A Conversation About Seller's Fees

[StereoNET]

As many of the long-term members here would know, it was suggested for a long time by the members themselves that there should be a payment to use the Classifieds. I always and quite vocally opposed that, and we went nearly 20 years before we had no choice. Initially, we used a donation 'plugin' for our forum software (which was labelled 'Donations' specifically, and couldn't be modified). However, today, in most parts of the site, the more accurate term "Seller's Fees" is used to describe this payment.

 

The voluntary seller's fees system initially functioned well. However, as the website expanded and gained more members, fewer users made these payments. Unfortunately, it became evident that frequent sellers in the classifieds were not paying any fees, creating an unfair advantage over those who did contribute to this platform. 

 

Our website's costs have increased due to its growth and the improvements we've made in functionality, capacity, and security. Over the past three years, we have outsourced various services, like image storage, firewalls, CDNs, and email service providers, leading to higher expenses. We've also invested in server resources, compliance, redundancy, and frequent backups. Our strong security measures, which could be compared to banking grade, ensure the safety of our members and their data amidst the ongoing threat of cyberattacks. We believe these costs are essential for maintaining a high-quality, secure platform.

 

All of the above is an investment back into the business, and it comes with a high cost. 

 

The forums are a core and essential part of StereoNET - however, the classifieds require the most labour. As you know, we check and approve every new member and, of course, every single advertisement before it is made public. Even the ability to do that required a lot of custom coding in the backend to check for and determine the use of VPNs, as well as cookie checks and several other indicators to give us the ability to determine the authenticity of a user. We also now offer ticketed support, look into complaints and transactions, and assist in resolving those. 

 

I faced a tough decision: either remove the classifieds, reducing labour and expenses while keeping the forum for discussions only, or improve the classifieds and generate an adequate level of revenue to support their costs. Recognising the value of our classifieds and their unique position in Australia, as well as the prevalence of scammers on other platforms like Gumtree and eBay, I chose the second option.

 

We anticipated resistance when transitioning from a voluntary to a compulsory payment system. Well over a year ago now, we introduced a mandatory 4% fee based on the selling price, which still relied on trust and honesty. This rate was determined after researching fees on similar sales platforms like eBay and Audiogon. When accounting for all sale-related fees, our site is more affordable than those alternatives.

 

We took feedback regarding these initial fees for higher-priced items into account and then introduced a Seller's Fees calculator on the payment page, with a sliding scale ranging from 2% for items over $50,000 to 4% for the lowest-priced items. The Classifieds Guidelines suggest incorporating these fees into the advertised price. This change was well-received by frequent sellers of higher-priced items based on the feedback we obtained.

 

The implementation of mandatory Seller's Fees has been effective for the most part, enabling further development of site features and the classifieds section, while also helping to offset some of the costs associated with providing this service.

 

However, it's concerning that we've become aware some members intentionally list items on both StereoNET and Gumtree to avoid paying Seller's Fees. There has been a noticeable rise in ads marked 'Sold Elsewhere.' When contacted through StereoNET, some members redirect buyers to their Gumtree ad and later claim the item was 'sold elsewhere'. Thankfully, many loyal members report any wrongdoing they observe, and some buyers even inform us when a seller fails to report their ad as Sold.

 

As it's difficult to enforce ongoing compliance, we may need to consider alternative approaches. One possibility is requiring ads to be exclusive on our platform, eliminating the 'Sold Elsewhere' argument. However, this doesn't sit well with me. Another option is a "pay to list" model, with lower but upfront fees based on the advertised price before ad approval. I prefer not to introduce either of these options, so we'll maintain the current model for now, and remove access to the Classifieds for those who engage in such practices.

 

It's unfortunate that a few individuals can spoil the experience for many, but it's not unusual for some people to try to exploit the system based on their nature. It's unfair to those doing the right thing - and in particular, it's not right when some people are not making any payment whatsoever. Some of those in question are not contributing anything to the community whatsoever and are here only for the classifieds and their benefit (flipping, in some cases).

 

I won't apologise for building a successful business or making necessary decisions for its growth and prosperity. I can handle criticism, whether justified or not. Membership here is free and voluntary, but we do ask those who join and use our resources to follow the rules and guidelines and act responsibly.

 

As always, I'm open to your ideas on ensuring the sustainability of our unique Classifieds service. We appreciate our members' input, and your thoughts on this matter provide valuable insights to help us navigate the path forwards.

[franky995]

Hi Marc, thanks for sharing your thoughts on this! In order to ensure fairness to all members who pay their fees I think a fixed listing fee and free relisting would be a good idea. This could be a smaller amount since admin involved for each item would be the same no matter selling price. Then everyone wins - the forum receives fees for every listing and the fees will be smaller so members win too. Resources are then also not consumed by admins trying to police the payment of fees which again increases costs.

