Should I sell on Mercari Marketplace?

Should I sell on Mercari Marketplace?
What you need to know before taking the plunge!

As we enter into 2018's Fourth Quarter, many online resellers are wondering if Mercari should be added to their marketplaces to sell on.

The answer depends on how much effort and energy you are willing to put into a sale and other variables.

So what you have with Mercari is a marketplace that is trying to figure out its place in the online marketplace world. It's made some really bad decisions in 2018, including creating a 30 day cap on listed products which changes them from Buy Now to Make an Offer. But If you have sold on eBay, then you are certainly already familiar with corporate non-seller types making really dumb decisions that make selling a really bad experience.

Mercari joined this intellect when it hired a former Facebook Executive. So now we are on the same page in that regards, lets look at a few of the pros and cons of selling on Mercari during fourth quarter. When it comes to Marketplaces as a whole, you have three layers. You have the founders - Ebay, Amazon, Etsy Then you have the exploiters who tried to pick up sellers and shoppers who were discontent with the founders - such as Bonanza, eBid, EblueJay (formerly Blujay), eCrater, IOffer, etc. Third are the noob marketplaces which have all been launched as apps first on smart devices - Mercari, Offerup, Poshmark, Depop, Letgo, etc. and these are almost entirely focused on Generation Y and Millennials. So it's really difficult to put them in an equal pyramid of most profitable marketplaces, because the Noob Markets are mostly less than 5 years young. It's difficult to know what will happen with them. But what we do know, is that Generation Y and the Millennial generation is one of the most affluent financially and passionate shopping generations so far in US History. So there is lots of money there, but there is also an entirely different level of expectations. But if we break down the marketplaces into Non-Niche selling platforms then it looks something like this. 1. Amazon 2. Ebay 3. Mercari 4. Bonanza 5. The rest (IOffer, Ecrater, Ebluejay, ebid, etc.)
If we add in the Niche marketplaces it's more difficult to list by profitability.
1. Amazon 2. Ebay 3. Etsy 4. Poshmark 5. Mercari 6. The rest.

The most notable quality about Mercari, is that its original vision was to be a marketplace for Non-Business Non-Professional homemakers to sell stuff laying around the house, and it's dissuaded professional resellers from selling on its platform in numerous ways.

1. It simply states in multiple aspects of it's app, that it is intended for the average non-business person.

2. It also has no method of collecting sales taxes. When asked about Mercari's perspective on collecting sales taxes, its representatives referred the question to other support members until eventually replying that the matter needed to be addressed through a different method than its Facebook or Twitter Support message system, while also deflecting to consulting a CPA or Business Tax Professional.

3. Listing on Mercari does not offer a feature for selling the same product with different variables, like a red shirt, a blue shirt and green shirt all of the same Polo style design. In fact its policies suggest that it may be a prohibited activity. Instead they need to be listed one by one, and if the title and description details are similar, then those products are often hidden in search results with just one of the product listings showing until it sells out and the next one being presented.

But these are negligible inconveniences for most online resellers.

Mercari is trying to figure out its new identity. Is it the number #1 marketplace app? Is it the eBay killer predator website? Is it transmarketplace?

In 2018 Mercari's Japanese CEO and founder realized that for Mercari to succeed internationally, it had to first succeed in the USA. This led to the launch of its website being opened for buying and selling and a multi-million dollar marketing effort currently going on with US Mercari.

The website put Mercari somewhere in between eBay and Bonanza.com the two most well know website non-niche marketplaces following Amazon. It also opened up its marketplace in this move, to baby boomer and x-generation shoppers who do not frequent app based marketplaces as often.

This is great for resellers especially who have been looking for an addition or alternative marketplace to sell on, but it has also created a few problems. First, the Mercari online website marketplace is not equivalent to its IOS or Android based smart device app, with two entirely different technical teams that apparently work independent of one another. This became apparent shortly after Mercari moved its app from being red themed to the new blue theme logo.

The Mercari app for instance has a Make An Offer feature, that allows a shopper to click a button and send an offer to a seller who can accept, haggle or decline. The website does not currently support that feature.

Anyone listing products via an older version of the Mercari app or via the website, can only make offers and receive or respond to offers by sending a message via it's chat system.

