eBay’s mission is to be the world’s favourite destination for discovering great value and unique selection
How eBay want to mitigate high eBay Promoted Listings bid rates on low performing offers
eBay are addressing the issue of low performing products who stick in a high eBay Promoted Listings bid to dominate the top of search to the detriment of better performing products.
eBay introduced Promoted Listings in beta version in the US in 2014. It was hailed as an innovation, but the reality is that this was eBay’s third attempt at promoted search having had a keyword program which launched on eBay.com in the summer of 2003 and retired in September 2006 due to low adoption rates. Then in 2008 came eBay AdCommerce which shut down in 2010 in the US and in January 2011 for all eBay EU country sites. In both the previous two programs eBay sellers could bid on selected keywords and those that bid the highest may have an advert displayed at the bottom of search results.
eBay Promoted Listings however hit the spot and over the past couple of years has been growing at rates of 100%. When launched there were specific slots which Promoted Listings appeared in and whilst the number and position of slots were tweaked, inevitably poor quality Promoted Listings were showing irrelevant or low-quality results in those fixed slots.
Then eBay changed to a unified set of search results with a blend of organic and promoted listings in the mix. It ranks promoted items by looking at several factors, including but not limited to, relevancy to the search term, item’s (and seller’s) past performance and the eBay Promoted Listings bid that the seller has set for the item. The change also meant that the same listing wouldn’t show up twice in search results meaning an end to having the listing displayed as a promoted listing and as an organic search result.
Now, for some queries promoted listings will be at the top of search. This usually happens when the competition is high (meaning a large number of items which are relevant to the query are participating in promoted listings, and the eBay Promoted Listings bid rates are high). For other queries it’s possible that there are no promoted listings at the top of search. This usually happens when there are not enough relevant items to the query, and participation in Promoted Listings or the ad rates are not high.
eBay say that these changes have increased the relevancy of promoted listings leading to increased sales for sellers who participate. Incidentally it’s also made eBay Promoted Listings an amazingly profitable venture for eBay.
There is on doubt that participating in eBay Promoted Listings makes a massive difference to sales, although with stagnation in growth of the marketplace, particularly in the US, it is fair to question whether they increase overall sales on eBay or if they just move sales from sellers who refuse to pay to play to those who do splurge the cash on Promoted Listings… and in fact this is the challenge eBay want to solve – how to dump promoted listings where the offer is unattractive to buyers but the seller simply throws a ton of money at the program with a high eBay Promoted Listings bid to buy their way to the top.
“As a next step, we are also working to understand the impact on the buyer from Promoted Listings at the top and will optimize the top of search experience based on buyer feedback. On the seller side, while a majority of the sellers have said that Promoted Listings is a great tool to increase visibility and gain traction in the market, we do recognize that some sellers can take advantage of this program by bidding high and dominating the top of search. We will continue to invest in algorithmic improvements that improve the quality and relevance of promoted and non-Promoted Listings at top of Search.”
eBays + VAT+ Promoted fees is just simply too expensive these days. Far to much work & Hassle for the margin on offer.
FBA margins are also low, but at least half the work is done for you.
This is important issue, but eBay needs to address the Returns as well:
We received 2 return requests for GSP sales that we do not accept returns on(sic!). how’s that eBay?!
1) “wrong item sent”. buyer says “this is the item, but I want that […]”. I asked for photo proof of wrong item supplied. No reply. Had to accept the return and provide return label which I haven’t as I’m not sponsoring it.
2) “changed my mind”. before we posted buyer said it’s urgent so send it quick. next day they opened the request stating it’s no longer needed. the item hasn’t even reached the GSP warehouse in the UK….
I’m looking forward to Mangled Payments so I will turn off GSP on our listings (it’s too expensive on MP). And then will have less admin work to do. Just in time for next January “surprise”.
It is more like this as eBay GSP is so expensive, so the product Plus shipping means they end up paying loads.
I removed GSP on nearly all my listings and added my own rates at the same time removing certain countries where returns are costly recently and its been better,
Promoted Listings will always de-optimize search results for buyers. This by definition makes the platform less aatractive for them.
It makes you wonder if it wouldn’t be better to just increase the selling fees by a certain % to cover the promoted listings income and refocus on optimizing search results for buyers.
I doubt sellers would just swallow that and with all the alternatives currently around it exactly points to the messy position ebay has worked themselves into to with this. Short term gains clearly ruled over long term growth for too long, they are now in hole struggling to get out.
Let me guess the Chinese are using this tool to spend some of the 20% tax they already save to boost their listings. But why now ? They have dominated eBay for YEARS ALREADY and done this to promoted listings EVER SINCE IT WAS LAUNCHED.
The simple algorith Ebay are using is as follows.
Unless you promote your advert and give Ebay an extra 12 percent plus VAT your adverts are hidden from a lot of buyers.
Note Ebay are clevor and dont hide your listings if you search from your location.
I have tested this therory using software that changes your IP location and this is exactly what they are doing.
So any products you are selling Ebay are basically going to take near to 30% of total price if you want to sell an item otherwise its hidden for 90 percent of the time and hence very little sales
Agreed, it’s very dodgy if you search from within your account, your own items appear in search results, I found this probably makes the seller happy but want to cut prices as it seems the item isn’t selling.
But if you do it from an anon browser often they won’t.
