News for Radio Show 11-12-2017

For Your Eyes only News Stories Ecommerce Enterprise Radio Show November 12, 2017 8:30 pm EDST 1

Etsy Survey Fuels Speculation about a Fee Hike Etsy sent a survey to sellers about fees changes, asking what type of fee increases would be more tolerable, a hike in listing fees or a hike in commission fees. In a discussion thread, a seller described the gist of the survey: \"A lot of what if scenarios, like if it was $0.20 for one listing fee per month & transaction fee was 3.5%, would you sell on Etsy? If it was $0.20 for 4 months & transaction fee was 5%, would you sell on Etsy?\" One seller discussing the survey pointed out that sellers could go to Am- azon Handmade if fees became too high on Etsy. \"The thing Etsy should consider and realize is that the fees on Amazon are preventing a (lot) of sellers from moving there from here. If Etsy increases fees and Amazon doesn't and advertises a ton for their sellers, people might be more likely to jump ship.\" The specter of Etsy raising fees had some sellers mulling their options, from a standalone store to Facebook, Shopify, and Amazon Handmade.2 To next page -------->>

Etsy has been growing revenue not only by growing sales (thereby tak- ing more in fees), but by offering what it refers to as seller services, in- cluding optional Promoted Listing ads sellers can buy to boost visibility. Another seller service benefiting Etsy's bottom line is the requirement that sellers offer Etsy Payments. As a result, Etsy's margin for the most recent quarter was the highest it's been since going public. In other words, sellers are paying Etsy more in fees without an increase in listing or commission fees thanks to seller services fees. 3

Amazon Key’s big privacy test is now in your hands This new delivery service lets itself into your home, and that has some people freaked out. Amazon, though, may have a way past that anxiety. Much of the public response to Amazon Key’s debut was merciless. People took to social media two weeks ago to critize the new in-home delivery ser- vice as an infringement of their privacy and a way for thieves or murderers to walk into their living rooms. “Better to strategize around postal schedules than be assaulted by a person hiding in one’s home!” the columnist wrote. However Amazon hopes to build and control a new spin on commerce. If the com- pany convinces enough customers to adopt Amazon Key, that could have a big im- pact on how people shop and use all kinds of professional services, including dog walkers, maid services and food delivery. Amazon Key uses the company’s new Cloud Cam security camera, a smart door lock and the new Key app to grant someone temporary access. A delivery person can unlock your front door using his phone, slide in a package, then lock the door again. The idea is to prevent packages from being stolen from the front stoop or have them get soaked in the rain.4 To next page -------->>

The service will launch in 37 US metro areas and is only available to Amazon Prime members. The new hardware starts at $250 and includes free installation. In the coming months, Amazon said it will let customers schedule in-home visits from tens of thousands of local businesses through Amazon Home Services, so you can schedule a cleaning service or plumber while you’re out. However there are lots of hurdles to Amazon Key getting adopted. Along with the upfront cost and hardware setup, customers will have to get used to the idea that Amazon delivery workers will have access to their homes. Also, there are loads of variables that get introduced once a delivery person can open your front door: What if my cat runs out the door? What if the door breaks during a delivery? What if a hacker gains access to my new smart lock or the lock fails? Most likely for all those reasons, 68 percent of US adults surveyed by Morning Con- sult in late October said they were uncomfortable giving delivery workers access to their homes. The older the respondents got, the more likely they were to dislike the service. However experts, say that convenience always trumps worries about security. They say once people get used to the idea, the benefits will overcome their worries. So we’ll have to watch this and see what happens. 5

EBay Removes Listings of Hawaii Beach Sand From Its Website HILO, Hawaii (AP) — eBay has removed multiple listings of sand said to be taken from Hawaii beaches. The Hawaii Tribune-Herald reported Saturday that it asked the company about the listings before they were taken down. Among them was a list- ing claiming to have sand from Papakolea Beach, also known as Green Sands Beach. It is illegal to take sand from Hawaii beaches. The law contains a limited number of exceptions that do not include personal or commercial sales. Fines for illegally collecting Hawaii sand can reach upward of $100,000. Ryan Moore, eBay director of global corporate affairs and communication at eBay, said the company took the listings down and notified sellers af- ter the newspaper reached out. Hawaii’s prohibition on taking sand from beaches dates to 2013. Before then, one person could take up to one gallon a day from the shoreline.6 To next page -------->>

However testimony to the Legislature pointed out that erosion, illegal sand mining and other factors were shrinking Hawaii’s beaches. The law exempts people who accidentally bring sand home in their clothes, toys and other belongings. “I think if (the sellers) purport that they’re selling sand from Hawaii beach- es, they’re doing it on eBay and it’s a violation of Hawaii law, then eBay does have a duty . to let them know that that’s not a legal sale,” Lawson said. Offers for the sand ranged from 2 milliliter vials for $3.50 to a pound for prices ranging from $4.50 to $14.95. 7

The Looming Chinese Guillotine For U.S. Ecom- merce Companies The author of this article says, that his company has been has been looking to buy an ecommerce business for the past last year. In the course of studying the busi- ness climate they came to the following conclusion: U.S. based ecommerce com- panies are going to see a lot of headwind in the coming years, and you better figure out how to defend yourself before the looming overseas guillotine falls. Here are the details of what I have learned, and the phases of ecommerce evolution that have enabled this situation. PHASE 1: ONLINE RETAILERS KILL OFFLINE RETAILERS After the first wave of ecommerce companies like eBay hit the market in the late 1990’s, it was clearly only a matter of time before the offline brick and mortar re- tailers would succumb to death’s grip. Gone are Blockbuster, Borders, Circuit City, CompUSA, Linens N Things and Sports Authority, etc. And as we know, this trend affects the big boys too, like Macy’s and WalMart too. PHASE 2: AMAZON REDEFINES ECOMMERCE MERCHANDISING Amazon quickly learned that there was a lot more product for sale than could pos- sible be designed and managed by one company.8 To next page -------->>

