There's a little known feature that is hidden deep within PayPal, allowing you to opt-in to get a lower (2.5%) rate if you receive more than $3,000 in payments each month.
Thanks to Scott Wainer for his excellent post on PayPal's secret merchant rate for this information!
by Simon Slade
For the past decade, eBay has dominated the market for online auctions. It is such a strong brand that the word "eBay" has became a verb that means "to sell by online auction," just like "google" means to look something up online. Traditionally, other sites have had tremendous difficulty breaking into the auction space.
image credit: section z
But this week's sellers' boycott on eBay gave some smaller auction sites a new window of opportunity.
Outraged over fee hikes and upset over changes to the feedback system on eBay, many of the power sellers on eBay have gone on strike this week. One of their biggest complaints is that instead of leaving negative feedback for buyers, they will have to fill out tedious complaints with eBay's Security & Resolution Center. While eBay has drawn criticism for hosting a few dodgy sellers, there are plenty of legitimate issues with buyers. I know for sure that a small segment of buyers take advantage of sellers by buying 100% genuine items and claiming they are counterfeit, demanding refunds, claiming items never arrived when they actually did, etc.
As eBay power sellers went on strike from February 18th to 25th, smaller online auction sites are reporting that business has never been better:
CozyBug is a local auction site that focused on selling things that are too big to ship - much like Craigslist. This week the site has boomed with a 4,400% increase in daily traffic.
MommyAuctions , a women's auction community, has seen the number of items for sale on the site boost from 2,500 to over 4,000.
New statistics show that auction listings on eBay are down 13% this week.
While I am glad to see more options for sellers and some competition for eBay, I personally think that eBay is still strong enough of a brand that it will have the upper hand in online auctions for a long time to come. Even if the current community of sellers were to leave the site entirely, there are thousands of new online sellers every week who could eventually take their place on eBay. Diversity is good. Competion is good. And only time will tell what's going to happen in the online market space.
Ebay recently announced that it will make major changes in the way that it handles feedback. It will become impossible for sellers to leave negative or neutral feedback about buyers. Sellers that meet a list of positive criteria (fair shipping prices, accurate descriptions) will get lower listing rates, but many sellers believe they are getting socked with higher commission rates.
This is similar to what has happened with pay-per-click ads. A couple of years ago, Google announced a "quality score" for AdWords that penalized certain business models that it disliked. Google sharply hiked the prices on some types of websites, so things like e-books, shopping comparison sites, and lead-generation squeeze pages all became difficult to affordably advertise with pay-per-click.
For eBay's own sake, it's probably a good idea to try and improve the sense of security on the site. There have been a lot of abuses of the eBay system with outrageous shipping charges, misrepresented products and fraudulent buyers – so people are increasingly wary.
It's probably a bad idea for sellers and entrepreneurs to be completely dependent on one company's score or assessment of your business practices. Ebay is still a good way to sell products online, but it might be wise to consider diversifying your marketplace. You are always better off with your own website and alternate ways to drive traffic (aside from search engines and eBay listings), rather than depend heavily on just one company's policies and approval.
You don't want to put all your business eggs into someone else's basket! 