Tuesday, April 29th, 2008
eCommerce Summit Q&A: Part 2
In a continuing effort to provide all questions and answers that came out of the Summit last week - and the questions asked here on the blog - here is part 2 of the Q&A. This post highlights the ongoing shipping & handling discussion that came out of the “Navigating the Changes at eBay” panel. I’ve also added an answer to an Ink reader’s question (CrunchyPostingGoodness) that I asked while down in New Orleans.
NOTE: If you have already asked a question, please do not re-post it. I assure you I am working on all answers for you. Thanks for your patience…
In the keynote, I heard reference to shipping prices going down and I also notice there is a push toward to free shipping on the site. Retailers can do that but it is priced into the total cost… and I have no problem with that. My question is, we all know you have $5 billion in cash, why not put some of that into subsidies for buyers to help with their shipping costs? [Applause]
Lorrie Norrington: Let me take that one… it will be fun. [Applause]. First of all, I would say that shipping costs are going down – we’ve seen that in the first quarter. As Dinesh referenced earlier, free shipping is becoming increasingly popular on the web and sellers are out there being much more cautious with regard to their shipping costs. They’re being much more accurate when pricing it out. Now, why don’t we just write a big check and subsidize it? Well, eBay isn’t holding the inventory, eBay is having a take rate for everyone of those transactions. If you cover free shipping there would be exactly zero in that transaction. It’s just the way that the economics of our marketplace works. If you’re holding the inventory, you can subsidize free shipping and the economics will work for you. Our approach is to try and find the best possible rates for our sellers and put as much influence on the carriers to guarantee our sellers can get the best possible rates.
Matt Halprin: There is one suggestion I’ve heard that we’ve debated internally on. If we gave a small final value credit for sellers that provide free shipping, since eBay is actually making a little more money on that transaction, that’s something we’ve talked about.
CrunchyPostingGoodness asked: Why isn’t PayPal confirming all buyer shipping addresses for all sellers? Amazon guarantees every shipping address for all of their sellers. I doubt that Amazon can actually verify every address, just like I’m sure PayPal can’t either, however Amazon does assume all responsibility and protects sellers who ship to any address specified by the buyer at checkout. Even if PayPal can not physically confirm every address, it should still provide the seller with the same protection, as if the address was able to be confirmed.
Monroe Labouisse, Director of North American Marketplaces, PayPal, had the following answer:
At PayPal, we agree that we should help protect sellers from fraudulent buyers and we do it today in a variety of ways. One way is that, using new fraud detection technology, we have greatly expanded the number of confirmed addresses for all sellers in our system in the past two years. A second is that we have just introduced expanded seller protection for eBay PowerSellers in the US, UK, Canada and Hong Kong (and in Australia we’ve rolled out seller protection for all sellers), in which, as you suggest, a seller just has to ship to the address provided by a buyer at checkout. It’s free for PowerSellers, no longer has a coverage limit, and addresses aren’t “confirmed” or “unconfirmed” anymore - you just ship to the address provided by the buyer through PayPal. Provide great experiences for buyers, qualify for PowerSeller status, and then along with the many other benefits eBay provides, you can get this protection from PayPal.
Two other things that are worth pointing out, in reply to your comment: 1) contrary to your statement, Amazon does not protect sellers who ship to “any” address provided by a buyer in checkout (I’ll explain more below), and 2) Amazon charges more for transactions at high price points (where fraud is most likely to take place) than eBay and PayPal together charge.
On the first point, it’s more accurate to say that Amazon protects sellers who ship to the address that Amazon “allows” to go through checkout, not that they protect sellers who ship to “any” address a buyer provides. Before allowing a transaction to go through, most payment systems (including PayPal’s and Amazon’s) will check the safety of an address. If an address is considered unsafe, then the transaction may be denied, or the buyer may be required to provide more information to authenticate the transaction. In both cases, a sale may be turned away. And to my second point above, in part to cover the cost of fraud at high price points on transactions it is letting through, Amazon charges you more than eBay and PayPal combined.
At PayPal, we are taking an approach to protections that we think is better for sellers’ businesses. First of all, we do protect sellers on a large majority of transactions. Second, sometimes we let transactions go through that we choose not to protect, but we let merchants know when that is the case and provide them with information they need to decide on their own what’s right for their business. And finally, we charge less at high price points than Amazon - and less than the electronic payments industry in general across all transactions.
