eBay Sellers Say Free Auctions May Cost Them
By Ina Steiner
eBay announced a special new fee structure on Tuesday that goes into effect next month, but sellers say the five free auctions eBay is giving them may actually cost them more in commission fees than the old pricing structure, depending on the auction starting price and final selling price.
eBay is giving sellers five free auction-style listings per month with certain restrictions beginning June 16, 2009. Final Value Fees will be 8.75% of the sales price, capped at $20. Sellers must use eBay's Sell Your Item form or Simple listing form in order to be eligible for the new pricing. Any additional items sold during the same 30-day period will have the same Insertion Fees and Final Value Fees as they do currently. Sellers who use an eBay tool or third-party listing tools will not receive the special pricing.
Because eBay uses a tiered system to calculate Final Value Fees, the fees may be higher under the new fee structure - assuming the item sells - depending on the starting price and final selling price. Where the five free auctions incur an 8.75% commission capped at $20, the current commission is 8.75% of the initial $25.00, plus 3.50% of the initial $25.01 - $1,000.00 plus 1.50% of the remaining closing value balance ($1,000.01 - closing value).
Because the insertion fee is variable depending on the starting price, it's difficult to make comparisons. Sellers are using an online fee calculator to help them compare the rates.
eBay said in its announcement, "We're continuing our efforts to lower the upfront costs of selling on eBay. The 5 listings with $0.00 Insertion Fees are especially helpful if you don't sell a high volume, but offer the kind of unique and hard-to-find inventory buyers expect to find on eBay."
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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