Friday, March 2, 2012

International Payments and Email Response Rates on Bonanza

Sometime months ago, Bonanza changed its interface so that buyers outside of the United States can have Bonanza display all prices in their own currencies. While I have my booth on Bonanza set to display the prices in U.S. dollars, I cannot prevent prospective buyers from switching Bonanza on their end to display in their own currencies.

On the surface the setup appears to be the same as what eBay has. On eBay, buyers can see listings in their own currency through the international eBay sites. The difference is that buyers are forced to send the payment in the seller's currency.

On Bonanza, buyers are allowed to send payment in their own currencies. This has caused U.S. sellers to receive payments through PayPal in foreign currencies. The seller is the one who pays the fee for the currency conversion to U.S. dollars. The fee is around $1.00 for small transactions and can be $5.00 and up for larger transactions.

Some Bonanza sellers have the mistaken impression that we can prevent our items from displaying in other currencies. We have no control over the currency that is displayed to the buyer. Another misconception is that this is a PayPal problem. I have never had an eBay buyer send payment through PayPal in a foreign currency, so I am confident that the issue is tied to Bonanza.

Up to 50% of my international buyers are now sending payment through PayPal in their own currencies. My PayPal is set where I have to approve such transactions, and then I incur the currency conversion fee. Despite the fee, I do accept all of them without comment.

Since Bonanza allows international buyers to set the currency to their own and allows them to send the payment in that currency, I do not feel like I have the right to deny the payments. My PayPal fees have increased, but in the end, I am confident that I gain. Some of the buyers have become repeat buyers. I am getting far more international buyers than I did back when Bonanza forced the buyers to pay in U.S. dollars.

A far higher percentage of my best recent transactions have been to international buyers. By "best," I mean transactions in which buyers are purchasing expensive books or large quantities of books. Clearly, I do benefit.

I believe that seeing the prices in their own currencies is directly impacting the likelihood of international buyers deciding to make a purchase.

If you sell on Bonanza, you need to be aware that many international buyers are sending payment in other currencies. If this is a problem, then you need to mention the currency issue in advance when you answer international postage inquiries.
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Bonanza has a new feature called "Email Response Rates." The email response rate measures what percentage of buyer questions that a seller answers and also records how fast the seller responds to those questions. The email response rate only measures the email response from questions sent from a seller's item page from the "ask seller a question" link.

The idea behind this new feature is to help weed out the inactive sellers from the active sellers. Unfortunately, sites like Bonanza attract sellers who list their items, forget about their items, and never return. You would think that these sellers would notice when they receive messages or payments, but many of them never do. You can imagine how unhappy a buyer becomes when a purchase is made from one of these sellers, and the purchase is never received. Those sellers make all of us look bad.

The email response rate displays on each item page. You can see mine here. I have answered one question since the feature was made live, and I answered eight hours after the message was sent.

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