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Member Workshop: The Smart Guide to Listing Fees - Nov 06
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Last Post Nov 6, 2006 12:08 PM by: deirdre@ebay.com
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deirdre@ebay.com
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Oct 31, 2006 8:14 PM
Topic: Member Workshop: The Smart Guide to Listing Fees

Host: hammertap
Date: Monday 11/06
Time: 11:00 am to 12:00 pm PT
Location: Workshop Board

Description: Please join Jen Cano of HammerTap market research, a Certified Solution Provider, as she discusses how to decide which listing fees will boost your profits. eBay advice is everywhere. Some might claim that bold is a must, while others swear against it. So who is right? The truth is that what is best for your neighbor might not be best for you. Since every penny counts, you need to know which pennies and dollars you're investing to earn a greater profit, and which dollars you're just spending. Join this workshop to learn how to decide which listing features will attract more bidders and higher-paying buyers.

Cheers,

Deirdre
eBay Community Development
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:47 AM
Which Listing Fees Skyrocket Your eBay Profit?

If the eBay forums are any indication of hot topics for our eBay community, I’d say that today’s topic ranks nearly at the top of the list. Advice about listing features is everywhere, and it all seems to conflict. What’s the truth?

Hi, I’m Jen Cano - education expert at HammerTap and eBay Certified Consultant. HammerTap is an eBay Certified Solution Provider, and we are the creators of the eBay market research tool that makes it easy for you to decide which listing features help your chances to sell on eBay (and which just cost more listing fees).
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:47 AM
Guessing Games

When I was a kid and there was a major decision to be made, such as who would get the biggest cookie, we played a guessing game. There were five of us, including me, and my mom would say “I’m thinking of a number between one and a hundred.”

If I were lucky, I’d guess the number closest to the number in her head. I’d get that big cookie and do my happy dance. If I weren’t lucky, I wouldn’t get it, and I’d watch one of my other siblings do the dance, disappointed that I didn’t get that extra half-bite of cookie.

These, as we all know from experience, are the hazards of guessing games.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:47 AM
No More Games

Guessing games might be great for deciding things like who gets the biggest cookie. But you have other choices when it comes to deciding which optional listing promotions (such as bold and highlight) you’ll use.

What you really want to know when you’re deciding whether or not to use an optional listing feature is whether it will add to your profit. It’s a simple question.

And advice is everywhere. Some may tell you to always set a reserve price for your listings to ensure you don't sell the item for less than it cost you. For some products, that's sound advice. For other products, on average you'll end up with a higher closing price without it. So how do you know when the extra features are worth it?

Reliable market research tools reveal which features are just spending more money, and which features will most likely bring in a bigger profit.

The key is to make your investment with confidence. Boy, don’t I wish I’d had a research tool for my mom’s mind. Imagine the cookies, rides in the front seat, and first turns I’d have enjoyed when I told her the number she was thinking – with confidence!
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:48 AM
TMX Elmo at Auction

Let’s dive right in to an example.

TMX Elmo (Tickle Me Elmo Extreme) is a hot seller on eBay right now. Let's take a look at it as an example to see if sellers of this lovable toy are getting their money's worth out of the listing features they use.

Using HammerTap, I found TMX Elmo's Auction Success Rate to be just under 75%. The ASP (Average Selling Price) was $66.08. These averages were calculated across all listings of TMX Elmo on eBay, regardless of features.

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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:48 AM
Time to Take a Guess
Before we see the results about how effective certain extra features were for TMX Elmo, let’s make some guesses. Just out of curiosity, let’s hear which features you think would work for that product. (Yep, I’m talking about bold, highlight, gallery featured, etc.)

Go ahead and post your answers now.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:48 AM
Profitable Listing Features

We'll use our average success numbers (75% success rate and $66.08 selling price) as our baseline to measure the success of various listing features against. To determine if listing features boosted success for TMX Elmo listings, the final selling price has to be better than our averages for both success rate and selling price. That is, they have to be better than a $66.08 selling price and 75% sold.



Figure 1 - TMX Elmo Toys

Figure 1 illustrates how using the bold feature increases the selling price from $66.08 (the average price regardless of listing features used) to $67.99, a difference of $1.95. Now realize the bold feature costs $1.00 in additional listing fees. So, using the bold feature, you can count on making $.91 more than you would if you didn’t use the feature.

