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If you sell digital products on ebay and haven’t heard the news - make sure you are sitting down.

Ebay, in their infinite wisdom, will not allow you to sell any digital product in an auction, or in a buy it now listing starting on March 31st. That includes any digital products in your eBay store.

Some of those digital items include:
Ebooks
Domain names
Websites
Graphics
Ebay auction templates
Digital Photos
Digital Embrodery
Digital Patterns
Digital Software
Spreadsheets
Powerpoint, Excel & Word Templates
Advertising
Audio books
Digital music downloads
Digital Service Manuals — cars, machines, etc
Digital Delivered Business cards
Machine Building Blueprints
Architectural designs

You can still advertise your digital products on eBay, you will just have to use their classified ad system. More on that later.

So, as a person who sells digital products on eBay, I have a few things to say about this!

1. eBay’s Communication Method
If you are an eBay seller and are just now hearing about this, I’m not surprised. After reading a number of forums talking about this change, most seem to have found out when trying to list a digital product, or like me, found out about it by accident when browsing a forum.

This is a major eBay change and they could not email their sellers about this? Most of us have found out by accident.

According to what I have read from others who contacted eBay support, many of their support people didn’t even know about it! What? Are you kidding me.

I worked in a support organization before, and when you make major changes like this, you train your support people on the reasoning behind the change. You give them drafted statements to use to deflect some of the frustration your customers will surely have. You want your interface to the public to represent you well. I feel sorry for those support people.

2. eBay’s Reasoning Behind the Change
According to eBay the change is necessary “To preserve the integrity of the Feedback system”. Apparently eBay feels that people selling .01 or .99 products were doing so only to gather feedback. I’m sure this is true to some extent, but so what?

I have sold some .99 ebooks, not to get feedback but to distribute ebooks and reports with my affiliate links in them, and to gather leads on my About Me page. Is that so bad?

I have also sold higher end digital products of my own, and customers where able to sometimes get them at a lower price. Again, is that so bad?

I have worked hard to keep my 400+ feedback 100% positive by offering refunds if necessary and communication with customers in a timely fashion.

I believe feedback manipulation is not a big problem and if people are feeling the need to do it, it’s because of eBay’s feedback policy.

3. eBay’s Disregard for Their Sellers
Is eBay so big and powerful that they think they can make whatever changes they want with out a cost? This eBay change shows a total disregard for a large portion of their sellers.

Sellers who followed all the rules and made eBay some good money, are now screwed. On eBay’s forum I have read about power sellers who have worked their tails off for years to build a full time income - now, they are out of business.

Put out of business with no notification from eBay, and with only a week to modify their business plans to somehow generate that full time income again. Wow, at least companies who lay people off usually give them some warning and some sort of severance package.

eBay has little regard for a large portion of the customers they make money off of. And, sellers have no recourse. We have no one to complain to that will listen. eBay makes a change and that’s it - live with it or leave.

4. The Cost to eBay
I think this was a short sighted decision and will eventually cost eBay. I have cancelled my Seller Manager account, will be cancelling my Store and of course will not be listing digital products again. If there are thousands of digital product sellers on eBay no longer able to post listings and have stores, surely this will hurt the eBay bottom line.

eBay may think they will make up that income with digital product sellers moving to the classified ad system with the minimum ad cost of $9.95. Some will make that move, and some will quit using eBay altogether. If the classified ad system doesn’t work for sellers, they will start leaving in droves.

And, what about the cost to eBay in reputation? They are taking a beating right now, but I’m sure the huge corporation will survive.

5. Ways Around the Change
Online sellers are a pretty resourceful group, and have ways of adapting to significant changes. I have seen discussions on other boards about possible work arounds.

The most popular possible option, is to sell your digital products on CD/DVD as a physical product in an auction or BIN. Ship the product to the customer and at the same time send them a link for immediate download.

As a customer, when I buy a digital product online I want to download it now. I do not want to wait for the product in snail mail. So, if you can offer a download also, this may work.

But, I don’t want to be in the fulfillment business. I don’t want to do packaging, and mailing - that’s why I sell digital products.

I know there are fulfillment houses that can do CD/DVD product fulfillment and shipping, but at what cost? Do I want to pay eBay fees, Paypal fees and fulfillment fees? Oh, I could pass those fees on to the customer by raising my product prices and that would probably reduce my sales and profits.

6. Using eBay Classifieds Could Be a Good Thing
I’ve seen the eternal optimists state that this could be a good thing. It will get rid of those scoundrels selling junk .01 ebooks and reduce the competition.

This is true, I’m sure it will reduce competition because of what sellers will have to do to make classified ads work.

With eBay classified ads, you can link to an external website. So, here is what you’ll have to do.

You’ll have to create classifieds pointing to your digital product web pages that you have created on your web host.

You can create lead capture forms on those pages, setup all the payment processing, download pages etc.

Okay, no problem - You will be using standard internet marketing techniques and you will have control over everything. So, why should you use ebay classified ads? Why should you pay ebay when you can use free marketing techniques.

If the ebay classifieds are great traffic generators then they may be worth using. But as more and more ebay digital product sellers move to classifieds, I suspect they will become less effective.

7. How Will You Use Classifieds?
If I can use one classified ad at $9.95 a month for 30 days, that’s great!

But, let’s say you have 30 digital products, how do you use classifieds for all 30?

I don’t think one ad will work. Lets say you sell 30 digital products, from dog training ebooks, to stop smoking ebooks to software.

How do you get all that in one ad? If you put it all in one ad, do you send them to one page that lists all your products?

This is not a good marketing technique because you leave the customer with too many choices and it will be hard to target your classifieds to specific products.

Do you have a separate ad for each segment - get dog related ebooks here, 10 awesome software scripts here. Let’s say you have 30 products in 6 segments, that’s almost $60 per month minimum (with nothing to make your ads stand out). And, your classified ad may never be seen, your ads will spend most of the month at the bottom of the listings. eBay 3 day, 7 day and 10 day listings will be on top. So you may never make a sale, but you will be charged anyway.

Maybe you should create a classified ad for each product. This would be the best option, but it would cost you almost $300 minimum a month for 30 products.

Conclusion
As someone who has bought digital products on ebay, I will miss trying to find digital product bargains. With this change there is really no reason for me to look for digital products on eBay any longer. So, I won’t be seeing your classified ad

There are some who are trying to put a positive spin on this change. I’m trying to find a positive spin, but I don’t see anything good out of it.

I guess I should see it as an opportunity to create a high priced product to teach you how to beat the competition using eBay classified ads. And to sell it on eBay as a classified ad

You will see a ton of this type of product soon, beware of the magic pill, the secret eBay Classified Ad Formula, because it doesn’t exist.

I believe that eBay classifieds may work for a while, but it will be used by so many digital product sellers that it will eventually lose its value altogether.

I suggest you do some testing with eBay classifieds to see how they work for you. I have seen some claim good success, while others had no success.

I tested eBay classifieds when they first came out, and my results were bad - not one sale. I’ve had much better results with auctions and BIN.

The biggest thing eBay sellers should take away from this, is to really consider whether your business success should be dependent on eBay when they can change their policies on a whim, and as a seller you have no recourse.

P.S. I see I have some links in this blog pointing to my eBay store and I have an eBay digital product listed here. Guess I need to get rid of those

Mike