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EcommerceBytes-NewsFlash, Number 2873 - August 20, 2012 - ISSN 1539-5065    2 of 3

Survey: eBay Should Drop Listing Fees

By Ina Steiner
August 20, 2012

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Nobody likes higher fees, but the issue is less clear when it comes to eBay insertion fees. That's because zero listing-fees equals more listings, resulting in more competition among sellers for shoppers' eyeballs. EcommerceBytes asked readers this month if they thought eBay should drop listing fees, and why or why not.

The majority of sellers responding - 79% - said eBay should drop listing insertion fees, while 21% said they should not drop listing fees.

Many survey respondents feared eBay would raise commission fees (FVFs) if it lowered or eliminated listing fees. "I say yes with some hesitancy. If they do drop them then the FVFs will go through the roof. I'd love to pay no insertion fees but NOT if the FVF will be more than they are now."

But others felt eBay would earn more revenue through increased sales by having more listings on the marketplace, so would not have to raise FVFs. "Very few marketplaces have them any longer and it makes eBay look like a dinosaur. Plus it would greatly expand the number and variety of listings available which should translate in to much more in FVFs for them in the long run."

The sellers who were against eBay dropping listing fees said they feared more listings would mean more competition - "My listings already turn up so low in the "Best Match" search, I don't need more junk cluttering it up," wrote one respondent.

They also felt that free listings would attract poor quality listings. "There will be tons of "garbage" on the site if there are no listing fees," wrote one, while another wrote that free listings "encourages too much junk/clutter."

But the majority of respondents felt eBay should drop listing fees because of lower sell-through rates (conversion rates) on eBay - 64% of respondents said their average eBay sell-through rates had decreased over the past 2 years.

"They should drop listing fees since each day there are less sales. I'm paying a lot of money in unsuccessful auctions."

"Listing fees deter me from listing since it's hard to have a good conversion rate."

"They would encourage more listings of off-beat items, although they risk inundation of non-sellable items. However, they risk losing a lot of inventory with fees for items which don't sell, due to no fault of the seller."

"Sales are very slow and listing fees make it cost prohibitive, especially after final value fees, to sell in large numbers. Besides, after all of the changes to Best Match and TRS ebay has made recently, it is a wonder that they have the nerve to charge anything at all!"

Sellers of unique items said they have to wait for the right shopper to come around, and said insertion fees have a major negative impact on these types of items. "Many high quality items are "slow movers" and insertion fees can eat sellers alive," wrote a respondent. "I sell yearbooks and it can take years to find that certain buyer that wants one of your yearbooks. With a slow sell through rate those insertion and store fees add up too fast."

How have your eBay sales performed over the last two years in terms of sell-through rates?
My average eBay sell-through rates have increased over the past 2 years 15.6%
My average eBay sell-through rates have decreased over the past 2 years 63.9%
My average eBay sell-through rates have remained the same over the past 2 years 9.8%
I don't know 4.1%
Does not apply because I no longer sell on eBay 4.1%
Does not apply because I am a (relatively) new seller 2.5%
How have your eBay sales performed over the last two years in terms of average selling price?
My average eBay selling prices have increased over the past 2 years 20.5%
My average eBay selling prices have decreased over the past 2 years 54.1%
My average eBay selling prices have remained the same over the past 2 years 16.4%
I don't know 2.5%
Does not apply because I no longer sell on eBay 4.1%
Does not apply because I am a (relatively) new seller 2.5%

Another seller wrote, "Simply put, I would offer far more items for sale on eBay if listing fees were eliminated. I have a premium eBay store but at 5 cents a listing per month I cannot afford to list the thousands of under $10.00 collectible items that I could potentially list. These are the type of items that just one person a year might look for but when they do I would like to be the one to sell it to them.

"I have no problem paying a monthly fee that would allow me to list say 5,000 items but the monthly fee would have to be reasonable... like the $49.99 I pay now for a premium store. I thought the digital revolution would take care of quantity issues on sales sites... does it really cost that much more for eBay to host 5,000 of my items then it does for the 300 or so items that I now have listed?"

Some sellers brought up the fact that eBay places ads on listing pages, such as this respondent who wrote, "They should drop (listing fees) because they are always cross-promoting other items/advertising on our listings, therefore they shouldn't be charging us. I would be more than happy to pay insertion fees if my listings weren't all mucked up with eBay's ads! We're paying for the listings, not for ad space for other retailers."

Another wrote, "As a barrier to entry by junk purveyors is the best reason for a listing fee - although now that they are selling ads on every listing, they're probably open to any kind of junk listings."

Additional Comments from Survey Takers:

"eBay will be inundated with listings, especially for common low priced items in collectibles. Their search engine won't be able to handle it and buyers won't like it, they already complain about having to search through too many boring items and it's their biggest complaint about alternative sites."