I have products with 12 – 15 straight 5 star reviews, that are way cheaper than they should be (break-even or loss) to clear to return warehousing that doe not even sell. But other items that cost 2x more have fewer reviews or less favorable reviews are selling daily.
Some other dodgy behaviour: item does not sale for long time, I then click and visit the listing from within my normal browser/account, and randomly a sale comes in shortly afterwards. No, the sale wasn’t because of me buying it. Happened few times in last few weeks.
I think they are limiting sales to keep some legit UK based listings live, so there appears to be choice, other wise if sold out likely the item wouldn’t be restocked and you’d have only Chinese listings, which makes the shopping experience seem poorer for buyers.
It’s a dirty trick basically to p
give eBay UK some credibility and not appear to be overrun by Chinese, even though they are the ones getting the bulk of sales.
30 percent fee. They are really taking the pixx.
To make matters worst if you increase your prices to cover the 12 % and vat cost buyers simply wont buy your item as they think its to expensive.
All in all its a case of clear your stock and stop selling on Ebay for us.
TBH I’m not really that interested in eBay as a selling platform anymore. Basically, if I can put it into FBA and get some sales on eBay fine. But when purchasing or considering stock FBA is my primary focus.
eBay has too many sellers, too few buyers is a lot of work and has lack profitability.
Other sellers might run dead stock at cost value year after year in their profit and loss account end of the year reporting. But in the end, it will get ruined, moldy, etc in warehousing/Storage or need to be sold at a loss someday.
It just depends on how soon the seller realizes.
eBays a good place to sell my Amazon returns, basically, how platform stands today, that’s about all its good for.
If Chinese sellers are ever removed from eBay, they will be in for a shock. A lot of the UK businesses have gone bankrupt or simply left. eBay has not really cared about domestic sellers for the last 7 years.
ebay is great for directing traffic to your own website. That’s about it now sadly, too many hoops for honest domestic sellers to jump through.
eBay could easily add these fees next to the item when it sells, or next to the item in seller manager.
They don’t because they don’t even want sellers to consider eBay fees when an item sells.
If they did they would soon realise they are making dirt margins.
Royal mail click and drop could also do this, again same reason.
Click&drop…. I’m waiting for some bored(?) business/es to lodge a case against RM to high court or something. Charging customers without prices being displayed… You get totals once after manifesting it. What a joke. Fortunately it’s possible to be “mindful” but it takes some time and planning. And this systems’s UI is a horrible experience.
Ebay is an absolute disgrace. They have one big problem, they think that all they need to do is keep buyers happy and they’ll come out on top. Look at all the things they have forced onto sellers in recent years. By “forced onto” I mean that if you don’t do it, you lose sales.
One of the earliest is free shipping. You get a boost if you offer it, so conversely if you don’t your listings are effectively demoted. But it’s untenable now because it’s too expensive. In the past couple of decades postage/shipping costs have rocketed. And many buyers are too dumb to realise how much it costs, and some think it is actually free, not factored in to the item price.
Everything they have done either follows that theme – do this or lose sales – or it’s been made compulsory, or close to it. Every single decision has been worse for the seller.
30 day returns – again a boost in rankings if you do it, so a demotion if you don’t. But there is no consideration for the fact that after 4 weeks items come back battered and can’t be resold, certainly not new or nearly new. So we lose out again. Why do buyers need 30 days? Now they’re pushing 60.
Then they want us to pay for returns, and despite repeated claims that they’re unbiased, it is perfectly obvious that they are heavily biased in favour of the buyer. Buyer says it’s faulty, or damaged, or not as described for any reason, ebay gives them free return postage at our expense; no questions asked. We say the description was perfect, or no fault is found or whatever and they’re not interested.
Buyer escalates a case, ebay automatically find in their favour and we have to try to fight it. Buyer says an item hasn’t arrived, ebay side with the buyer. So for low value items where free postage doesn’t cover the cost of tracked delivery unless you hike the price, the seller has to risk it. This is easily cured – why don’t they have a rule that says the buyer is not covered for loss unless he chooses a tracked option? In any other walk of life unless you pay for insurance cover, you’re not covered. So we’re scammed to death because ebay don’t want to upset the buyer. See the theme developing here?
Nothing has worked so ebay needed to come up with a way to boost their income, and the result is promoted listings. But this favours those who get their goods cheaper – Chinese sellers, and large companies who can buy in bulk and therefore cheaper, and can reclaim the VAT. What ebay have sadly missed over the years is the fact that the core of their seller base, the small business and sole trader, can not afford to compete with promotional things like free postage, free returns, 30 day returns and having to write off goods coming back in poor condition, as well as coping with all the other scams that go on almost with ebay’s blessing – it doesn’t cost them so they’re not interested, don’t see these things as a problem. But we’re forced to give buyers not just one or two incentives, but a whole range of them.
It was already tough to turn a profit in many categories, a race to the bottom (again encouraged by ebay, not least by displaying the same item cheaper on YOUR item page), poor sales because of too much competition it’s impossible to compete with, and now they want us to pay another 10, 15, even 20% and more in some categories to try to sell our items and somehow hope to turn a profit.
We’re now pushing the website and using eBay as a backup, but it does still account for 60% of our income or we would drop it like a stone. But I’m working to change that, because higher and higher fees for fewer sales ever diminishing control over our business is just not acceptable. One day, somebody important enough at ebay might just realise that before it;’s too late for them.