Every business bakes the cost of advertising into their prices. Some are just less transparent about why they're raising prices.
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Reverb increasing seller fees
- Thread starter BunchyMutt
- Start date
Im not against a company making a profit (I own two businesses so I get it) but, the timing of this along with how high shipping has become really turns me off to selling on reverb. But, usually when a company starts expanding like this and charging more, a competitor comes along to undercut them. Hmmmm....a THIRD business??? Do i dare? =)
Worse for you or for them? They're probably thinking that due to all the "stay at home", stores being closed, and resulting increase in online purchasing, they going to make more money doing this.
worse for us. Now that they’re owned by Etsy, they are just wanting to increase profits and want to “give to the communities” but using the sellers to actually pay for it and make them look better.
they’ve lost me as a seller who sells $5k+ in gear a year.
I wish they would keep the lower rate for personal non-business sellers who don't make a profit when they sell their personal items but rather almost always sell at a loss. I would write to them and request they consider that but for sure that would be a grand waste of time.
Being a fairly recently retired IT professional I’ve been involved with enough e-commerce services clients over the years that I’m a little cynical when it comes to buzzword laden announcements like Reverb is making right now.So based on my own experiences with these sorts of initiatives, I’m going to try to translate some of them into everyday English:
Translation: We’re intending to increase the number of annoying banner ads on websites and pop-up ads on YouTube to further annoy the ever living tar out of everyone on the web.
Translation: We’re hiring a few more people to respond to your service inquiries. It won’t reduce the amount of time you already have to wait to hear back from us. But with the increased sales we’re expecting will materialize from our already mentioned advertising blitz and related customer data mining plans, we’re increasing staff in hopes it won’t take any longer than it currently does.
Translation: We’re hiring two more people to supplement the five we already have to redo our web templates and server scripting. Some of these enhancements will be included free with all accounts. But others (such as preferential search positioning) will be introduced as enhanced “pro” features that you can add to your account for an additional fee.
Translation: We’ve already made our decision and our stakeholders don’t really care what you think about it since we’re pretty much the only real game in town. But it’s still polite to solicit customer opinions since we don’t want to seem too obvious about it.
BTW…our planned fee increase from 3.5% to 5.0% actually represents close to a 43% increase in the fee we’re about to start charging you to sell something. We’re hoping you’re lousy enough at math that you won’t notice that and instead think: “5% is only 1.5% more than 3.5%. And 1.5% is nothing.”
———
Oh man. You just gotta love it!
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The bad news is for buyers not sellers. This will cause prices to up by, let's see, about 1.5% 
So based on my own experiences with these sorts of initiatives, I’m going to try to translate some of them into everyday English:
Translation: We’re intending to increase the number of annoying banner ads on websites and pop-up ads on YouTube to further annoy the ever living tar out of everyone on the web.
Translation: We’re hiring a few more people to respond to your service inquiries. It won’t reduce the amount of time you already have to wait to hear back from us. But with the increased sales we’re expecting will materialize from our already mentioned advertising blitz and customer data mining plans we’re increasing staff in hopes it won’t take any longer than it currently does.
Translation: We’re hiring two more people to supplement the five we already have to redo our web templates and server scripting. Some of these enhancements will be included free with all accounts. But others (such as preferential search positioning) will be introduced as enhanced “pro” features that you can add to your account for an additional fee.
Translation: We’ve already made our decision and our stakeholders don’t really care what you think about it since we’re pretty much the only real game in town. But it’s still polite to solicit customer opinions since we don’t want to seem to too obvious about it.
BTW…our planned fee increase from 3.5% to 5.0% actually represents close to a 43% increase in the fee we’re about to start charging you to sell something. We’re hoping you’re lousy enough at math that you won’t notice that and instead think: “5% is only 1.5% more than 3.5%. And 1.5% is nothing.”
———
Oh man. You just gotta love it!
Yep.
I remember working e-commerce.
“Hey, look at all these amazing benchmarks we’re hitting! Look at all this money we are bringing in with all these new clients! Sorry, we can’t continue the bonus program. Yeah, the team has to stay later as we can’t afford to bring more people in. Yep, benefits are being reorganized (lessened).”
On a place like Reverb that offers a service, the seller is still the buyer. It’s the seller that pays Reverb, not the buyer of the gear. So yeah it’s seller (buyer) getting hit.
People will only pay so much for a piece of gear regardless of fees etc so it will be the seller taking most of the hit on this. And also it’s not the selling fees that are getting out of hand as much as it is the evil payment processing fees. I wouldn’t mind 5% if that’s all it was. Add in processing fees and you handing over almost 10% of your sale.