Edited April 20, 2023 by franky995

[BugPowderDust]

@Marc the Classifieds here are surely a honey pot that brought many of us here in the first place.

 

Many of us have received great discounts and bargains on used or demo gear through the Classifieds and it's something that I look at many times each day in case something unbelievable comes up. It is also how I learn about a lot of esoteric gear I've never heard of before, so beyond a marketplace it is also a great source of information.

 

I find it sad that some on here are abusing the system to financially gain, when the platform that provides them that opportunity is neglected. I know there are a lot of semi-commercial seeming audiophiles who seem to move a lot of gear on here and I hope that they are supporting this site with their fees.

 

"Money makes people desperate" is a long-held belief in this house, but it shouldn't make you neglect the hard work others have done that enable you to profit / transact.   I'm very supportive of restricting access to classifieds for people found to breach these rules.  

[Andythiing]

Marc would a hybrid model of some sort be possible - small listing fee (just some hurt money) then a sliding scale in reverse - ie big ticket items start to pay a % from a point up - you get regular income from every listing then a more substantive contribution say above a set limit ($500 up??)

 

alternatively if the problem is with flippers who abuse the site why not limit free adds to say 5 per year - anyone wanting to do more has to register as a semi commercial member and pay fees jump a few hurdles (abn?/extra identity check) but also get some better service 

 

I realise all this adds complexity and therefore cost but if it needs to become more commercial a longer term sustainable model might be of benefit and be attractive to you and genuine sellers? 
 

I do hope most members wound respect your commercial interest and report those who try and dodge fees - I also think a more commercial model would help everyone avoid the shonkies that stick their head up from time to time flogging cables or dodgy speakers etc 

[lycos]

Hi Marc, I like pay to list model.

 

It doesnt make sense to have Seller fee as percentage of the item.

Comparing it to Paypal/ebay is not apple-to-apple. They provide kinda insurance to protect buyer (and seller) so it makes sense for them to charge more as price increases - as an insurance.

 

But SNA does not offer that insurance protection.

instead it provides platform for people to list. The amount of work if the item is $100k and $1 remain the same for SNA. 
 

Therefore, having a cheaper listing fee makes more sense.

[metal beat]

Personal I think the 4% sellers fee should stay.

  However the maximum sellers fee should be maybe $150.

 

 It takes SNA the same resources to process a $500 classified ad as it does a 50k ad.

 

  I feel nobody will be cheating the system with these rules.

 

BMW   - I am not a seller but ultimately any fees are born by the buyer.

 

  Flame away 

[Bengineer]

Pay to list is the only model that will work without going resource / employee heavy.

 

Calculate how much money you need to run the place per month, divide by average listings per month, propose to the community the listing fee required?

[LongSong]

Pay to list, sliding scale price based on listing price, leave the listing open for longer and allow the seller to adjust the price downwards (but not upwards as that would allow the seller to game the listing fee). Auto remove listings after say 6 months?? if they haven't been marked as sold.

[Guest]

Thanks all for your very reasonable suggestions and considered thoughts so far.

There are some good suggestions in there, and some I genuinely had not considered to date.

 

I think the below idea has some merit and only involves a small tweak to our code in the calculator.

 

  On 20/04/2023 at 5:11 AM, metal beat said:

Personal I think the 4% sellers fee should stay.

However the maximum sellers fee should be maybe $150.

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It still leaves the issue of those that will continue to find ways to circumvent paying Seller's Fees here, though. 

I guess there are two separate but related issues here.

[zenikoy]

Can you see data on the user's post count (community interaction) against likelihood of reporting as 'Sold Elsewhere'? If there is a correlation, maybe an upfront fee applies to users with <x posts.

 

I'd just like to give my anecdotal experience of listing with SNA and Gumtree in Perth 2019 when I was clearing a lot of items before relocating overseas. I would list items on SNA first to give the community first dibs on what I considered some good pricing. Plenty of positive commentary, but I think I only sold one sub $100 item. After a week or so I would also list on Gumtree for +10%. I then easily sold via Gumtree, to people people who seemed to have SNA knowledge of the item, ie list price, info from comments. A couple of these items have reappeared in the SNA classifieds in the interim. It seemed to me that Gumtree was being used by SNA members to buy anonymously, whether to lowball or other reasons. At the time I marked as 'Sold Elsewhere' genuinely, only afterwards did the situation start to appear a little odd to me. In short, I would be believe that items are genuinely being 'Sold Elsewhere', but with a silent SNA assist.

