Can eBay Entice Online Shoppers with Bucks News & Bonus Offers?

Posted on June 1, 2010. Filed under: eBay | Tags: , , , , , , |

The eBay Bucks Beta program has expanded recently with the addition of “Bucks News” and “Bucks Bonus Offers”.  Along with earning Bucks from all eBay purchases, participants in the eBay Bucks Beta program can now earn extra bucks by taking advantage of offers from non-eBay merchants. 

Currently, eBay Bucks participants earn 2% in Bucks Rewards for qualifying eBay purchases and this was how the eBay Bucks program was first introduced to participants.  Note that most items qualify but there are few exceptions such as no Bucks awarded for eBay Motors or things like Tractors, Heavy Equipment, Hospital Imaging Equipment, and similiar type items. 

Also, until June 29th eBay Bucks participants are offered discounts of 6-10% off purchases.  These discounts are separate savings from the earning of eBay Bucks.

Bucks News

When eBay Bucks participants purchase items from certain off-eBay merchants, they are rewarded with extra bucks.  For example, a one-year subscription to People Magazine earns a participant $30 in extra eBay Bucks.

The eBay Extra Bucks program works in association with TrialPay (click HERE for more information about Trial Pay).

Bucks Bonus Offers

The eBay Bucks Bonus Offers are a much more controversial part of the eBay Bucks Beta program.  In the eBay Bucks dashboard, the bonus offers are presented as follows:

Notice that the Bonus Offers give buyers discounts to buyers who purchase from selected eBay sellers.

The eBay selling fee structure already provides fee discounts to larger eBay merchants so that smaller sellers bear a higher direct cost to sell on the eBay platform.  And now the eBay Bucks Bonus Offers highlight certain eBay sellers and provide an incentive for eBay buyers to purchase from these selected eBay sellers.  Smaller sellers on eBay are continually required to pay higher selling fees for less exposure from the ever dwindling traffic on eBay.  The financial squeeze to small sellers’ bottom lines is cutting out many small eBay seller’s abilities to survive on the platform but what really makes the eBay marketplace even more unsuitable for small sellers is that they also bear a disproportionate cost of compliance.

The cost of compliance on eBay is very  high as sellers are required to spend many hours just keeping up with all the changes and then revising listings multiple times in a year to make sure they are not violating the rules.  Ebay changes policies and rules so frequently that even eBay’s customer service departments are not informed and knowledgeable of the policies.  And the self-reporting eBay system that Trust and Safety employs is useless.  Large sellers are allowed to violate the rules; my blog as well as other news sources have many examples of large sellers’ blatant disregard for the eBay rules that all small sellers are required to follow.

Even the “selected sellers” that eBay is highlighting in their Bucks Bonus Offers are allowed to violate many eBay policies.

One selected seller not only states that he is a Top Rated Seller, which is against the rules, but he also makes sure to mention his off-site URL address which is a violation that would get any small seller suspended from eBay immediately:

Another selected eBay Bucks seller makes sure to include in his listing that he is an eBay Powerseller which is against the rules to do:

and makes sure to include URLs in his listing that point potential customers to a website where it is possible to make off-eBay purchases:

And yet a third seller includes a “Terms of Use” page in their eBay store which includes their direct URL:

as well as a statement claiming that they are not responsible for the delivery of the item (note that this is a violation of eBay policy as sellers are not allowed to say that they are not responsible for the package once it is turned over to the carrier):

A fourth example of a “sellected seller” is a seller who also proudly, and against the rules, displays a Powerseller Logo in their auctions:

and specifically mentions that they do not accept personal or cashiers checks which is against the rules to state and is one of the violations that got many small sellers temporarily suspended:

Out of the 22 selected sellers that eBay is highlighting for the Bucks Bonus Offers, I have mentionned only 4 and only one or two violations of each but I could have included many more examples.  However, this is sufficient to prove my point and that is that large sellers are not required to bear the cost of compliance on eBay in the way that small sellers are required to do so.  This further provides an advantage to large sellers on eBay and a disadvantage to small sellers on eBay.

eBay may be able to present a reasonable justification for their charging small sellers higher selling fees but I can’t imagine any logical argument that eBay has for allowing large sellers to blatantly disregard eBay rules while holding small sellers accountable for compliance.  With all of eBay’s recent rhetoric about wanting to create a “safer” marketplace where there is more “trust”, it is ironic that eBay is pushing buyers toward large sellers who are clearly allowed to violate the rules.

