eBay Seller Coupon Programme

[5216elisabeth]

Hi

I am just wondering if anyone who has joined this programme would be willing to share their experience of it with me please?  Good or bad.  I'm wondering in particular whether you have found it to be cost-effective or costly, and if it increased sales.  I don't do promotions but I am considering whether to try this. 

[pegr-834437]

It increases sales but the advertising/promotion behind it is appalling. They could improve it so much but I just get told maybe they don't want the promotions to bring in too many sales, how eBay makes this make sense is beyond me but that's what I've been told. 

They are normally ran in 3 month groupings and if you wish you could run a promo for around 25 days of each month, ranging from 10-20% and I'm sure they are all 60% self funded. Whilst they do work accepting them all seems like a crazy move unless your margins are huge on your items.

[5216elisabeth]

Thank you.  Do you know if a seller can choose to exclude specific items e.g the ones with thinner margins?

[pegr-834437]

99% are store wide, very rarely you will get one where you select but its normally just store wide, which again is a bit of a killer. Its the lack of advertising or highlighting there is a promo on thats the worst thing, if you are taking such a hit you'd expect eBay to promote it to the hills but its badly done.

[5216elisabeth]

That's really helpful, thank you.  I was a bit concerned that it might be across the whole shop.  I'm still a very small business trying to grow so I have to be pretty careful with discounting.  I suppose I could make sure the only items available for sale had big enough margins to stand it.   Food for thought.

[pegr-834437]

I guess you could just take down anything you didnt want in the promo but you'd then be having to put up and down half your listings for half of the month, losing any sort of positioning that they have created. I'll be totally honest and it obviously depends on the items you sell but a sale fully funded by yourself at 15% over eBay coupon funded at 20% (you will fund 12%) of it seems to bring in more sales as the discounted price is shown when the item appears in a search, unlike for the eBay code, the buyer needs to click onto the item and then see the code is available. 

[5216elisabeth]

Thank you for that useful comparison of those two alternatives.  I did have a look at how to do a sale a few months ago but I haven't tried it yet.  I tend to just send offers to watchers.  The vast majority of my stock is currently Christmas so running an 'early bird' sale on some items might be the best option for now.  It seemed to be picking up nicely the last week or so but has gone a bit quiet now.

[pegr-834437]

I have no idea on your market but just from looking from the outside I'd have said a sale markdown would be the route I'd take, you will know when the market picks up so a sale to try and get it a week earlier and the early birds would probably work. Also if you do it yourself you can set different percentages off. Have you ever thought of just doing your own coupon? I imagine if somebody is buying Christmas deco they may get it like it and think o I'll buy my mam or daughter/son one of these, a 10% return customer might work out really well. Obviously you have to fund it all yourself but it encourages returning customers who then might even buy more.

[misterowl1963]

Only used it once - totally killed my regular sales never again - Basically sold nothing for 4 days strangled everything  - Just use your own marketing coupon to send to previous buyers I find that works best for me personally. 

[5216elisabeth]

That is really, really helpful, thank you very much.  I will have a look at setting a sale up over the next few days and investigate how to do a return customer coupon too.  I did have a quick look at coupons a while ago but didn't do one. I have more margin on some items than others so being able to set different discount rates would suit me very well. 

[5216elisabeth]

Thank you for your reply.  That's really helpful, I was a bit concerned about the possible unforeseen side-effects.  I will have a look a look into doing my own coupon and what the options are for sending them to previous buyers.  I have already had a couple of buyers return from last Christmas season so I might be able to encourage a few more back that way.  

[eyewear247]

I’ve been taking part in eBay’s coupon campaigns for 18 months now—mainly the 10% offers, with the occasional 15%. In that time, I’ve probably joined around 30 campaigns. While I have seen a modest increase in sales, the impact has never been huge.

From the very beginning, I raised questions about the VAT implications. Here’s how it works in practice:

• When an item sells, you initially receive 100% of the listed price and account for VAT on that full amount in the usual way.

• Around 90 days later, eBay invoices you for your share (60%) of the discount that was given to the buyer.

When I asked eBay about the VAT treatment, they couldn’t give me an answer and advised me to “speak to a qualified tax expert” (which felt like a bit of a cop-out).

I had assumed that when eBay billed me for my share of the discount, I would be able to offset the VAT—so the VAT I reclaimed would reconcile with the VAT I had already accounted for on the original 100% sale price.

However, after digging deeper into my transaction fees and a recent eBay invoice relating to a coupon promotion, I noticed that the invoice clearly states “Not subject to VAT.”

To summarise:

1. eBay charges the full final value fee (FVF) on 100% of the item price.

2. If you’re VAT-registered, you also have to account for VAT on 100% of the full item price that was initally received.

3. eBay then invoices you some weeks later for your share (60%) of the voucher discount—but that charge is not subject to VAT.

In effect:

• A 10% voucher ends up costing me around 6%.

• A 15% voucher costs me around 9%.
  Once you factor in the FVF on the full price and the VAT on the same, the real discount I’m giving away is higher than it first appears.

So ultimately, whether this is worth it or not depends entirely on your margins. But don’t assume it will only cost you 60% of the voucher discount.

I’ll admit I didn’t do full due diligence at the start. I now need to check with my accountant: since eBay’s invoice for the coupon discount is marked “Not subject to VAT,” yet I already accounted for VAT on the non-discounted sale price, can I treat this in the same way as I would a customer refund and reclaim the VAT?

Either way, it’s proving to be a very messy situation and all things considered the current "CRISP15" coupon will be my last.

[eyewear247]

It is also worth pointing out - eBay do not inform you which sales the coupon / voucher was used on, they only give you the total sales value at the end of the campaign and what your share of the discount will be invoice for later. 

[tribalgiftsuk]

I tried it for a while and found that the promotions were usually over the pay day weekend, when you want your items to sell for full price 😁 As others have mentioned you cant tell which sales were with the coupon and the cost (your share of the discount) is deducted from your account about 2 - 3 months later.

These coupons would be better applied mid month than end/start month. Also sometimes i had mark down sales or other promotions on at the same time and then some customers benefitted from a double whammy of discounts that i didnt bargain for! 

So make sure you dont have any other promo's running.

[5216elisabeth]

Thank you for your suggestion about sale markdowns.  I gave it a try over a couple of weeks and it did seem to bring a few sales in - one of them was my biggest ever too 🙂 I may give the return customer coupon a try this month if things don't pick up a bit more.  I do sometimes have buyers come back to buy a second item or one for family/friend so it could work.