They realized their core strength was marketing to a huge base of consum- ers and doing warehousing and distribution in mass. So, what better to do than open up their platform to millions of product sellers, both large and small And what a move that turned out to be; today, it is estimated that 40-50% of all consumer product searches on the internet now begin at Amazon.com, not Google.com or eBay. We are now in … PHASE 3: COUNTERFEITS START TO KILL U.S. ONLINE RETAILERS Now, an ecommerce startup no longer needs expensive investments in peo- ple, systems, warehouses or marketing; they simply need to design a prod- uct (typically manufactured by an overseas partner) … or BE that overseas manufacturer … get the product over to an Amazon warehouse, let Amazon do their magic, and sit back and collect checks for doing hardly any work. Literally, two kids in a garage figure out best selling products on Amazon to knock off, from freely available Amazon sales data sources, and they gen- erate $2-$4MM in revenues ($500K-$1MM in profits) in a year or two after launching. 9

NEW EBAY RETURNS AND REFUNDS eBay launched new returns and refund practices, as we reported in News- flash today. A reader suggested we put this on the blog as well, which gets more comments, because they suspect sellers will have questions. The first is change is called “Automatic Acceptance of Returns,” which occurs when buyers have paid shipping costs. “If your policy requires the buyer to pay for return shipping in cases of buyer remorse, requests for returns are accepted automatically and we’ll provide the buyer with a return shipping label. This only occurs when you’re OK with a buyer paying to ship back an item they no longer want. “If you’re responsible for the cost of return shipping, you still have three busi- ness days to provide your own return label before one will be automatically sent to the buyer. This occurs if you offer free returns or if the buyer has an issue with an item. “No return requests are automatically accepted for items that have no re- turns.”10 To next page -------->>

The second is a partial refund option for free returns: “Sellers who offer free returns - free return shipping and no restocking fees - now have the option to give less than full refunds. You can deduct up to 50% of the item price if the returned item is damaged, missing parts, or otherwise not in the same condition as when you shipped it. “At eBay, we’re committed to partnering with you to provide excellent af- ter-sales customer service. And there are even more ways to ensure the returns process goes smoothly. Visit your return preferences to create rules to automate when you send immediate refunds.” Let us know what questions you have about these changes, which had previously been announced as part of the Fall Seller Update. Anything to worry you going into the holiday-shopping season? 11

A filmmaker’s attempt to sell his girlfriend’s used car by making a spoof ad sent online bids for the car soaring to thousands of dollars above its listed value. Max Lanman created the commercial to sell his girlfriend’s 1996 Honda Accord, nicknamed “Greenie,” that has more than 141,000 miles on it. He said, “I thought it would be hilarious to make a high-end car commercial for a really junky car,” Lanman told ABC News. “And she had just the car.” Lanman’s commercial features sweeping views of cliff-side roads that overlook an ocean but closeups show the car’s features, like a cassette player. A woman driving the car with a cat in her lap is also in the video. The voiceovers in the commercial have an aspirational tone but realistic words. “This is not a car, this is you,” the narrator says. “Introducing a used 1996 Hon- da Accord. A car for people who have life figured out and just need a way to get somewhere.” “Luxury is a state of mind,” according to the tagline of the video, which has more than 4 million views on YouTube.12 To next page -------->>

The value for the Honda is listed as $1,432 in Kelley Blue Book. Lanman listed the car on eBay for $499 and quickly saw bids soar well beyond that. “I mean we had the eBay bid up to $150,000,” said Lanman, who posted the commercial on YouTube on Nov. 2. EBay canceled Lanman’s listing “due to concerns around illegitimate bidding,” the company told ABC News. “We’ve since worked with Mr. Lanman to re-list the item and we’ve put addi- tional measures in place to ensure a successful auction,” eBay said in a state- ment. “Mr. Lanman is a talented filmmaker and we’re pleased that the eBay platform brought us together. We’re hoping to work on some creative video projects with him in the future.” Lanman’s listing is now back up and running with a current bid of $4,300. After making the commercial, Lanman and his girlfriend got engaged. “I don’t know if it made her fall deeply in love with me, but the process definite- ly tested our strength,” he said. 13

Alibaba Singles’ Day Sales Hit $8.6 Billion in First Hour Alibaba Group Holding Ltd. kicked off its annual Singles’ Day shop- ping bonanza, logging $8.6 billion in sales within the first hour. Shoppers from at least 192 countries and regions swarmed the e-com- merce giant to scoop up discounted lobster, iPhones and refrigerators, at a rate of as many as 256,000 transactions per second. The Chi- nese company hosted a star-studded gala enlisting tennis star Maria Sharapova and American rapper Pharrell Williams to pump sales. Analysts are expecting another record day on Alibaba’s platforms, predicting a 31 percent rise in transactions, compared to last year It dwarfs other events such as Black Friday and Cyber Monday. Nov. 11 emerged as a counter-cultural antidote to the sentimentality surrounding Valentine’s Day. It takes its name from the way the date is written numerically as 11/11, which resembles “bare branches,” a local expression for the unattached.14 To next page -------->>

Now, it’s become an excuse for people to shop and binge on enter- tainment shows. Rivalry With Amazon It’s early days in Alibaba’s grand retail experiment, but if it works, it could deepen a lead over Jeff Bezos’ Amazon.com Inc. in the frag- mented world of physical retail. Ma’s company spent billions buying into grocers, shopping malls and even department stores years be- fore Amazon announced its $13.7 billion acquisition of Whole Foods Market Inc. 15