And if eBay’s argument is that all sellers, including large sellers, are required to follow the rules equally then how can eBay explain why so many of the selected sellers are violating rules?  One would think that these selected sellers would be vetted a little more carefully unless there was a rush to try something new without a good implementation plan which seems to be the most reasonable explanation.

Final Comments

As an entrepreneur who sells on eBay as part of my overall business strategy, I want eBay to be successful.   I want to have access to a selling platform that will enable me to grow my business.  But as an eBay seller who is charged ever-increasing selling fees for less exposure on a site with dwindling traffic and where I am also required to bear a high cost of site compliance to follow the ever-changing rules, I am not pleased with the direction that the eBay Bucks Beta program is taking.

I do quite a bit of shopping online but I don’t buy on eBay so it is difficult for me to evaluate the Bucks Beta Program from a buyer’s perspective.  Sure, I love saving money like everyone else but I would be suspicious that the 6-10% discount from selected sellers would result in me getting the best deal on eBay.  If I perceived that a seller had prices 15-20% above their competitors and eBay was offering me a 6% discount if I bought from the higher-priced seller then I would not be enticed to purchase.  I did a quick search of a few items that a couple of the selected sellers were offering and I was able to find competitors who offered the same item at a much lower price and many of the non-selected sellers actually had a better eBay reputation.

eBay’s rival, Amazon, is often able to offer lower prices to buyers than sellers on eBay for two main reasons.  One is that eBay’s selling fees have made it impossible for most eBay sellers to offer a low price while providing decent customer service.  The second reason is that Amazon takes the risk of carrying inventory.  With Amazon’s buying power, they are often able to negotiate significant price reductions which then allow them to pass along those savings to the consumer.  I have first-hand knowledge of this being the case in one particular area on Amazon. 

For value-conscious online shoppers, I simply don’t see how the eBay Bucks Beta program can compete effectively in the long run against Amazon’s strategy of directly and instantly offering the lowest price and free shipping.

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4 Responses to “Can eBay Entice Online Shoppers with Bucks News & Bonus Offers?”

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“For value-conscious online shoppers, I simply don’t see how the eBay Bucks Beta program can compete effectively in the long run against Amazon’s strategy of directly and instantly offering the lowest price and free shipping.”

This is the main reason why Ebay’s business model will fail. Ebay doesn’t work to keep up its revenue – it can only do that by increasing fees and that’s what it has been doing so far. Sellers are so squeezed for profit that they have nothing left they can pass on to their buyers. Buyers are looking for bargains and so they go on over to Amazon. This is fact…I’m an Ebay seller – yet I buy on Amazon more often than not!

Ebay could also increase its bottom line without chronic fee increases by intelligently increasing its GMV.

Perhaps using a derivative of the word intelligent and ebay in the same sentence makes little sense, but ebay needs to concentrate on bringing HONEST buyers back to the site. This isn’t done with gimmicks or 1 trillion listings.

It’s too bad that all those well educated people in San Jose have yet to figure out how to do this.

I search before I buy, on both Google and Google shopping. Price is generally not the be all and end all, within reason. I look at condition and how comfortable I feel with the sellers verbiage. Shipping cost to Hawaii is often the deal breaker, unfortunately.

eBay is almost always higher priced for commodities so the 2% would not be attractive.

If larger sellers routinely write non-compliant eBay listings, that says larger sellers are in the driver’s seat. eBay needs them, so they can do what they like.

The proof will be if you start seeing larger sellers putting up signpost listings that are clearly intended to drive traffic to their websites to buy off-eBay.

The final proof will be in what happens to eBay’s revenues over the next three quarters.

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