[barbz127]

  On 20/04/2023 at 6:35 AM, Marc said:

It still leaves the issue of those that will continue to find ways to circumvent paying Seller's Fees here, though. 

I guess there are two separate but related issues here.

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How about blocking these members from the classified section where you have clear evidence that they aren't paying up.

 

I commonly list on here as well as Gumtree and Aussie audio Mart, to me it's about reaching a wider audience especially at the moment as items don't appear to be moving as quick as usual but again that could be linked back to start core problem here.

 

[Guest]

  On 20/04/2023 at 6:39 AM, zenikoy said:

I'd just like to give my anecdotal experience of listing with SNA and Gumtree in Perth 2019 when I was clearing a lot of items before relocating overseas. I would list items on SNA first to give the community first dibs on what I considered some good pricing. Plenty of positive commentary, but I think I only sold one sub $100 item. After a week or so I would also list on Gumtree for +10%. I then easily sold via Gumtree, to people people who seemed to have SNA knowledge of the item, ie list price, info from comments. A couple of these items have reappeared in the SNA classifieds in the interim. It seemed to me that Gumtree was being used by SNA members to buy anonymously, whether to lowball or other reasons. At the time I marked as 'Sold Elsewhere' genuinely, only afterwards did the situation start to appear a little odd to me. In short, I would be believe that items are genuinely being 'Sold Elsewhere', but with a silent SNA assist.

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I had a similar experience where I listed an item a number of times here - after believing I had exhausted chances of selling to a StereoNET member - for reasons similar to yours, I then posted to Gumtree at a higher price. I got a lead right away, and we took it to a phone call. He was very familiar with my (lower) asking price on SN (even though it had been some weeks since the ad expired), and then proceeded to tell me he'd rather buy via Gumtree so I could sell to them at my SN-price, less the Seller's Fees! Needless to say, I still have the item I was selling.

 

I have no doubt there are genuine "Sold Elsewhere" cases - and I have no issue with that. But I have had an increasing amount of "tip offs" recently where this was a deliberate act to list simultaneously and then direct interested parties to contact them via the "same ad" on Gumtree instead. StereoNET is just being used for "lead generation" in those cases.

 

In one case - the buyer and seller gave each other Trader Feedback here - but the seller (who refused to pay Seller's Fees) insisted that the transaction took place on Gumtree because the buyer continued the conversation there.

[Guest]

  On 20/04/2023 at 6:47 AM, barbz127 said:

How about blocking these members from the classified section where you have clear evidence that they aren't paying up.

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That is absolutely the plan and has happened in one case already where the seller clearly didn't notice it was the "administrator" enquiring about purchasing. Others, who have just flatly refused to pay Seller's Fees upon a successful sale have also had their classifieds access removed. "I didn't know it was compulsory" is no longer a valid excuse - it's been compulsory for over a year now, and I believe it is very clear when you place an ad. Those members are unable to create new advertisements unless they bring their account back into good standing. Where they have then registered another account, the duplicate account has been banned. 

[metal beat]

  On 20/04/2023 at 6:35 AM, Marc said:

Thanks all for your very reasonable suggestions and considered thoughts so far.

There are some good suggestions in there, and some I genuinely had not considered to date.

 

I think the below idea has some merit and only involves a small tweak to our code in the calculator.

 

 

It still leaves the issue of those that will continue to find ways to circumvent paying Seller's Fees here, though. 

I guess there are two separate but related issues here.

Expand  

 

I think you are always going to have a percentage (hopefully small) looking at doing this, but paying fees of up to $150 or $100 is a pretty fair fee to pay in overall terms.

Edited April 20, 2023 by metal beat

[thejt]

Have you ever considered a small annual fee for access to the classifieds (buy and sell) while the rest of the forum remains free? I get more entertainment out of the classifieds than Netflix! A small and reasonable amount is fair I think. It is not different to say a Patreon to support channels on youtube. 

[Guest]

  On 20/04/2023 at 7:04 AM, thejt said:

Have you ever considered a small annual fee for access to the classifieds (buy and sell) while the rest of the forum remains free? I get more entertainment out of the classifieds than Netflix! A small and reasonable amount is fair I think. It is not different to say a Patreon to support channels on youtube. 

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Yes, thanks @thejt - it was one of the ideas considered early on, and a model which I used for many years on another site I used to own. In fact, it's what our commercial members do here now. It has pros and cons, the pros being there are none of the problems mentioned here, of course. How do you price it, though for personal users?