Tagged: amazon, buyers, ebay, ecommerce, ecommerce summit, Events, feedback, lorrie+norrington, Marketplace, matt+halprin, paypal, sellers, shipping, shipping costs, shipping+handling, summit, trade shows, transaction
Patricia1On 04.30.2008 at 5:54 pm Said:
@ perma - I’ll try the green highlighter. They will absolutely NOT scan the package in at the counter. One clerk told me “no” its scan upon delivery only, another clerk told me “you have to buy tracking in order to track a package, this is only scanned in upon delivery.”
I’m not saying they’re right…goodness knows I had to practically teach them all about electronic postage a few years ago. None of them even had training on it.
PermacrisisOn 05.01.2008 at 9:19 am Said:
Basically all 3 are right.
I worked USPS for years, was there when the first Symbol 386-based scanners came in, and watched the DC “no acceptance” policy come down later.
USPS are quasi-governmental, quasi-corporate– arguably the worst of both. The craze as of late is revenue, revenue, revenue generation. If it doesn’t increase revenue, don’t do it, hence the refusal to do over-counter scans. What can’t be assessed is the loss of customer goodwill that results– same as ebay.
So it’s OK to stand around on break, lines out the door. But it’s verboten to scan a barcode on the clock. That wastes “labor”– as if labor comes in 5 gallon cans… You roll your eyes so often in that place, you have to unkink your optic nerves.
Delivery confirmation was never intended to provide real-time tracking, and is usually 1 day off. (Ebay corporate probably doesn’t even know this.)
Even in the best-case delivery confirmation scenario, scans don’t upload till that night. The carrier’s handheld scanners are not returned to their charging cradles till 6 pm when they come off the road. Scans do not upload till nighttime, a throwback to the days when it was done over phone lines.
To predicate a sellers reputation, exposure, and indeed livelihood on Delivery Confirmation is to invite disaster. But that’s on them. You owe it to yourself, green hi-liter in hand, to do the best you can with it- at least until you can leave here.
PermacrisisOn 05.01.2008 at 9:20 am Said:
And pat:
Find a new office and find a new clerk. Bring chocolate!
Patricia1On 05.01.2008 at 10:17 am Said:
@ perma - I begged them for a roll of tape. They are so stiff even chocolate wouldn’t help. I get the tape from a friend who has to mail them to me. Her post office just gives them to her because she’s always there LOL Maybe they don’t like little old gray haired ladies
I’ve seen them at their worst. In the huge post office where I used to live there was one elderly clerk who was probably near retirement. Just the meanest person and he would always say they can’t do anything about me. I do as I please and they can’t do a thing to me. I though - wow! if that was me I’d be fired on the spot. Is it really like that or was this character just off his rocker?
AmberOn 05.01.2008 at 10:37 am Said:
Patricia, just a side note, there is the new(er) SCAN form which you can access from either click n ship or Paypal Multi Order shipping.
Per USPS regs, they are REQUIRED to scan that form (which includes the dc for all packages done in that “batch”) at acceptance.
I personally never have enough packages to fiddle with the form, and ironically get pretty detailed tracking with my slow poke media mail, but it is a way around the “won’t scan the packages” dilemma.
Patricia1On 05.01.2008 at 11:17 am Said:
@ Amber - I heard that before…however, most of my paintings are tiny with maybe one or two large ones each week. I’ll keep that in mind though. For the more expensive paintings I still will stand in line and get tracking - its well worth the extra 65 cents.
JJHOn 05.01.2008 at 3:50 pm Said:
Guys, I must have an unusual post office. I love my clerks, they are the greatest people. I drop packages off at 6:30am on the way to work. I just ruing the doorbell and they take them. They do it for anyone. They will also give you a package if you have one waiting. It’s great. Here’s an email I got just a little while ago, it’s a package I dropped off at 6 in the morning, and did not ask for them to scan (I’ve removed the city names):
Delivered 05/01/08 7:57am
Arrival at Unit 05/01/08 6:52am
Processed 04/30/08 6:09pm
Processed 04/29/08 6:52pm
Acceptance 04/29/08 10:11am
Some post offices are good, some stink. It depends on employee attitude. I know my office simple HATES asking everyone if they want to “supersize it” (do you want delivery confirmation of insurance?). We all know the tactic. Most people will say “yes” without thinking and more $$$ go to the PO, yet we still have rate increases…
SandiOn 05.01.2008 at 4:41 pm Said:
@JJH
I lived in Houston for 5 years and got the surprise of my life. The main post office is located next door to Bush International Airport - that post office is one of 3 or 4 in the US open 24/7/365.
