The Rebirth of EBay at Southgate Coins - Eight Years Later, Not Much Changed

The Background

In early July 2013, immediately after I (Maya) had returned from maternity leave, Rusty and Marie informed me that we were diving full-on into “eBay, Round 2.” Although I personally have dabbled a little with eBay, mostly when there’s some cheap electrical gizmo I’ve broken that I need to replace, I had not had any experience as an eBay seller. But, I embraced the challenge, learned what Rusty had to teach me, and now I am here, a full 9 weeks later, to tell you about the experience.

Back in December 2005, some of you may remember that Southgate Coins’ owner, Rusty Goe, wrote a weblog entitled “eBay the great i am,” which related to readers the store's experience then with eBay, and how the (lack of) service we received from eBay, as well as the quality of eBay buyers and their idiosyncratic (and often petty) complaints caused us to “pull the plug” on that venture and cease eBay sales altogether.

Now to give you an idea of the magnitude of our endeavors, in our first eBay trial period we conducted about 1,600 transactions, for a total value of around $310,000, over the course of about a year and a half. For the 9 week trial period I'm relating to you below, we conducted about 150 transactions, for a total value of about $35,000. (We weren't exactly a small fish in eBay's big pond, if you know what I mean.)

Now, eight years later, Rusty and Marie decided to attempt eBay once more in the hopes that maybe the eBay culture has changed. Here are our findings thus far:

The Website Itself

Although I cannot personally say (as I was only 17 years old during the last eBay trial period at Southgate Coins), from what Rusty and Marie have conveyed to me, the website is similar, with many more “user-friendly” enhancements. For instance, you are now able to create and print shipment labels directly from eBay, which eliminates the need to produce labels yourself, and then meticulously upload tracking information for each sale. You no longer have to take each item to the post office; your regular mailman can pick everything up when he drops off your mail each day. This newer listing and shipping process is much more automated, and therefore streamlines your work for the majority of your everyday listings.

Southgate Coins' ME page on eBay - We Buy & Sell Coins, Gold, and Silver

There is also an eBay community forum, where many questions about the buying and selling process are answered with detailed, step-by-step instructions. This is in addition to eBay’s own guidelines and policies that are available in the Customer Support section of the website.

The eBay Community

In terms of the eBay community, it is much the same as it was eight years ago. Buyers are determined to buy items at would-be steal prices, and sellers are determined to sell items at the highest possible prices. But, the truth is, eBay is usually the only real winner (See “The Fees” below.)

The buying community has gotten crafty, though. In only 9 weeks of sales, we have already had to block at least 4 people due to their manipulation of the eBay system. In one instance, an eBay customer service representative informed us that our top two bidders were working together to scam sellers into rock-bottom Second Chance Offer sales by bidding each other up, and then having the winner claim that they mistakenly bid over the amount they were able to pay so that his buddy could get a deal by saying that he was essentially bidding against himself. We couldn’t believe how tricky people have gotten. But, at least the rep swiftly put trackers on these two people’s accounts so they couldn’t scam anyone else.

The Feedback System

The feedback system is much the same as it was. For whatever reason, this score seems to be incredibly important to buyers and sellers, although the majority of the feedbacks are either petty or meaningless. It’s an unwritten rule that you have to publicly state that you had a successful transaction (whether you were buying or selling).

Southgate Coins' Feedback Scores on eBay - Visit our coin shop in Reno

Wouldn’t you expect any online transaction you participate in to be successful? I mean, obviously I understand a system that informs you about the crooks, the slow-payers, the slow-shippers, and the people with poor-quality service, but it’s the required positive feedback that doesn’t seem clear. Is the feedback “A+++++++ EBAYER” or “Tx” really going to be the piece of information that persuades you to buy or sell?

The Resolution Center / Customer Support Hotline

According to the Goes, this has been the area that has changed the most since the eBay days of long ago. Previously, there was a huge struggle to have any issue resolved because eBay did not have a Customer Service Representative you could contact. And, if you were magically able to reach one, they weren’t very helpful, and would almost always side with the buyer, not the seller.

This fact is largely why Southgate Coins quit selling on eBay back in 2005. When we were innocently taken advantage of and stuck with unfair, negative marks for our store’s online reputation score, we found out we had no one to turn to.