Part of the same consideration was also for those purchasing a "subscription" to confirm their identity too, so that these "Verified Sellers" could be considered trustworthy and genuine. It was more in consideration when the scammers infiltrated our community - but we appear to have weeded them out and jump on them pretty quickly when they attempt to get into our system now.

 

Keep the ideas coming, please. It's great to get different perspectives and thought provoking input.

[thejt]

  On 20/04/2023 at 7:08 AM, Marc said:

 

Yes, thanks @thejt - it was one of the ideas considered early on, and a model which I used for many years on another site I used to own. In fact, it's what our commercial members do here now. It has pros and cons, the pros being there are none of the problems mentioned here, of course. How do you price it, though for personal users?

Part of the same consideration was also for those purchasing a "subscription" to confirm their identity too, so that these "Verified Sellers" could be considered trustworthy and genuine. It was more in consideration when the scammers infiltrated our community - but we appear to have weeded them out and jump on them pretty quickly when they attempt to get into our system now.

 

Keep the ideas coming, please. It's great to get different perspectives and thought provoking input.

Expand  

 

Could possibly be tiered for people who:

1) buy only

2) sell small amounts (5 listings a month)

3) sell lots (>5 listings a month)

 

Hopefully combined with the sellers fees that can keep things going. In the absence of formal subs is to accept one off donations and also auctions or raffles to generate support. 

 

I will say though say I am not a fan of pay to list. This would only result in fewer listings and less interest overall I think. Many items also need to be listed multiple times before they sell or never sell. 

Edited April 20, 2023 by thejt

[rantan]

 

I have thought for a long time that there should be an annual subscription for access classifieds listings and a 4% sale fee only for those who sell gear frequently and who do not otherwise contribute much (if anything ) to the community in general.

 

Other members who may never list anything for sale, or those who only sell very occasionally, could perhaps have a maximum of two listings per calendar year without needing to pay a subscription and who would just pay 3% of the sale price up to a limit of $150. The reason behind this is that this group of people do not greatly increase the workload of those involved in the administration of the classified forum.

 

There should also be a requirement for people who have listed on other platforms to mention this in their SNA listing.

 

[Guest]

  On 20/04/2023 at 7:40 AM, rantan said:

There should also be a requirement for people who have listed on other platforms to mention this in their SNA listing.

 

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Wouldn't that be abused and used as a way to encourage buyers to contact them on another platform?

[psychometrics1]

I think I was the second highest donor when the system changed (maybe $1400 donated after sales) so good for others to also pay. Apart from ‘selling elsewhere’ allowing ads to expire without marking sold is another issue that may suggest a hybrid listing and post sale cap may be more robust. 

[rantan]

  On 20/04/2023 at 7:41 AM, Marc said:

Wouldn't that be abused and used as a way to encourage buyers to contact them on another platform?

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You are very likely to be correct on that statement, but I don't think there is any perfect or bulletproof way of preventing it.

I think we still need to work on the assumption that there will always be the 1-2% of people, to whom a small amount of money is more important than ethics and decent behaviour on a community platform from which we all benefit.

However if this is marked as a requirement for listing then I feel that the vast majority would likely comply, especially if the SNA listing price was much lower than the "Gumtree" listing price.

[ray4410]

  On 20/04/2023 at 7:43 AM, psychometrics1 said:

I think I was the second highest donor when the system changed (maybe $1400 donated after sales) so good for others to also pay. Apart from ‘selling elsewhere’ allowing ads to expire without marking sold is another issue that may suggest a hybrid listing and post sale cap may be more robust. 

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i remember way back that what was then called a donation that the $ amount a member donated was listed in the members profile and added to with each additional contribution. 

[Guest]

  On 20/04/2023 at 7:55 AM, ray4410 said:

i remember way back that what was then called a donation that the $ amount a member donated was listed in the members profile and added to with each additional contribution. 

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This information is still displayed (though now appropriately titled Seller's Fees) but is only visible to Admin/Volunteers - which I believe is fair given it's not voluntary any more.

[Guest]

  On 20/04/2023 at 7:52 AM, rantan said:

I think we still need to work on the assumption that there will always be the 1-2% of people, to whom a small amount of money is more important than ethics and decent behaviour on a community platform from which we all benefit.

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I think this is one of the key takeaways from all this. I don't want to have a knee-jerk reaction to what is very likely the small percentage you suggest. I don't want any changes to affect the user experience, or to penalise the majority who do the right thing. This has always been my approach in these discussions and the decisions that come from them. I do appreciate the input from the very members who frequent our site and use the resources, though. It's often a perspective I don't see from the other side.

[muon*]

I like it the way it is.

 

Except for the ones avoiding the fees, otherwise AOK.

 

A listing fee would deter me, but then I have a very low income to consider.