Understanding eBay Terminology…or Not!

Today, we will attempt to define/explain some commonly used terms one encounters when using eBay.  This list will not be all inclusive and is basically our interpretation based upon everyday usage that we have encountered over many years of selling on eBay.  I have often noticed that when we meet a new client and explain how the system works, some may have this blank look on their face which comes from the fact that they never used eBay nor heard of the particular terminology we are using.  We will now shed some light on the issues, keep you fingers crossed.

Feedback – A method of evaluating both the seller and buyer expressed as a percentage (%).  By having a rating system for all parties engaged in a transaction, users of the system may gain some degree of comfort when buying or selling from strangers.  However, eBay has once again diminished the value and importance of this system by changing the ability of sellers to rate a buyer.  This is somewhat ironic, as the buyer has only one task to complete once becoming the winning bidder, “paying in a timely manner”. The seller, however, has multiple tasks to perform in order to complete a transaction, including; 1. Properly describing the item up for sale, 2. Once sold, collecting the money, and swiftly packing and shipping the piece, 3. Resolving any problems that may arise, including items that are lost or damaged during shipping…to name a few.  The seller has the burden of performance and is rated either positively or negatively by the buyer in various individual categories.  However, several years ago eBay took away the ability of sellers to rate a buyer in a negative manner even if the buyer does not pay and is a total “deadbeat”.  We have noticed that the number of non-payers has risen dramatically since this change, resulting in lost sales. eBay does not support their “bread and butter”, their sellers, without whom they would not be in business.

Judy (joedawolf) has a feedback rating of 99.9% on over 15,000 eBay transactions…no small achievement!

Reserve The setting of a minimum price/bid that an auction must reach before the item can be sold.  The reserve is generally used when the piece is somewhat valuable or unusual and the owner does not what it to go too cheaply. Basically, it’s a form of protection with no guarantee that the reserve will be reached and the sale consummated.  An example of use of a reserve would be setting a price of $500, but starting the auction at $100.  You may attract bidders, sometimes many, at the reduced price, but until $500 is reached, the item does not need to be sold.  Once the magic number is reached, the sky is the limit as to what the final price may be.  One drawback to the use of the reserve is that eBay charges a fairly steep fee that is non-refundable, even if the reserve is met.  Judy prefers to set the price at a point that will attract bidding but not be too low as to be a concern to our client.

Auction vs. Fixed Price vs. Best Offer In most situations we list an item at auction, which is the listing of a piece at a particular starting bid, expecting that it will attract other bidders and sell for a higher amount.  The most prominent difficulty with an auction is to determine what is a reasonable starting price, one that will attract multiple bidders and obtain the best results.  Judy has spent many an hour trying to figure out the answer to this tough question, what is the fair value of an auction piece, as the starting bid may be the only bid?

A fixed price is setting an item at an amount that it will sell for, plain and simple.  The buyer accepts the price as listed and it is theirs.

Best Offer refers to a sale where an item is listed at a stated amount but the prospective purchaser can make a counter offer that may be accepted or rejected by the seller.  In most situations, the offer is a lowball one which sets the bar for negotiations.  Generally, we tend to accept offers that are in the range of 85% of what we listed the item for.

Insertion fee
The fee eBay charges to a seller for listing an item. This fee varies by the type of listing and is non-refundable.

Final value fee
A fee eBay charges to a seller when a listing ends. This fee is based on the “final value” of the item, which is the closing bid or sale price. The final value fee is not charged if there are no bids on an item or the high bid did not meet the reserve price that the seller set.

PayPal
A secure payment method offered by most eBay sellers for purchasing items. When buyers use PayPal, payment is sent from their credit card or bank account without giving any account information directly to the seller. All the buyer needs is the seller’s email address.  The seller is charged a varying fee for this transaction based on their volume.  Since we have a high volume, we generally are charged a lower rate than others.

PowerSeller
A seller on eBay who has maintained a 98% positive Feedback score and provided a high level of service to buyers. When buyers see the PowerSeller icon next to a seller’s user ID, they know they’re working with an experienced eBay seller.  We have been Power Sellers for many, many years.

Second Chance Offer
A seller can make an offer to a non-winning bidder when either the winning bidder has failed to pay for an item or the seller has a duplicate of the item. There is no insertion fee, but if the bidder accepts the offer, the regular final value fee is charged. We can also make a Second Chance Offer if the winning bidder didn’t pay for the item.

So there you have it, eBay in a capsule.  However, eBay is much more complicated than the above, which will set the stage for future stories and articles.

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Published in: on July 4, 2010 at 11:03 am  Leave a Comment  

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