Unlike eBay, Amazon, Bonanza, Offer-Up, Depop, Poshmark and other app based marketplaces, Mercari did something crippling to its marketplace by forcing its shoppers and sellers to become more and more locked out with each update. Other marketplaces have made their apps backwards compatible. eBay for example is still updatable and works great on an older Iphone 4S running iOS 9, but the latest version of the Mercari app requires IOS 11 to be fully appreciated and IOS 9 devices the app is fully depreciated. That means that unlike the other app based marketplaces, in order to use Mercari via in app, a current generation smart device must be purchased and maintained.

I suppose in one way, it might make sense from a desire to keep Mercari focused on the post Millennial generations who are known to upgrade and dispose of older devices as they change, but it locks out shoppers and sellers who do not have an extra $1,000 lying around every other year to upgrade their device, just to be able to use the Mercari app.

There are quite a few app based features that are not available via the website, and they should be, It's not rocket science and there has never been a more advanced moment technologically in website design and development.

Most notably is the strange 30 Day Cap. The 30 Day Cap changes the sales status of a product that has been listed on Mercari for 30 Days or longer from the ability to make a direct purchase of the product, to only being able to make an offer on the product. However, this is only true of the newest versions of the app, and for that most sellers are thankful.

By forcing products to become Offer Only, several problems have been observed, such as offers can only be made within a set amount below the original price. This is very problematic if the product's price falls within Mercari's recent $5.00 minimum listing price, essentially rendering those products from being able to be purchased at all on the app. Though as already mentioned, older versions of the app that were released prior to versions with the automated offer feature can still buy the product at the original cost, same as on the website.

Many sellers have expressed grave concerns of frustration over Mercari's implementation of this feature, suggesting that by doing so, Mercari is manipulating prices by forcing sellers to take a lower value than they desire.

Mercari representatives have suggested deleting unsold products over 30 days old and relisting them, yet Mercari's policies for prohibited seller conduct states that excessive relisting can lead to suspension.

In most cases, changing the price, shipping options or updating key aspects of the listing releases the 30 Day Cap until the next 30 Day Cap. This is acceptable for those home sellers with a handful of products listed. For a larger seller, be it a hobby seller or small business, this can take a considerable amount of time if they have 100 or more products listed for sale. On the one hand, you have a Corporate Mercari that's wants more sales and more product listings, on the other hand, you have the overly restrictive Mercari that often makes the experience even less friendly than on eBay.

eBay actually wins in seller friendliness compared to Mercari in this particular instance. On eBay, a product listing expires in 30 days, it then drops off the marketplace public pages into an archived state. eBay then sends an email to the seller reminding them that it's time to relist the product for sale. The seller finds that product in their archived list of unsold products, clicks a check box next to it and clicks the submit button and eBay instantly relists the product for sale. To make it even simpler, eBay recently made it possible to relist the product automatically up to 8 times. That's 8 months for those who do not want to do the math.

But compared to eBay or Amazon; Mercari is very strict in enforcing its policies. It has a low threshold and forgiveness policy. It sends you a few warnings triggered by its algorithms and then then your account is temporarily or permanently suspended.

Many sellers on Mercari have been suspended for having more than one person at the same address opening an account. Married couples have often complained that Mercari suspended both of their accounts and then forced them to choose which one of the two would remain active. This despite having a policy suggesting that by letting Mercari know in advance, more than one account is allowed.

eBay sellers on the other hand get penalized for their reselling sins, with defects that affect sales, etc. but it takes considerable negligence to get suspended on eBay. Their are some sellers on eBay who probably really need to be kicked off, and if they were on Mercari, they would have been, so its something to keep in mind before taking the plunge. You really have to take the time to research and understand Mercari's policies if you want to sell on its platforms successfully for the long term.

Before you take the Mercari reseller plunge, you also need to access you customer service skills honestly.

Mercari shoppers have very high expectations. Including in communication, easy returns and quality products.

Further, frequent and regular correspondence is required on Mercari, and if you harass or are reported as being rude to Mercari, you won't last long. Mercari has built in algorithms in its chat messaging system, similar to eBay's more even more extremely, actually monitoring for verbal abuse and poor customer service etiquette.

If you are coming from a marketplace like eBay or Amazon where very little communication, if any occurs between seller and buyer, you may be in for a surprise awakening and maybe even a frustrating experience as many millenials are a bit pesterious. For that reason, it helps to use pre-written "Canned Messages" to respond on Mercari, especially if you general lose your cool.

SellerThink has created a downloadable list of responses to commonly asked buyer questions that can be copy and pasted as needed. You can download the files from the description of the corresponding YouTube video here.

What sells best?

