eBay and Amazon Increase Selling Costs Through Advertising
The following news headline caught my attention this weekend: “For Amazon and eBay, advertising is another way to increase seller fees. “
But the author had a warning: “Shopify could become more attractive” to sellers given the rising fees in online marketplaces.
The competitive advantage of sites like eBay and Etsy is the low barrier to entry, while platforms like Shopify require more engagement and investment from sellers – and they don’t necessarily bring traffic to them. ads from an individual seller like online marketplaces, leaving it to the seller to generate sales.
Small sellers who don’t have the skills or desire to move to ecommerce platforms like Shopify or BigCommerce, however, have a few options – Mercari, Poshmark, Facebook Marketplace, and niche sites.
While this is not an apples-to-apples comparison, markets may want to look at Google Shopping. It went from free ads to paid play, and now it’s back to free, giving merchants the choice of whether to advertise or not.
The lesson Google may have learned: Buyers care about relevance. This is something eBay learned in 2010, but in his thirst for the freshest as growth slowed, he may have forgotten about it.
In 2010, eBay discontinued its Featured First advertising program, which allowed top-rated sellers to pay for the best placement in search results. The reason eBay provided at the time: “so that the ads most relevant to a buyer’s search from sellers who offer great value and excellent service are consistently shown at the top of search results – the underlying goal of best match. “
In other words, buyers didn’t always find what they were looking for because ads avoided relevant ads.
The bottom line for sellers: Online marketplaces should offer exposure to listings from sellers who pay listing and commission fees; payment of advertising costs should be optional; and ads should not have a negative impact on the relevance of search results.
So what’s the burden of advertising fees on eBay, Amazon, and Etsy? If you don’t pay, is there a loss of exposure from your ads that results in less sales? And what are the alternatives?