(Remember, though, this is just for TMX Elmo—not all products across eBay.)
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:48 AM
Effect of Listing Features on Auction Success Rate

That's only half the story. We find in Figure 1 that when bold was used, the Auction Success Rate wasn’t better than our baseline of 75%. So, we can conclude that bold didn’t help increase the chances of selling.

But, that’s no big deal since you can relist an item on eBay right after an auction closes at no additional charge. So even if you don't sell the item the first time, chances are you will sell it the second time, even at a 66.75% success rate.

Now let's look at the highlight feature. Listing with this feature, we increase the selling price from $66.08 to $68.52, a gain of $2.44. But, just as with bold, this feature didn’t increase the chance to sell.

However, it costs $5.00 to use the highlight feature. A quick subtraction problem shows we don’t increase our profit by adding the highlight feature. This means we should seek other listing features which will improve our chances for success.

But remember, this is just what we found true for TMX Elmo. For other products, the highlight feature may be worth many times what this listing feature costs. Again, that's why there's no substitute for eBay market research. Even very similar product listings may have very different results when listing features like bold or highlight are added to them.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:49 AM
Step-By-Step Process

So here's the step-by-step process to find out which listing features are worth it:

1. Determine how much adding a feature to a product increases the selling price.

2. Compare the amount the selling price increased against the cost of using the listing feature ($1 for bold, $5 for highlight, etc.)

3. If the increase in selling price is more than the cost to use the feature, you have a positive profit by using the listing.

4. If not, seek other listing features that will improve your chance to sell it for more.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:49 AM
Developing a Feel for Profitable Listing Features

The main thing I would warn against is assuming profitable listing features for one product will apply to another kind of product. This is where much of the bad eBay advice you’ll find out there comes from.

An eBay seller learns through trial and error that a specific listing feature makes them more money on a product or category of products. They announce their success with the feature, and an eBay Myth is born.

Extensive research done across many product categories has proven time and again that you simply can't generalize when it comes to eBay listing features.

What works for Elmo toys may not work for iPods. The only true test is to perform the research. The good news is that it only takes a couple of minutes to research eBay listing features with HammerTap. I can't stress enough that if you don't base your eBay business on research, you're just flying blind.

As you research various products and the factors which lead to successfully selling them on eBay, you'll begin to get a feel for what works for that product category.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:49 AM
Taking the Temperature of the Market Often

Although your product might not change, the market does. You'll want to check back from time to time to assure yourself that what worked last time you researched a product still holds true.

Some trends are seasonal. A particular listing feature might boost your chances to sell in July, when it did nothing for the product in April. Sometimes fads explode the sales of a product, then drop off (think Beanie Babies). Just stay on top of the market with research, and you'll do fine.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:49 AM
One Last Example
To illustrate how what works for one product often won't apply to another product, in this second example, I used a completely different product, DVD players.

Time to Take Another Guess
Before we see the results about how effective certain extra features were for DVD players, I’d like to hear your guesses about which listing features work best for this product on today’s eBay market.

Go ahead and post your answers now.
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:50 AM
Different Product, Different Results

I used the HammerTap research tool to take a look at what listing features contribute to successful listings of DVD players. Figure 2 below shows the results:



Figure 2 - Portable DVD Players

Initial research in HammerTap showed that for portable DVD players, the ASP (Average Selling Price) came to $70.71. Its Auction Success Rate was 64%. So for this example, unless adding a listing feature increases the ASP over $70.71 + the cost of the listing feature, we won't consider adding that particular listing feature a success.
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aloha500_0
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:50 AM
hELLO, i WAS WONDERING a couple things,,,1. what is save to templets and does ebay charge for this selling feature? 2. what is a good/fair handeling charge?
Thanks Aloha
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htdeepanalysis
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Member Workshop: The Smart Guide to Listing Fees - Nov 06

Nov 6, 2006 10:50 AM
Analysis
Figure 2 tells us that for portable DVD players, the use of the following listing fees increased the Average Selling Price more than the cost of adding the listing feature:

Bold: +$9.21 (listing fee $1)

Highlight: +$53.29 (listing fee $5)

Gift: +$7.06 (listing fee $.25)

Our numbers here are based on a general search of portable DVD players. When I narrowed my search to Sony, Panasonic, or JVC I found the Auction Success Rate and Average Selling Price changed. Not only do the effectiveness of which listing fees change across categories, but even within the same product category.
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