I rarely went inside (that was a mess as it was the one and only passport center in Houston), but they had a door and ramp where the trucks loaded and unloaded. You simply rang the bell and they were there, often times helping me upload the car.
My mail person was great about pickups as well, she never once complained when I opted for pickup at the house.
“yet we still have rate increases”
They use gas - I realized just how out of touch ebay was when they were saying free shipping was the “standard” for ecommerce - do they never fill their own gas tanks?
Do they not watch the news talking about truckers threatening strike because of the cost of diesel fuel? How does the ebay braintrust think these packages get from seller to buyer???
Shipping across the board has gone up at the same rate as the price of oil. I just shipped 3 packages UPS that cost 42.00-48.00 each, last year those same size paintings cost me 24.00 - 29.00 to ship.
Patricia1On 05.02.2008 at 5:07 pm Said:
Wish my post office was like that. They aren’t mean people but pretty stiff and stick to the rules (even if they have to make them up) ![]()
KDOn 05.03.2008 at 9:19 am Said:
Matt Halprin: “There is one suggestion I’ve heard that we’ve debated internally on. If we gave a small final value credit for sellers that provide free shipping, since eBay is actually making a little more money on that transaction, that’s something we’ve talked about”.
Ah,ah…I see, now I know you all must have ben hired to run us in circles.
Enough is enough. Mr. Halprin, I buy that just as much as I bought the reason why my bidder ID is masked.
What are you people trying to prove. Whatever it is, it’s being done by design. I think you are stalling for time to go by.
We, as sellers need to wake up fast. They have no intention of constructively helping sellers. It doesn’t make sense to most of you, in time it will become clear. For now, just know that this whole scheme is meant to cover up for some other insidious reason.
Trust yourselves, you know someting is really wrong. There is something really wrong. Put your guard up, eBay is not your friend. Definitely for sure, they do not have your best interets at heart. I’m sorry~ It’s very sad for us~
KDOn 05.03.2008 at 10:35 am Said:
For whatever it’s worth, Mr. Donohoe said Amazon was a failure.
I am wondering, why is Amazon mentioned so much?
About shipping: it’s simple. You find out what shipping cost will be, you add enough for shipping materials, figure in gas to the Post Office and also your time. Nothing less is reasonable under any phony circumstance eBay gives. The buyer has always expected to pay for shipping and there is no need to lower our standards so eBay will make more money. Don’t ever compromise or sell yourself short.
Do not entertain irrational requests. It’s asking way too much from a seller to offer free shipping, give more FVF to eBay because the free shipping drives up the closing price, then to hear Mr. Halprin say, “If we gave a small final value credit for sellers that provide free shipping, since eBay is actually making a little more money on that transaction”, Oh my God,laugh…this is lunacy. Again, what makes eBay think we would ever lose money when eBay wouldn’t?
eBay is going to charge for every little detail, (i.e.: they are now taking part of your FVF if you want your listing outside US and want it to show up Internationally…last I listed, that was free, as it should be…no sense to go into the reasoning as to why it has to be free…would be a waste of my time again).
I can say that’s just one tiny example. Now and in the future a user will be paying every time they turn around for new “innovations” attached to eBay.
Would eBay offer free shipping? Ms. Lorrie said No. She said, “If you’re holding the inventory, you can subsidize free shipping and the economics will work for you. Our approach is to try and find the best possible rates for our sellers and put as much influence on the carriers to guarantee our sellers can get the best possible rates”.
Hello miss, I am not your seller, I am self employed and last I looked, eBay worked for me, I pay them.
I will never lose sight of that position and no one will ever switch around my reality whether I choose to stay with eBay or not.
Second, sellers do hold inventory and quite large ones, in most cases. Do you pay for warehousing/storage costs? No, eBay doesn’t pay for any sellers overhead costs.