Now, it seems that after a few years of eBay realizing they better be fair to both buyers and sellers, the tables have changed. eBay remains an impartial party, but both sides of any dispute are heard.

This time around, we had a dispute with a customer complaining about our store offering combined shipping. The truth is, we don’t have to offer combined shipping—especially if the dollar amount of the total purchase warrants a more expensive shipping method. To top it off, this is specified in each and every one of our listings. But, you could tell this person was going to be a stickler.

So, we offered a $3.95 discount off of the would-be total shipping cost (we charged him $10 of the $23 it cost us to send the package registered-insured), and the customer was happy. Before we did so, though, we contacted eBay, told them the situation, and asked if there was anything that could be done if this person (who bought four items and therefore was entitled to leave four feedbacks) left negative feedback about our shipping policies. The eBay representative smoothly answered, “If they do that, you just give us a call—we’ll remove the negative feedback immediately.”

Wow! Really?! That’s it? ... That is how it should have been eight years ago, the last time we played this game. Needless to say, all instances where we had to contact the Resolution Center turned out in our favor, not because we complained, but because we read eBay’s fine print, and went above and beyond to provide our customers with a quality shopping experience, great inventory, and specific policies for doing business with us.

Now, here's the thing—Ebay "suggests" (ie. pressures) sellers to offer free shipping so that buyers will have more incentive to purchase items. Well, if you're selling items that may need to be insured or sent registered, you're pretty much guaranteed to eat some or all of the shipping costs, depending on how much you sold the item for. Not only that, but they cloak this suggestion as a benefit to you, the seller. But really, if you sell, they get a percentage of the sale price... Really beneficial to you, huh?

The Fees

Here it is—the tough stuff: As I mentioned earlier, eBay (along with their affiliation with PayPal), is the only true winner when it comes to online auctions on their site. On average, eBay fees for our transactions were in the 10.3%-range. In addition to that, PayPal fees cost about 2.6%, and shipping costs were about 2%. Add another 1% for the portion of sales to Nevada residents (where sales tax needs to be paid on the transactions), and you have a total average cost of 15.9%! That means only about 85% of every dollar earned on eBay was ours to keep.

Southgate Coins; Ebay Fees report - Sell your coins in Reno

Now this 85% take-home rule does not include labor costs to prepare (find, photograph, edit, describe, list, monitor, package, etc.) the items for eBay, nor does it include the cost of items sold. In other words, if 85% of the total sale cost on eBay isn’t what you would expect to sell this item for at a retail store, you’re digging yourself in a hole!

Granted, eBay doesn’t get to keep the tax or the shipping, but still, roughly 13% (between eBay fees and PayPal fees) is a pretty good cut for hosting a website that allows people to list items for sale.

The Conclusion

There isn’t a week that goes by when we make an offer for items brought to us here at the store that we don’t hear someone say, “Oh, I’ll just sell it on eBay, then....” (Yeah, if it were that easy, we'd do it! Oh wait, we did...)

According to our experience, if we offer a customer $1,000 for their items in-store and they decline and instead sell it on eBay for $1,100 (if they’re lucky—they could just as easily wind up having to sell it for $900), they don't get to pocket that $1,100. After the fees and expenses are taken out, they become the happy new owner of a grand total of about $935!

Plus, that's not all—you also have to factor in that to receive that money, the person would have to learn to photograph their items, describe and post them on eBay, wait for the auction to conclude, wait for the buyer to submit payment, ship the items (which may cost more than the shipping fees he received from the buyer), and then wait 3-4 business days for PayPal to transfer the money to their checking account. Heaven forbid the buyer open an "Item Not Received" case on the transaction, which makes PayPal hold the funds until everything is resolved. Overall, this could be a 3-4 week process, when all along they could have walked out of our store with $1,000 on the spot!

Although eBay allows sellers to easily reach a huge group of people, in terms of making it your legitimate business venture, you would almost have to acquire products for zero cost in order to make enough profit after all the fees hit.

After this 9-week long experiment in dipping our toes back in eBay’s waters, we salute those who want to attempt to get the best prices for their items in online auctions. We may reappear on eBay from time to time, with little goodies for sale, but I think the easier money comes from doing business the way we’ve always done it—a friendly frontline assistant to greet customers, answer phones, and help with sales, and our network of dealers for wholesale transactions.

Tried and true seems to be the way to go. Sorry, eBay.