eBay Changes Fees, Angers Sellers

Mike Phillips — Wed, 27 Jan 2010 15:44:00 GMT

EBay has once again made a change to seller fees. On the one hand, they dropped insertion fees. On the other hand, they seem to have raised final valuation fees. And many sellers are upset - not only at increased fees but the manner in which eBay has framed these fees.

Insertion fees will be dropped entirely for light sellers who list items in an auction format starting under $1. According to eBay, items listed under $1 work best in the eBay format, and stimulate billing. However, should you put a reserve on these items, a $.10 listing fee will be enacted, as well as a fee to set the reserve. Final Value Fees are now listed at 9%, regardless of the selling price but never more than $50. In general, eBay's fee changes seem to favor the light seller.

For power sellers, eBay is pushing Stores subscriptions, offering insertion fees as little as $.03 and Final Value Fees "... for the most part the same as today." Insertion fees drop according to the Store you sign up for - fees are higher for the Basic Store (with a subscription fee of $15.95 per month), and lowest for an Anchor Store (with a subscription fee of $299.95 per month). Final Value fees are on a sliding scale - both in accordance to the final purchase price and the category in which the item(s) is listed. EBay is also promoting Stores by encouraging users to sign up now, and avoid paying additional monthly fees until April, 2010.

A look around the eBay seller forums reveal some angry power sellers. They say that eBay is presenting these changes as a drop in listing fees but, in reality, the bottom line is growing for eBay and shrinknig for sellers. This is not uncommon - eBay sellers revolt every time a fee increase is enacted. But what seems to be really upsetting sellers is the language eBay is using - that is, they feel eBay is attempting to hide the truth about increasing fees. You can get an idea of power sellers' reactions in this eBay forum, which includes an interesting user-generated chart detailing the fee changes according to final selling price of an item. The official fee chart from eBay can be found here.

The heart of the matter is this: eBay is a business, not an altruistic service. Like any business, they need to make money. For now, it appears that eBay's latest business model is to lean on power sellers by pushing them toward opening eBay Stores - with their recurring fees - and increasing the minority of sellers' Final Value Fees. These power sellers are now in a Catch-22. Their bottom might be shrinking, but there are no serious alternatives - other online auction sites have a fraction of eBay's traffic and consumer mindshare, and an alternative like Craigslist is much more labor intensive. Until consumers make a switch, sellers are stuck.

EBay's official fee change statement.

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eBay Changes Fees, Angers Sellers