Question
Jay pointed this out to me, the Ebay Elite is discussing it today:
"BestBuy (BBY: news, chart, profile), a specialty retailer of consumer electronics, has launched two outlet stores on eBay (EBAY: news, chart, profile), the world's largest online marketplace.
The outlet will offer consumer electronics and computing products while the second outlet offers used products in the North Virginia/Washington area. For Best Buy, it's a way to get in front of eBay's 95 million consumers.
For eBay, Best Buy will pay about 6 percent of the sales it gets on the online auction site. But Best Buy's presence is yet another positive trend for the online marketplace as corporations increasingly tap the Web giant for its distribution.
"We definitely see the trend accelerating," said Scot Wingo, president and CEO of ChannelAdvisor, which helps companies sell excess inventory on eBay and other online sites. "It started with manufacturers [IBM, Motorola, Nokia, etc.] and now is moving to retailers more and more."
If BestBuy were to open its outlet on its own site, said Wingo, the retailer might cannibalize its own business. "If you spend $x to get a customer to yoursite.com, you want them to buy new stuff, not discounted," Wingo explained. Additionally, it's hard to manage two sets of inventory, two sites and two marketing programs.
Additionally, discounted items can be sold for 60 to 80 percent higher prices than traditional liquidators get."
Some of the EE people think Best Buy is paying low or no listing fees in exchange for Final Value Fees only? 6% of sales is lower than almost everyone I've spoken to in recent years.
Can anyone here confirm?
Marie
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Maybe they just didn't get the terminology right, but by characterizing it as a percentage of sales, they seem to be talking about Final Value Fees. eBay charges us 5.25% of the first $25 of an item's selling price, so if Best Buy is paying 6%, they're not getting such a good deal. http://community.here.com/infopop/em.../icon_wink.gif
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Marie
The 6% fee would not be unreasonable if one is selling higher ticket items. The FVF falls as price goes up. So it is quite easy to pay about 6% average (listing fee + FVF) if one lists a lot of items which sells in the FVF of less than 5%. One of my consignor is about 5 to 6% of total eBay fees. However, one must have high sell thru percentages to achieve this. Otherwise, the listing fees on the unsolds will raise the percentage.
Hard to tell from the article what the 6% represents.
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I don't know about Best Buy's fee arrangement with eBay but I DO know they don't take PayPal. http://community.here.com/infopop/em...icon_smile.gif
http://www.channeladvisor.com/mercha...stbuy/home.htm
http://members.ebay.com/ws2/eBayISAP...est_buy_outlet
http://members.ebay.com/ws2/eBayISAPI.dll?ViewUserPage&userid=best_buy_regiona l_outlet
Blanche
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I read this story under the CBSMarketWatch/Bambi Francisco byline.
I thought it was a new venture, the word rent caught my attention and 6% seemed low.
I searched eBay and found both Stores.
Seems they have existed for a while, I expect she used rent to mean fees and the amount of 6% is likely an assumption of averaged fees.
I think it was a poor choice of words and some wishful thinking from ChannelAdvisor rather than a separate fee agreement from eBay.
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Hi Folks,
I wanted to clarify the CBS BestBuy story. I was responsible for the 6% comment.
Bambi asked me what Best Buy would pay for being on eBay and I told her the normal eBay fees. She asked what that would be like for them and I said that given their conversion rates (75%+) and average selling price (well north of $200) it would be in the 6% range.
This came out in the article to not be totally clear.
I frequently have discussions with sellers in the < $50 categories and 6% sounds crazy, but if you look at the fee schedule, and work it out you'll see you can actually get into the 4% range with certain scenarios.
You can rest assured that Best Buy (as well as other enterprise sellers) pays the same fees as everyone else.
Sorry for the confusion!
Scot
ChannelAdvisor Corp
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Thanks for the clarification Scot, and the link to your blog. 'Hope we'll see more of you around here.
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Scot!
If you check the feedback of best_buy_outlet there is an example of mutually withdrawn feedback. It is dated March 19th. Interesting that the feedback stays but the rating is gone and there is a comment from eBay about it being mutually withdrawn.
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Paid 3/12.Poor communication, no returned emails/phone calls. Terrible service! Buyer buyer( 31) Mar-19-04 06:47 item number
Reply by best_buy_outlet: Order was cancelled at the buyer's request when we spoke on the phone on 3/12. Mar-19-04 08:01
Rating Withdrawn: Buyer and seller mutually agreed to withdraw feedback for this item. Learn more. Mar-19-04 09:41 <HR></BLOCKQUOTE>
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hey marie ,um i was meaning to show you this,your company is on that ripoff.com site i think the person that posted about yall are completley wrong annnyway they have a responce thingie if your added tot he site wouldnt be a bad idea to tell your side of the story
ripoff.com
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Hi Jasmine,
As you say this feedback was "mutually withdrawn" which is a new eBay feature that everyone can take advantage of (but I admit it's hard to get the buyer to go along most of the time). I think they started this in early Feb.
Last time I checked they had info on it here.
We run regional outlets for several large companies and one of the interesting challenges is educating eBay buyers to the concept that you need to be near the physical location vs. anywhere in the US. As more outlets come on line this becomes less of an issue because more poeple are closer to at least one outlet.
For example, Sears has 16 open and pretty good coverage.
Also as you will see in the feedback we also have issues with eBay buyers not being used to paying sales tax and like every seller we always are finding bidders don't read the auction details before bidding in many times.
It's interesting that a seller is a seller and we work with all sizes and there's more in common than you would think.
Scot
P.S. We've seen an interesting trend in the last 3 months where buyers will call/email/neg < 12hrs after auction close not understanding where the item is. Not sure what's going on there!