a major source of revenue growth for eBay, with over 2.3 million sellers adopting a single ad product in Q3 2023.
Q3 also marked another strong quarter for our advertising business. Total advertising revenue grew 24% to $366 million. First-party ads grew 36% to $345 million or 36 points faster than FX-neutral GMV growth.
Over 2.3 million sellers adopted a single ad product during Q3, and we currently have over 850 million live promoted listings. Promoted Listing Standard, our cost per acquisition ad unit, was once again the largest contributor to growth in Q3, driven by continued optimization of placements, ad rate improvements, and the recurring benefit of the halo attribution change we discussed last quarter.
With more placements for Promoted Advanced Cost Per Click and Promoted Display ads, expanded Offsite Cost Per Click ads for Google placement, and "halo" attribution that allows eBay to charge Promoted Listings Standard ad fees for even more transactions, sellers increasingly face a "pay to play" scenario just to keep their businesses running on the platform.
Promoted Listings Standard ad fees are also charged on the total amount of sale, including tax and shipping, and as ad rates continue to rise at an unsustainable pace, once again sellers must bake that cost in somewhere, with consumers paying the price.
Liz Morton
If eBay is serious about wanting to win over buyers with better prices than the competition, they're going to have to reckon with their own role in driving prices up across the platform and come up with real strategies to increase sales rather than simply milking existing sellers for more revenue via ads and other fees.
Should eBay force sellers to pass discounted shipping rates along to buyers? How will it impact your business if they do? Let us know in the comments below!
