I want to begin by saying this post was inspired by Darren Rowse’s Problogger Group Writing Project for December. The subject for December is Reviews & Predictions and The Auction Rebel contribution will be my predictions regarding some of the things we will see happen with eBay and the eBay community in 2007.

I will start off with two easy ones. I predict…..

1. The United State Postal Service, the United Parcel Service, and Federal Express will all raise their rates and make significant change to how rates are applied. We already know that the USPS has a rate increase scheduled to become effective in the first half of 2007. However, if the proposed new Dimensional Weight Pricing for Priority and Parcel Post mail is also approved, I predict the increase, combined with the additional time factor involved, will cause some sellers to shut down their eBay businesses.

2. eBay will initiate fee increases of some kind within the first three months of 2007. Fee increases have pretty much become an annual thing, and this year will be no different. The main focus of the increases will be listing fees and final value fees for both core auction listings and eBay stores, with eBay stores being hit the hardest.

Last year eBay increased store fees thinking it would result in many sellers closing their stores and returning to core auction listings as a business model. That hasn’t happened. More sellers are using eBay stores as a primary part of their business model now than before the fee increases. eBay still has the same basic income problems with stores as they did a year ago, and they will take additional steps to solve that problem in 2007.

3. eBay Express will either be closed down or undergo dramatic changes. - eBay spent a lot of money and launched eBay Express with a lot of fanfare. They are still heavily promoting it to sellers and talking about how successful it is. In reality it has been a dismal failure from the standpoint of most sellers. eBay will probably bite-the-bullet and close eBay Express sometime in 2007. If they don’t, expect to see some dramatic changes. Possibly as dramatic as closing all eBay stores in an attempt to force store sellers into using a new, revamped eBay Express.

4. 2007 will see more and more big name sellers go belly-up and close down their eBay operations. These sellers have huge feedback ratings, high power seller rankings, turn a lot of merchandise, have gross sales in the millions of dollars each year, and generate a lot of income from fees for eBay. The reality though, is that most are operating on very thin profit margins and are over extended. Many aren’t actually making any money at all. The continued changing face of eBay, along with increased fees, will force many of these sellers to close down their eBay operations.

5. The eBay business model of sourcing inventory from mass market drop shippers and wholesale sources will become less and less viable for most sellers. This has always been a tough business model to make a real profit from. With additional fee increases, increased competition from other sellers, increased shipping costs, and the ever present ceiling on final values, potential profits will drop even further. For most sellers it never was a good business model and it will get even worse in 2007.

6. The eBay auction format will continue to be a great business opportunity for the small seller. In the next year we are going to see a lot written about eBay auctions, by themselves, no longer being a viable business model for the small seller. Nothing could be further from the truth. Small sellers who target small niches within eBay and offer quality products they either produce themselves, or ones with a limited supply and high demand, will continue to grow and prosper.

7. We will see the launch of the first $1000 “how-to-eBay” information product in 2007. It will be offered by someone who has never seriously sold on eBay, but a lot of copies will be sold because with an affiliate payout of $450+ it will by promoted as the best thing since sliced bread by everyone who has ever heard of eBay. Actually, the price won’t be $1000, it will be $997.

8. Good, solid, fairly-priced “how-to-eBay” information products devoted to specific niches within eBay will become more and more popular. Written by people who are actually making a living on eBay within the niche they write about, these have always been available but never highly promoted. 2007 will see a huge growth in the popularity of these products and, the resulting popularity, will bring more and more of them onto the market, making good, solid information more and more available.

9. Jim Cockrum will finally publish an issue of his eBay newsletter containing absolutely no information about eBay at all. He’s come close several times in the last year, but he will be successful in 2007.

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