If we're only talking about money, then you need to put Mercari on your list of places to sell through the upcoming fourth quarter. Retail arbitrage will probably sell through the best, compared to previously owned products. Being that Mercari is a Millennials friendly environment, products that are Tech Trending sell well, fashionable clothing, especially trending brands of shoes, authentic makeup and other products that appeal to the new generation are the products to sell when possible. A lot of Mercari shoppers are looking for products for themselves, where-as, Amazon shoppers are looking both for themselves and gifts for others. eBay similar to Amazon. That being said, you are more like to get a holiday gift sale from this generation of shoppers on Mercari, than you are on eBay or Amazon. Regardless, the bottom line is keeping the marketplaces in perspective. Obviously, if you are selling retail arbitrage, you're going to want to sell on Amazon as one of the top choices for fourth quarter.

Ebay, can also pull in good money during fourth quarter for retail arbitrage, but also previously owned goods. Poshmark is the Queen of marketplaces for clothing and accessories.

Show You The Money

Mercari does not pay up front, you ship it, the buyer inspects it, then they or Mercari have to rate you to release the money. If the buyer sends you a message after you ship it or once they get it, and you haven't responded, Mercari gets triggered so they won't auto-rate you in the event the buyer doesn't bother to rate you - you'd have to message Mercari and ask to get rated, and therefore have your payment released from the shopper. It is a similar method to Alibaba. Mercari acts as its own middle entity financial broker, holding the money until both sides agree to the completion of the sale. This has disadvantages and advantages for both buyer and seller, including having a three day review period and then all sales are final. Compare this to eBay where sales are guaranteed by eBay regardless of the seller policy for 30 days, and if the product is purchased on eBay through PayPal, then PayPal extends a generous 180 day return policy.

Even though a shopper can pay with PayPal on Mercari, all sales are considered finalized after the 3 day waiting period and ratings have been issued. In one situation, a seller had a buyer who filed a PayPal claim and those funds were deducted from their Mercari account making it go negative. This was discussed in the SellerThink YouTube video, "When Mercari PayPal Refunds"

Ultimately, the seller did receive a refund from Mercari. It work a few weeks and a lot of correspondence with Mercari by the seller to resolve. Because all PayPal transactions are between PayPal and Mercari, refunds by PayPal are also ultimately between PayPal and Mercari. This is important to remember if you will be selling on Mercari, because you may need to remind Mercari or this fact in addition to reminding them of their 3 day final sales after ratings policy.

So what happens in this kind of scenario? Ultimately, Mercari should refund the seller and the buyer will either receive a warning or get suspended for policy violation. This is policy information is hidden in Mercari's Terms of Service agreement.

What it costs to sell on Mercari compared to eBay.

On a plus side, Mercari (at the time of this article) has a single commission fee of 10%. So if you sell the product and have the buyer pay for the shipping separately, you are only paying 10% on that product, not the shipping.

Compare this to eBay which charges you 10% of the total price regardless of the shipping feature used. If you offer free shipping on eBay, then you pay the total product price (which should have the shipping price already included). Separate the shipping cost from the product cost and eBay will charge you a 10% fee on the product price and an additional 10% fee on the shipping price. This, on top of PayPal fees, can make eBay cost almost double what it does to sell on Mercari.

A perfect example comes from an eBay sale for a DVD that sold for $10.75 plus $4.25 shipping costs.

On Mercari this would cost the seller, $1.08 total in fees. However on eBay, the fees were $1.08 for the product, $0.43 shipping fee and $0.74 for PayPal's fee. A total of $1.17 more in fees on eBay than on Mercari. Remember! This was for a low value product. On a higher value product the PayPal fees would be significant, and if the product had a heavy shipping weight at say $30.00, the eBay shipping fee would add up also.

That brings us to another plus side of Mercari . No PayPal fees. All PayPal payments are handled and processed by Mercari, so they pay those fees.

A plus or Negative - Mercari balances can not be spent on the Marketplace if you are in California or a few other states. Also, you can not deposit your money to PayPal, you need a bank account or other account that can receive money via an account number and routing number. This usually takes about two to three days for Mercari to process the deposit from the time you request it, and another few days for you bank to clear it. You also have a $2.00 processing fee if you try to deposit anything under $10.00.

However, something to take note at the time of the writing of this article, is eBay's Fall 2018 Update which states that in the future, payments will be directed straight to a bank account similar to Mercari, as part of eBay's departure from PayPal as it exclusive payment provider.

One negative or postive on Mercari, depending on how you look at it, Mercari has a $5.00 minimum list price, so if you're trying to dump a bunch of products for under $5.00 to build up your ratings or feedback, it's not possible

What about shipping?

