WWYC?
Longtime eBay sellers such as myself have seen numerous changes in the market. We’ve watched eBay’s business model change and grow, we’ve seen major shifts in the way business is conducted, and even in whom is doing the buying and selling.
Now, for example, there is no shortage of shops that will sell your item on eBay for you, if you don’t have the time or inclination to do it yourself. Generally they charge a fee – a percentage of the item’s selling price – and in my area that is about 30-40%.
Many of our members work as trading assistants (TA’s) who also take items in on consignment to sell, charging a portion of the sales price as a fee. Each TA sets their own fees, but in my experience 20-30% (before fees) is standard.
In reading a few days ago, however, I found an interesting article about flat-rate fees. ISoldIt4U.com is charging flat-rate fees for items they sell for you on eBay, starting as low as $9.95 for a $100-$250 item.
Interesting concept. However, most of us sell items for under $100, and we take a higher percentage of the profit as our cut. What does that mean for traditional consignment and TA’s? Maybe nothing yet, but it’s definitely a trend worth watching. If this takes off, it will require major changes in the way we do business.
And so I have to ask…WWYC?
What Would You Charge, if you were to implement a flat-rate pricing structure? How would this affect the way you do business? Would you continue to be a TA? Would this make you want to start? I can see it being frustrating for a TA’s ‘cut’ per item to go down, but I can also envision a huge increase in the number of people willing to consign their items with a lower fee structure.
Part of our business is being able to roll with change and find new ways to stay competitive, and this article gave me much food for thought. I hope it will do the same for you, and I’d love to hear some of those thoughts in the comments!
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I can see the logic of flat rate pricing. The work involved is often not well correlated with the value of the item.
I suspect many owners (those using Trading Assistant services) like the percentage system because feel the seller will work harder so her commision will be higher. But, most service providers are not paid commision, and do their best to ensure repeat customers and good word-of-mouth. A Trading Assistant’s reputation and business are at stake, just as any service provider’s, so there doesn’t need to be a direct financial incentive for each item to ensure good service.
Another benefit of the percentage system to the item owner is no risk. He only has to pay if his item sells, and no matter what the item sells for, he never has to pay more than that amount . But, this leaves all the risk with the trading assistant, who might spend many hours for very little payment or no payment at all. That risk means Trading Assistants need to be firm when deciding which items to accept, which can be awkward for all involved.
With a flat rate system, the owner will profit from the value of their items. The TA will be paid for her time and expertise. This alleviates the risk to the TA, while also ensuring the items value stays with the original owner.
I, myself, would much prefer to sell for others using a flat rate service fee. I would base that fee on how complicated the listing would be, such as # of photos needed, need for research, need to describe flaws, etc.
Cindy
PS – A hybrid system would likely be more satisfying – with the fee mostly flat rate, plus a small commision of selling price, perhaps 5-10%.
Also, I believe the bottom line for the TA would be about the same, without the highs and lows .
I also think it would lead to more carefully chosen items… since now the Owner has a reason not to consign lower value items (other than the TA having to refuse to sell items the owner feels are valuable and “wants to try”). With flat rate, the TA (and the owners) will focus on valuable items – which means more profits for both parties.