Our third anniversary was in July so the honeymoon is probably over. We get along pretty well although there are the usual petty irritations which arise in any relationship but so far nothing serious enough to contemplate leaving. However, at the beginning of this month, September, there have been changes which will require a rethink of the way in which I have been doing business on the site.
The next few posts on Red Ink Diary will detail my thought processes as I assess and execute my revised business plan.
A little over two years ago I wrote about the constraints of my business. I said
“Because I live on an island my choice of product is limited. I must pay freight on anything I buy to sell unless I drop-ship. Freight alone can eat profit margins. What I have sold for years is low ASP (Average Sales Price), but lightweight.”
Back then I sold greeting cards, die cuts for decoupage etc. To make a long story short, the change in peoples’ mailing habits and corresponding decrease in sales made it evident I needed to find a new product line. I have tried several, simultaneously, with varying degrees of success. My best sellers on Bonanza these days are patterns. ASP is $9.00 and to be competitive I offer free shipping within the USA and Canada.
As a charter seller or old timer on Bonanza I have never (in three years) paid a commission or Final Offer Value (FOV) fee on sales under $9.99. Items selling between $10.00 and $50 used to cost me $1 or 2%. This has changed for me as I now pay 50c for any sale under$14.30 just like the vast majority of other (newer) sellers on the site.
Edited for clarity 9/12/2011:
Bonanza does not charge a per item fee. The fee is based per transaction with a minimum fee of 50c. If I sell one item at 99c the fee is 50c. If I sell three 99c items, one $4 item and one $7 item the fee is still 50c.
Please note I am not complaining, Bonanza has no listing fees and the FOV fees are very reasonable. There was plenty of notice of the impending change and there will be no further changes through 2012.
So wheres the beef?
- Bonanza makes no allowance for shipping included in the price. None. Items which charge shipping receive a credit of up to $10 against FOV fees but those shipped ‘free’ do not.
- Tight margins on sales, this of course has nothing to do with Bonanza and everything to do with the economy.
eBay; due to it’s severely skewed search, high incidence of hinky buyers and ever more complex rules and regulations is not a viable option for my business these days but I still use it as a comparison. Lets do just that.
- Bonanza is a fixed price venue, therefore my spreadsheet compares sale fees only.
- Insertion fees for a fixed price listing on eBay would increase costs further.
- Bonanza does not charge listing fees.
- Both venues appear in Google product search.
- Payment processing fees are equal.
As you can see, for my $14.30 item eBay is 372% higher or $1.86. After adding in the 50c for 30 days fixed price insertion fee eBay’s cost of sale is $2.36 or a whopping 472% higher.
Fortunately there are other options
Y’all come back!