MEDIA & MARKETING:Rents are rising steeply for vendors using eBay as their shop window on the internet, writes Siobhan O'Connell
THE ONLINE marketplace eBay has been one of the great internet success stories. When it was founded in 1995 by the computer programmer Pierre Omidyar, eBay only facilitated auction transactions but later the site also became a fixed price marketplace.
In Ireland, eBay.ie was launched in 2005 and the site claims 500,000 registered users. Thousands of individuals use eBay to sell items but hundreds of sole traders also use eBay as a virtual shop window to the world.
Most of eBay's growth now comes from fixed price sales rather than auctions and the site is home to thousands of virtual shops.
An eBay shop is a customised selling space where vendors can display their items for sale. For traders, the attraction is that when a purchaser clicks through to their shop for a particular item, they also see other items being sold by the vendor.
This week eBay has revised its shop format. As in the real world, the effect is to raise the rent for vendors using eBay, though the company says that signing up for the Basic Shop means insertion fees for listings will be 60 per cent lower than if a trader doesn't have a shop. An additional carrot is that items selling through an eBay shop will now be visible in main search results.
Revenues are generated by charging eBay users to list their items for sale and then taking a slice of the sale price. If you don't have a shop, it costs 50 cent to list an item. If you pay a subscription fee of €20 per month for a basic shop with five web pages, the per item listing cost reduces to 20c.
Stump up €60 per month and you can open a Featured Shop (10 web pages) and a listing cost of 6c per item.
The top price level is €450 per month for an Anchor Shop (15 web pages), where the per item listing price is 2c. The rental costs are substantially higher than the previous pricing.
According to Áine Murphy, eBay.ie's business development manager, the revised monthly fee for featured and anchor shops entitles vendors to access to telephone support and marketing tools. "The change to visibility of shop items means vendors will be more likely to sell from their listings," she added.
The sales and marketing aids include marketing e-mails, flyers, shop-branded templates and the ability to publish product data direct to customers and shopping comparison sites.
Murphy added: "One of the advantages of subscribing to an eBay shop is to do with key word optimisation. If you pay enough attention to the key words in your shop or item description, they will be picked up by search engines like Google because eBay spends heavily purchasing key words on behalf of its users.
"Vendors selling items on eBay outside of the shops can make sure their items are picked up in Google by looking at the key words used in the shop windows by other successful sellers and using those same words."
The higher fees have received a mixed reaction from vendors, unhappy at having to pay more for their rent when the company's profit margin runs to 25 per cent. For shop owners, the dilemma is simple: pay more to eBay or go it alone and try buying prominence on Google. Either way, the marketing overhead in cyberspace is going up all the time.
Do you really need to market something that gets acres of free publicity? The Football Association of Ireland isn't taking any chances with its premium ticket scheme for the new Lansdowne Road stadium. When the FAI's Vantage Club was unveiled last week, the scheme was covered in great deal in every newspaper.
But awareness is one thing and persuading football fans to part with between €12,000 and €32,000 for a 10-year ticket is something else entirely.
With potential tickets sales of €190 million to be garnered, the association has a marketing budget of €1 million to sell the premium seats. The spend is going on press, radio, TV and direct marketing.
In the week before the launch, 3,000 individuals who had expressed interest in buying a ticket received a sales pitch from the FAI.
A call centre with 19 telesales staff has been set up to handle inquiries.
siobhan@businessplus.ie