Shipping is always a question for new sellers and potential new Mercari sellers. So lets go over that for a few minutes.

On Mercari, unlike other marketplaces, you have bulk labels which cover a range shipping weights. This has both advantages and disadvantages, but ultimately, if you are letting the buyer pay for the shipping separately, or including the Mercari shipping labels in the price to market it as "Free Shipping", then it is more of an advantage than disadvantage is for no other reason than you do not have hassle with creating a shipping label on your own. (which is an option)

Mercari's first class label for instance covers from 0 Ounces to 15.9 ounces at a current flat rate of $4.25.

They email you the label, the tracking number is already attached to the product order details as soon as the shopper makes the purchase, you print it and ship it. The alternative of USPS First Class is FedEx Smart Post for the same price, However, FedEx Smart Post is excessively slow, and in the event of shipping losses or damages, FedEx SmartPost disputes the claim, wanting to investigate if the loss or damage occurred during its handling of the product or the USPS on the final destination delivery side. (I do not recommend SmartPost, when USPS First class is faster and easier to file a claim with in the event of a problem)

First class is followed by additional tiers of weight classes, though we'll only look at the next tier which is 1 Pound to 3 Pound Label. The 1-3 LB label options are US Priority Mail currently at $8 or FedEx Ground at currently at $6.50, FedEx Ground in this case is often a great option.

Unlike almost any other source you may find for buying your own shipping labels off Mercari, the shipping insurance included with it's USPS Priority Labels is for $100.00. Compare that to the $50.00 insurance provided for Priority Labels via eBay, PayPal, Pirate Ship or Shippo. First Class labels on Mercari have no insurance, however, the FedEx Smart Post equivalent, has the $100.00 insurance similar to the higher tiers of FedEx Ground Labels. Mercari's shipping labels can potentially save you considerable money, depending on what you are shipping compared to "Shipping it yourself".

The Wrap Up. Should you sell on Mercari?

As already mentioned, there are different kinds of pros and cons to selling on Mercari. Selling on Mercari will be an entirely different kind of seller experience for many. The ability to be flexible and adapt will be necessary for more experienced, long time sellers making the transition. You will need to do your homework, do your research, just like you had to do before you sold on your first marketplace, to make sure you fully understand how things work, even then things change on Mercari unexpectedly.

One of Mercari's significant weaknesses, especially if you have sold on other marketplaces, is its poor communication with it's seller community. Many of its most problematic symptoms occurred by implementing unannounced changes to the platform that have directly resulted in forcing its community to have to make unexpected adaptations to their strategy. The 30 Day Cap mentioned several times already is an example.

Mercari has been short sighted during is transition phase between being fully app restricted to also being a website marketplace.

Unlike on an app update where Mercari can simply put all the bugs updates and recent changes in the text description of the app download page, no such announcement page has existed on its website so far.

Unlike eBay who announces significant policy and functionality changes at least three months prior to implementation, Mercari has no function for is website or app community and simply drops them like bombs causing panic and confusion.

The majority of 2018, sales on Mercari have been significantly slower than in 2016 or 2017. Its many unannounced features have often been poorly implemented or from the very start were broken. Correcting this issues has been considerably slow in terms of website based marketplaces, instead implementing corrections based on the releases of new versions of the app. These things along with shipping fee increases, negative publicity on YouTube and other social media outlets have hindered sales.

The best advice SellerThink can provide to any one considering selling on Mercari is to read Mercari's Prohibited Seller Conduct policies, it's Prohibited products policies, and unlike other marketplaces, you'll want to read its Terms of Services also, because there are policies hidden in it that do not appear anywhere else. Follow those three important suggestions, be flexible, take advantage of the SellerThink Canned Messages and you should be able to survive on Mercari, whether you get any sales or not.

As for website marketplace ranking. Mercari currently comes in third place with Amazon in first place, eBay in second place and Bonanza in fourth place. Marketplaces like Etsy and Poshmark are not included since they are entirely focused on a niche area.

Research, Research, Research

You definitely want to do your research before diving into Mercari since it functions so differently than any other marketplaces.

This article was written by Randy Dreammaker on 8/11/18. Randy is the host of SellerThink on YouTube, the SellerThink Blog and several other resellering sources. He has been selling online since 2006 and has researched and sold on most marketplaces. Randy was a top rate product reviewer for 14 years on eBay's Epinions.com and Shopping Cart review websites.