Fee Restructuring/Simplification (don't worry that's NOT secret code for a fee increase!)

At bidStart, we understand the importance of striking the right balance when setting our fee structure, which has remained largely the same since 2005. One of our main goals has always been to provide sellers with an affordable venue to sell all of their items, which has been a key to our success. At the same time, charging reasonable selling fees allows us to advertise our website and item listings, as well as manage and improve our website, and run our business.

We believe that our success over the past six years shows that we've found the right balance with our selling fees, which include both listing and final value fees. However, we also understand that when expanding into a new category, listing fees can deter new sellers from listing items on our website. As a result, to encourage sellers to participate in our newer categories, we offered free listing fees throughout 2010. We also made it very clear that this was a limited time promotion, which would end in December of 2010, at which time our normal listing fees would apply.

As December approached, we anticipated restoring our standard listing fees, as many new categories became well established on bidStart, such as comic books, postcards and sports cards. However, we also realized that it was important to understand what impact this would have for our sellers. Once we began to crunch the numbers, we realized that there was an issue. The type, quantity and pricing of most non-stamp items, didn't work well with our price structure. Or more plainly phrased, we believed we would be charging sellers too much money! Sure, we'd still be charging less than many other marketplaces, such as ebay, but we still felt we could do better for sellers.

From our earlier newsletter made at the beginning of this month, we indicated that we'd be extending our free listing fee promotion throughout January as we re-evaluated our fee structure. This lead to a substantial undertaking in January, and massive amounts of number crunching! Our first idea was to find out what amount of selling fees for stamps were attributed to listing fees, and then shift that amount toward final value fees for non-stamps and eliminate listing fees for non-stamps. This way we could collect the same amount of fees percent wise for non-stamps, as we do for stamps, instead of a higher amount, and sellers would only pay when their non-stamp items sold.

To calculate the correct fee structure, we looked at stamp sales throughout 2010, and the total listing fees and final value fees we collected. We then ran various scenarios against our actual data, to see what we would need to charge in final value fees to collect the exact same amount of fees, if there were no listing fees. We did this as a whole, as well as with many individual sellers to ensure uniformity for all sellers.

We then began to wonder, what if we offered this same fee structure for all of our sellers, including stamp sellers? That would certainly allow us to simplify our fee structure, and ensure that every seller could list all of the items they wanted, and not have to worry about paying fees for items that aren't selling. We also realized that it would allow sellers to list more auctions, and obtain better prices. After all, as a seller you may be hesitant to list an item at auction at a price you find reasonable, because you're afraid that it may not sell at the price you want. So you either start the auction lower, and possibly lose money, or avoid auctioning the item off altogether, and never have the chance to obtain a higher price through bidding.

The more we thought about it, the more it made sense to us. Which is why we believe that the right move for all of our members, present and future, is to reorganize our fee structure to eliminate listing fees, and instead shift those costs (and not a single cent more) to final value fees. In fact, we're so confident that this move will lead to more sales, that we decided it won't be necessary for us to charge the same fees we were charging before. Instead, we've figured out exactly what our final value fees will need to be for us to take in 5% less in total revenue (for ourselves), if we eliminate listing fees. Which leads us to the following:

Starting February 1, 2011, all listing fees will be eliminated from bidStart. You won't pay a listing fee regardless of what type of item you're listing, the price, or how you create your listing (whether it be auction, fixed price, or store item). Final Value fees will be 1c + 8% for items sold up to $50, 5.5% for items $50-$1000, and 1.5% for items above $1000. Which means you will only be paying a fee when your items sells. For every item you list, and you don't sell - you wont pay a single cent! (upgrade fees still apply) We can also assure you that if this fee structure were in place throughout 2010, compared to our then existing listing fee / final value fee structure, we would have collected 5% less in applicable fees, on the same items sold. Which represents a savings to all of our sellers.

We'll also be offering 100 free images on every single item listing! Want to feature the front and back of your stamp, go ahead - at no cost; or, feature the front and back of 50 stamps in a small collection! Additionally, there will be a minimum final value fee for non-store items of 5c. This is essentially to ensure someone who has 10,000 $0.10 store items doesn't send all of their items to auction, just because it's free to do so.

We strongly believe this is the right direction and will lead to more items sold, better variety for buyers, and overall lower fees for sellers. As usual, if you have any questions, comments or concerns at all, feel free to reply to this email and we'll get back to you promptly!

Thank You,
Mark Rosenberg
President
bidStart.com

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