Doing the Math on eBay 2011 Fee Changes

eBay sellers will have to get their calculators out to figure out how much they are going to pay in fees once the new fee structure announced today rolls out in April/July. AuctionBytes created a chart to determine how the changes would effect a fixed-price item that a seller listed for $12 with a $3 S&H fee to get a sense of how these changes will impact their bottom line.

One thing that jumps out is how much sellers will save if they already offer free shipping on their fixed-price listings - in the table above, the savings range from 8.3% to 16.7%, depending on the category.

But sellers who charge $3 for S&H on a $12 fixed-price item will pay anywhere from 4.17% - 14.6% more in fees. (Despite this, some MSM publications are calling the change a fee decrease, a mischaracterization since some sellers will pay less, and others will pay more in fees).

eBay is also getting rid of the 5% PowerSeller discount; and Top Rated Sellers who charge shipping fees will incur extra fees - the 20% TRS Discount of 20% only applies to the price portion; eBay will not give TRS sellers a 20% discount on the FVFs for the S&H portion.

It's also important to note the high-volume sellers receive discounts from shipping carriers, putting low-volume sellers at a disadvantage if they choose to absorb the shipping costs.

One reader commented about the impact of combined shipping discounts that many sellers offer to buyers who purchase more than one item from them. If those sellers decide to eat the cost of shipping due to the fee changes and charge no S&H fees, they will not have to offer combined shipping discounts. But this again impacts high-volume sellers more favorably.

The area where higher volume sellers who already offer free shipping may be impacted is if many more sellers move to a free-shipping model; in that case, they will lose their "free-shipping" differentiation.

We also took a look at the impact of changes on the auction format for non-Stores and Stores, below.

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Auction Format (Non Stores fees)
Old: Up to 100 free auctions for starting price under $1, then range from 25 cents to $2
Old: FVF 9% of sale price (maximum charge $50.00)

New: Up to 50 free auctions (no insertion fees) no matter the starting price, then range from 10 cents - $2 (Buy It Now included)
New: FVF 9% and applied to the total amount of the sale - including shipping (capped at $100)

So whatever your shipping & handling costs, add 9% in extra fees for non-Stores auctions - for example, an extra 27 cents for a $3 S&H charge, or 90 cents for a $10 S&H charge.

Auction Format (Store fees)
Old: Insertion fees range from 10 cents - $2
Old: 8.75% of the final sale price up to $50 - see link for tiered pricing details

New: No change (Insertion fees range from 10 cents - $2)
New: 7.5% up to $50 selling price and applied to the total amount of the sale - including shipping
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Please let us know how the new fee structure will impact your business.

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