Third, in the US eBay/PayPal partners with the USPS and eBay cannot make any deals to lower shipping with a governmental institution. If they tried the FBI would be after them, it’s a federal offense to mess with the USPS. So I have no idea how you can “try and find the best possible rates for our sellers and put as much influence on the carriers to guarantee our sellers can get the best possible rates”. Bologna. eBay management is full of it and they know it. If they don’t, then someone has toyed with their reasoning.
In regard to postal rates, I think you have exaggerated your exact position and what you can exactly do, as an employee of eBay. I don’t care what title you all place on yourselves, you are all employees. You all need to be held accountable for what you are telling sellers here.
Since it’s just a matter of a little bit of time until the covers come off and the world will see just what eBay is doing and what it’s all about now, I suggest again, just tell the sellers what your plan really is and let the sellers know now that they are out of the eBay Big Picture.
Sorry again sellers, this is sad but true.
Patricia1On 05.03.2008 at 11:27 am Said:
Everybody here is venting and spinning their wheels. Its clear to me that this whole blog idea was a platform for them to try to get us to believe all the changes are good. They were going to come in here one at a time and explain how much better off we’ll (they’ll) be once all the changes are made. The fact that we can see right thru ALL the changes they are making is beyond them. So, since all the venting here…they’ve kind of gone away. We’re a waste of their time and they have no logical debate against what we say - we’re just too in-the-know to bother with ![]()
Patricia1On 05.03.2008 at 11:54 am Said:
Just ran across this on the Seller Central board. I’ve removed the buyer’s ID:
“Ebay says think twice before leaving 5 stars! WTF?????
View Listings | Report May-03-08 08:53 PDT
I don’t know if I’m part of another ridiculous test, but I just left feedback for a seller…a boardie as a matter of fact. When I went to leave my 5 stars on each category, I got a little message that said something like:
“Are you sure? Remember, the ratings left by you are anonymous and can’t be seen by the seller.” ”
Now, correct me if I’m wrong….buyer only gets a choice of whole numbers for stars….either 4 or 5 and ebay has already said 4.0 is bad. Ebay is starting to remind me of Germany a long time ago. I was happy to see the BUYER was not pleased! ![]()
LisaOn 05.03.2008 at 6:39 pm Said:
Well, it’s become clear where Ebay is heading and what changes they have in mind. I’m a Powerseller-have been on Ebay for 8 years-and have made a very good supplemental income for my family. We’ve come to depend on the money.
Then in January, Ebay announces upcoming changes that make no sense. Since then, they’ve been stringing sellers along giving out bits and pieces of information. Then suddenly, after reading about Buy.com, the lightbulb in my head comes on and I realize I’ve been given my pink slip. This is my job, my income. Sure, there’s some up-and-coming auction sites out there, but nothing that has the kind of traffic Ebay has. I’m trying to decide if I should list a big lot clearance on Ebay and go into something different, or start again on one of those new sites.
Ebay exec’s don’t give a damn about anyone but themselves. This is a company that has no conscience about throwing people out on the streets. If they do it to the little “sellers”, they’ll do it to the big ones. I believe what comes around goes around, as Pollyannish as that sounds. People will get a clue soon enough. I honestly don’t see Ebay faring so well in the future.
This company was so unique and brilliant. A global flea market. People loved it and flocked to it. These execs don’t get it. I don’t care what colleges they graduated from. They don’t get Ebay and they don’t get the people who love it. But maybe when they’re out on the streets, it’ll dawn on them. I only hope.
KDOn 05.04.2008 at 10:33 pm Said:
It’s clear that eBay’s motives are less than honorable.
But it’s worth pointing out the little message that alerts buyers to ask themselves, “are you sure”.
There it is. I believe eBay dared to use buyers to gradually leave feedback that is the least positive possible, thereby building credibility against eBay current sellers (the ones they want to relieve themselves of). By doing that they build a case against sellers by a recorded of declining feedback, which in reality they fostered. Sellers who are voicing there complaint against irrational, no logic changes will then lose credibility, eventually proving eBay’s point that all the changes were really necessary. They have essentially made buyers and sellers turn ugly on each other, while at the same time achieving a position where they look lily white.
I think eBay should be accused of sever abuse against users.
I really believe that eBay is in fact abusing people after weeks of witnessing (through reading real accounts all over the internet and media) mass complaints (that eBay is hurting them one way or another) by literally thousands of people.
eBay needs to be held accountable, regardless the accusation, if all these people are hurting all at once, at the same time for the same reasons.
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