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Chacham's Journal: Rant: On the general culture of nickle and diming. 12

Journal by Chacham

Nickle and diming. Is it worth it in the long run?

Ebay has gone crazy with their prices, literally nickle and diming wherever they can. I kind of like bold costing a dollar, as it keeps many away from ruining the listings. However, a "gallery" picture is twenty-five cents. Galleries help ebay, that should be free. Scheduling, reserves, buy it now, and many other options cost five or ten cents. It makes listing an item agitating, and i get the feeling that ebay is holding out a scrawny bony hand, waiting to grab my wallet. My pleasure in using ebay has gone down. Besides that, they don't seem to work well with Mozilla. I'd switch to another online service, but i don't think anyone else has the same visibility for the same market.

When i go to a restaurant, the prices are expensive. But then, when i want a drink, they usually want a dollar for a can of pop. I've always felt that the expensive price should be getting the person to commit. After that, the prices should be just enough to cover cost. Charge alot for the sandwhich, but charge cost (or something small) for the drink. Why? Because when i'm eating and enjoying my food, my satisfaction justifies the cost already spent. The past where i spent money is now behind me, and now enjoyment is the game. However, when i get thirtsy, i have to give an entire dollar for twelve ounces. And, if that isn't enough, i have to spend *another* dollar to get a second drink. That always makes me feel frustrated. It really ruins my experience in a restaraunt.

I think this is true by consumer electronics. The main item should be expensive, assuming it is good quality, but the accessories should be cheap. I bought a camera for a thousand dollars a few years ago (Nikon Coolpix 990), yet they want one hundred for the remote! That cheap piece of plastic with minor functionality. If i ever buy a new camera, i will definitely keep that in mind. But this is everywhere.

Am i alone in thinking that the upfront price should be higher, but the auxillaries should be cheaper? Do people not get marred by the experience of constantly paying outrageous sums? And yet, others don't seem to care. As if they have accepted it already as "that's the way it is".

Well, one thing's for sure, i drink more water now.

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Rant: On the general culture of nickle and diming.

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  • Look at PayPal if you want real nickel and diming. They charge a "foreign transaction fee" if two international customers inact a purely US$ transaction. There is no justification for this whatsoever -- it's one of the two reasons I folded up shop and left eBay (the other being the sheer amount of time it took to handle in the increasing number of arseholes on eBay).
  • by turg (19864) *
    Generally, I'm with you. But I can sorta see eBay's side too for the extras.

    Some things, like the bold listing, have to be expensive enough that most people don't use them -- otherwise there's no benefit to it.

    For the other things, at least eBay does have a practical basis for charging. When they introduce features like the gallery it's initially free. After they've studied it a while, they have a statistic like an item in the gallery sells for 20% more on average than the same item with just a regular li
    • by Chacham (981) *
      So at least there is a value proposition for it -- they can say it's worth paying for because they can show that you will make more money by using it. And that's what eBay's business model is all about -- you pay eBay money because they help you make even more money.

      But isn't it in their interest that the sellers sell more and thus they make more money? Charging for the gallery is like saying, "we're going to shoot ourselves in the foot, unless you pay us not too." Charging for an advanced listing is at l
      • by turg (19864) *

        So you seem to be expecting eBay to charge for the things that cost them money. What eBay does is charge for the things that make their customers money and this is the key to their business plan (and I think, the key to their success while the other .com's were going down the tubes). They charge me money for the things that have (clear, measurable) value to me and not for the things that don't. This part of the plan is absolutely brilliant. The details of how it's worked out, I would do quite differently. S

        • by turg (19864) *
          Forgot to include what I intended to write in response to your "Bingo!":

          But weren't you saying that you'd prefer even higher prices for the listing and lower prices for the extra?
          • by Chacham (981) *
            Yeah, but that would be like a restaurant charging the user for each napkin. Ebay is a bit different in that less charges *help* them. The only reason i can imagine for these charges is that some idiot figures it'll make them money. I'm willing to bet they lose money because of it. Any icncreases they have is due to their monopoly on the market.
        • by Chacham (981) *
          I still think it's a bad thing. At the end of the day, if you make a higher sale on ebay, Ebay gets more money.

          (Fees found here [ebay.com])

          Let's be exact (amounts in US dollars). Imagine i sell my old socks on ebay with a starting bid of 1, and then it sells for 10. Ebay recieves .3 for the insertion fee, and .52 for the 5.25% final value fee. That gives them a total of .82.

          Now, i didn't use a gallery because it would have cost me .25. According to Ebay (on the sellers fifth step) "Listings with Gallery sell for 11
  • but it doesn't mesh with the economics of doing business.

    First off, the food example: realize that restaurants usually fail, only entrenched franchises have over a 60% of survival when they open a location, for the rest of them, its closer to 20%. Why so low? Because margins are so low. Yes, the cost of that can of pop is only 20 cents or whatever, but then you have what all the employees get paid hourly to add up, rent, taxes, etc - it adds up to where most restaurants make only 4-8% of an items cost i
    • Thanx for the reply. Two comments.

      1) On the restaurant. Charge more for a sandwhich. Not a cover charge. But make the side dishes cheaper.

      2) As for the camera. Again, if they *really* need to charge that much for the remote, charge fifty dollars more for the camera. If the expense of the camera limits the purchases, a little more expense won't hurt. At least with that attitude, people will feel better. Without that attitude, even insignificant items costs ridiculous amounts.

      • From what I understand, the soda you're paying $1 or even $2.50 for at the resaurant costs them literally pennies. Washing the glass costs more than serving soft drinks on tap. The labor to bring you the soft drink costs more.

        But labor costs being what they are, either they will charge more for their food (which some people actually compare prices for similar sandwiches) and drive off their customers, or they will charge more for their sodas (which is less obvious until you get your bill).

        It's just the wa
        • The drink, if from tap, probably costs them ten to twenty cents. (A BIB of five pounds costs about $45, and the ratio of water to pre-mix syrup is generally 5 to 1.)

          either they will charge more for their food (which some people actually compare prices for similar sandwiches) and drive off their customers

          So, the other customers are so stupid that they will save money on the sandwich but lose on the drinks? The customers will not realize how they can order a second drink for next to nothing? That second d

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