"It would allow sellers to list items for $3.00 or less. In July 2012 Ebay gave sellers 6 days of free listings. As a seller of used fishing equipment, I was able to list & sell over 50 fishing lures, that I could not afford to sell due to listing fees. Ebay & I both made good money, & I was to get rid of inventory that had been UNSELLABLE!"

"My listings already turn up so low in the "Best Match" search, I don't need more junk cluttering it up."

"There would be too much stuff listed that has little or no value. It's hard enough now to find things via the hit or miss search on eBay without adding more items to the mix."

"I would list more things, make more money and so would fee-bay. Folks think there would be lots more junk to sift through without listing fees. Well...yeah! Ain't it great! Besides, that's what "search" is for. I'd love to make a living on ebay. I won't because of all the stupid edicts, feedback screw up and more. But I'd put up with some crap to be able to make more money."

"If they were to drop listing fees they would grow even faster and much, much larger. I think they would make more money in the long run because they would still charge final value fees which would double or triple with the amount of traffic no listing fees would generate!"

"I think if they drop their listing fees that will attract more honest sellers and new sellers that are afraid to post their items and pay a fee if their item doesn't sell. It gives new sellers a chance to sell, learn And grow without the risk of losing money in listing fees. It will also do away with those what I call dishonest sellers that list their item for .99 and then charge a 25.00 or more shipping charge for a item that cost 2.15 to ship. Their are a number of online market places that don't charge any listing fees and it's time EBay made the switch before they lose more sellers."

"It's a close call because they raised their FV Fees to over double what they used to be; isn't that enough? Still, if there were no listing fees, I fear eBay would quickly fill up with worthless junk because people would list virtually anything, just throwing everything up there to see what, if anything, sells. If there is a nominal cost, there will be more thought behind listings both in quantity and quality. "People perceive no value in that which costs nothing.""

"Because most of the other ecommerce venues charge no listing fees or very little to list. Etsy, for example, charges 30 cents (last time I listed there) for a listing that lasts 3 months. Bonanza charges none, but does charge final value fees minus a percentage of shipping. Artfire charges a flat monthly fee (currently, $12.95) and no other fees to sell. I've only sold books on Amazon and it's been awhile, but I think they charged a small listing fee plus a percentage of your sale and set your allowed shipping charges at $3.99. John Donahoe talks about disruptive innovation and saying goodbye to a very successful past. Well, what would be more disruptive than dropping eBay's listing fees? What's wrong, John? Are you afraid you wouldn't be able to prop up eBay's bottom line on Wall Street without them? I sound very anti-eBay, but I'm not. I like eBay and I want eBay to succeed because it's my best selling (and buying) venue. They still have the traffic, but that won't be forever and I want them to stay competitive with other ecommerce venues."

"Yes, drop listing fees, but do not allow GTC free listings as this will result in a lot of dead inventory parked on eBay (as is the case with eCrater). If GTC is allowed, eBay should require unsold items, after some period of time, to be revised, and if the seller fails to respond to that message, eBay should end the items. Listing more items means selling more items, but with low STRs, listing fees make it uneconomical to list much more than the most-likely-to-be-sold items. I use the 50 free auctions on 6 different ID's, but I would list many more than 300 if unlimited free auctions were available. One would hope that eBay's Best Match algorithm would use seller's STR as a factor for placement. A difficulty I see, however, is in using "ending soonest" in search, whereby "dead" stuff cannot easily be filtered out."

"It's too limiting to have listing fees. Ebay would make more money to make up for the losses in listing fees because there would be more items for sale. However Ebay needs to make sure they don't increase FVFs, their duplicate policy is well in place and enforced and the searches are fixed before doing anything like this. If they don't, I personally think it would be absolute choas."

"Sadly dropping the listing fee will almost certainly lead to eBay making up for it by raising fees elsewhere. I hold no delusion that eBay would actually make it cheaper to sell on their site. With that said, I voted yes anyhow because it's a pain to get your listing fees back for canceled or failed transactions. With no listing fees to wait for, I could more readily relist."

"They take plenty enough out for final value fees for one thing! I have moved my inventory to other sites that don't charge any fees to list and only charge when your items sell. I might consider opening a store again if I didn't have to pay fees on the listings in the store. I closed my eBay store when they raised the insertion fees on store listings. Paying for a store is bad enough!! I get free stores on other sites too."

"I think eBay should drop listing fees because it would attract more smaller sellers who have left due to the high listing fees."

"In many categories eBay is already flooded with garbage from Asia. This would make the problem worse. eBay should instead give eBay Store owners the 50 free auction listings that other sellers get."

"It would flood the site with garbage listings, just as it does during free listing days. It makes trying to find the right item to purchase a miserable experience."

Comment in this August 7th EcommerceBytes Blog post.

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 ina@ecommercebytes.com.

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