eBay SE Asia have announced an “invitation only” listing promotion for sellers in their region.

Sellers who list on the US site from now through to 31st December, and offer free shipping, will receive 25% off final value fees … provided at least 25% of their listings total qualify for the promotional rate.

The emphasis on free shipping is very clear in the announcement -

This holiday shopping season, we are spreading the festive cheer to both sellers and buyers. Just offer free shipping on 25% or more of your listings on eBay.com and you’ll enjoy 25% off Final Value Fees for these items.

Your buyers get their items shipped for free and you get savings on your selling fees, so everyone has reason to celebrate!

OK, as we keep saying, there’s no such thing as free shipping.  Therefore someone has to pay for it somewhere down the line, and a 25% reduction in FVFs is not going to cover it.  Even using the highest FVF rate (an eBay.com stores listing at 12% in the lowest product price tranches) means a 25% FVF reduction is equal to 3% of selling price, but remember PayPal will still collect their cut on the full sale price.

Remember too that loading the shipping into the product price will increase initial listing fees, as well as the pre-discount FVFs, and for sellers based outside of the USA, because the site is now defacto PayPal-only, you’ll also pay the fees there too.

The PayPal fees are slightly less of an issue as you’d pay them on the sale price plus shipping charged even if the two were shown separately to begin with.

The wording of the offer continues to rankle me – eBay (in previous announcements and in their discussion forums) have continuously told sellers to load the shipping price into the product price.

Shipping is therefore not free for the buyer, and to comply with European Sales Regulations, eBay MUST stop calling it “free” shipping, and use the term “inclusive of shipping” – sellers must do so too.

eBay, of course, are not the entity legally responsible for selling the item, therefore they don’t care that they are encouraging their paying customers to fall foul of the strict advertising laws within the EU.  Nice attitude, hmmm?

But it doesn’t stop thee.  Tucked away on a little tab to the terms and conditions, the following highlights are in large font in a box at the top (emphasis is mine) -

• To qualify for this exclusive promotion, your free shipping listings cannot include any additional shipping-related charges such as insurance, handling or packaging costs.
• You may be disqualified if you switch to a slower shipping service (than the one you usually use) for your free shipping listings.
• Final Value Fees discounts will be given as rebates credited to your registered PayPal account by Feb 28, 2010

You know, my mum stopped holding my hand when I was six years old.  Since then I’ve learned to look beyond the obvious in any situation.  Given eBay’s last four quarterly financial results, this delayed rebate is one way to boost the numbers for the year-end of a dismal 2009 performance.  I hope the Wall Street blinkered brigade are reading this.

Why doesn’t eBay simply issue contracts of employment for all its sellers?  That 2nd condition, to me, is a completely unacceptable clause – especially when paired with the shipping caps and mandatory “free” shipping in many categories on the sites eligible for the promotion.  eBay are systematically removing all power of choice and marketing differentiation from their sellers.  They are also creating a situation where it is impossible to make a profit via their channels.  And they wonder why the Marketplaces division is in such dire straits?

Also tied to the same email, announcing the offer above, is an announcement from international parcels carrier DHL.

The DHL announcement offers a 30% shipping-cost cut for Thailand-based eBay sellers, despatching to Australia, Germany, the UK, and the USA.  It only applies to the DHL Global Mail service.  The DHL site says it applies to 23 countries, not the 4 that the eBay email restricts it to – looks like another “right hand / left hand” situation in the communications departments?

If the rates shown on the special partnership announcement page are in Thai Baht (there’s no currency symbol to clarify it), then they are far more competitive than I had previously thought.  Their rates being only around 25% more (after discount) that the regular Post Office equivalent Airmail service.  However, the terms are crippling (note particularly the maximum weight limit) -

Special Promotion of DHL Global Mail
Registered Airmail service

• You can track from original post from dispatch status and track from destination post for deliver status up to 23 countries such as Australia, UK, USA, Germany (weight > 300 g.), etc.
• Insurance for lost item at 40 USD/piece

Channel to use this special promotion of DHL Global Mail

Apply account number with DHL by

• Company account with company registration and VAT registration (Por Por 20)
• Personal account with Bank Guarantee at THB 100,000 and copy of ID card and House registration

You will receive credit term 7 days

Via DHL Reseller
If above method is not suit your need, you can use via our Authorized DHL Reseller without opening account with DHL and you can;

Pay by cash and receive pick up service at some specific area; Jatujak, Sathorn, Silom, Thonburi, Ramkhamhaeng, Pattanakan, Ladprao, Paholyothin

These are so typically Thai.  Note the personal account requirement to lodge a THB 100K bank guarantee (bonded deposit) – that means you have to deposit THB 100K (approx GBP 2,000) in a bank account, get a bonding letter from the bank, be unable to access that money for the duration of using DHL (and not receive interest on it) … and DHL will consider your application.

It actually becomes cheaper to form a limited liability company (total cost around THB 25,000 in the Thai system) using which there is no deposited bond, and, which will allow you to walk away from any debts incurred if they all get too much and your company becomes insolvent.   This style of thinking is the opposite of western business norms, where the personal applicant is welcomed with open arms due to being personally responsible for all debts incurred, and not having the umbrella of a limited company to shield them from repayment.

Also gripping me personally, in the announcement, is that all the collection zones are in Bangkok – there are none up-country or in the provinces.  Knowing Thailand, you can guarantee that using your local depot, requesting the 30% off plus home/office collection, will be met with a “one or the other” response.  Communication cascades are not the strong points of organisational ability out here.

Conclusion

Nice try eBay & DHL – but not good enough.  I’ll pass, and as per the trend this year, I’ll be reducing my use of eBay in the run-up to Christmas, and concentrating my effort on other, cheaper, seller-friendlier channels.

Gaz