People will only pay so much for a piece of gear regardless of fees etc so it will be the seller taking most of the hit on this. And also it’s not the selling fees that are getting out of hand as much as it is the evil payment processing fees. I wouldn’t mind 5% if that’s all it was. Add in processing fees and you handing over almost 10% of your sale.
I am a graphic designer that does primarily website design and development. Have done tons of e-commerce sites and what you said in your other post is 100% correct. "We want to grow our bottom line and the easiest way to do that is charge more. If things go well we will hire a few more people! Thoughts?" The rest of their schpiel is marketing buzzwords. Im surprised they didnt use: "As a leader in musical supply solutions...". When you go to reverb, most of the ads now are businesses advertising full price new products. Just like e-bay and now, FB marketplace.Ah! I can see you were down in the trenches too!
Honestly, CL hasn’t been too terrible lately. I still get tire kickers and a guy who always tries to get things half off, but most real buyers will do a quick FaceTime to make sure the item works and will then meet same day, in a public place, with cash in hand.
I use Reverb only for information, the same way I use Amazon. If I see something I like I go to the seller's website. Sometimes I can get a better deal because they don't have to pay anything to Reverb, eBay nor PayPal.
Oh yeah, I don't use PayPal either. Same reason - they went socio-political. I dislike businesses using my money to make themselves feel better, while supporting entities I may not care for. A union I was in used to do this, and eventually the Supreme Court declared it unconstitutional. But not so for businesses, where one has the freedom to come and go. Personally, I think taking any political stance is stupid bad for commerce. You're guaranteed to piss off half your customers.
It's just too hard to buy anything anymore - where is it made, who do they support politically. It's so effed up, I only buy what I absolutely need. But not from the aforementioned places.
Oh yeah, I don't use PayPal either. Same reason - they went socio-political. I dislike businesses using my money to make themselves feel better, while supporting entities I may not care for. A union I was in used to do this, and eventually the Supreme Court declared it unconstitutional. But not so for businesses, where one has the freedom to come and go. Personally, I think taking any political stance is stupid bad for commerce. You're guaranteed to piss off half your customers.
It's just too hard to buy anything anymore - where is it made, who do they support politically. It's so effed up, I only buy what I absolutely need. But not from the aforementioned places.
I'm always skeptical of things like this. For the most part I see this as "what the market will bear" move. Percentage references are really pretty useless unless you know what the baseline is. If you have a single full-timer on your product team working 40-hours a week, that means you have to hire a part-timer working only 16 hours a week (no benefits liability at most places under 20-hrs. per week). If you have two full-timers, that still means just 1 part-timer working 32-hours per week. Conversely if you have 100 people working 40 hours a week, 40% means you add 10 more people working 40-hours a week (400-hours is 40% of 4,000 hours).
And then the question is what is needed to get the job done. SEO (search engine optimization) can be done for most businesses by one person running an analytics program and using a spreadsheet. SEO is not rocket science, but it is more of an art as more and more rules come and go with search engines. So maybe you are adding a second person?
Advertising is the spot where this could easily turn into a boat - definition of a boat is "a hole in the water that eats money". Unless you have someone with tremendous marketing and analytical skills on your team who has applied some set-in-stone parameters, it's real easy to go bankrupt feeding advertising departments.
I'm just not convinced that this is a big enough company to actually need that 42% increase in fees. I will be amazed if there is a concrete improvement in customer service (25% scheduled increase), product info and "tools" (40% increase - really??), and marketing initiatives. One of the things about marketing and advertising that you have to keep close watch on is "cost per customer". You have to figure out how much a new customer is worth to you, and how much will your cost be (advertising and marketing) to procure that customer. That is one of the main checks on preventing marketing and advertising departments from turning into huge dollar sucks.
Despite the platitudes they promise, this still comes across to me as "what the market will bear". I believe, at this point in their development, that they have to be careful not to price themselves our of this market. A 42.9% increase in fees is NOT a small increase. "Oh, its only a 1.5% point increase" which is 40% of your previous 3.5% fee schedule. Do they also have "listing fees" besides the selling fees? If not, look for those to appear next. I mean after all..."evil bay did it!"
It's a relative position. If the initial fee is small enough, then doubling or tripling it could keep the overall effect small relative to the sale transaction. On the flip side, if the initial fee was large enough, then a small percentage increase could have a large impact to the transaction.
... but you already knew that when you posted.
$5 to flip a $100 pedal instead of $3.50. $50 to flip a $1,000 bass instead of $35.
Seems like a tolerable increase to me. YMMV
