If you sell watches on eBay, you’ll pay higher fees beginning in May. The fee hike on sales of watches at any price is to pay for eBay’s marketing of high-priced, luxury watches. Consider it a “luxe tax” for all watch sellers.
To give a taste of what’s changing:
- Sellers enrolled in Managed Payments with no eBay Store currently pay 12.35% plus 30 cents for selling a watch up to $1,000. That will jump to 15%. (There are tranches for items that sell for over $1,000.)
- Sellers enrolled in Managed Payments with an eBay store currently pay 11.5% plus 30 cents for selling a watch up to $1,000. That will jump to 12.5%. (There are tranches for items that sell for over $1,000.)
We found one seller reacting to the fee increase on the eBay Seller Discussion Board, who said the 15% final value fee was “profit breaking.”
eBay explained in its April 12th announcement that the fee increase in the Watches category was in order for it to spend more on marketing and product innovation – and it’s clear it’s all about luxury watches:
“Our broad-based multichannel marketing has helped increase new luxury watch buyer traffic on eBay. As we continue to focus on the luxury watches experience, we are increasing final value fees in the Watches (260325) category. This will allow us to invest even more in luxury watch marketing, social media, SEO, and product innovation as we drive towards becoming the leading platform for luxury watches.”
While social media and SEO are not generally areas that require large outlays, eBay wrote, “We’re marketing to watch enthusiasts with targeted campaigns that are resulting in unprecedented numbers of new and repeat luxury watch buyers. We also launched a dedicated social handle to reach watch enthusiasts with a community management team that focuses on this daily.”
eBay announced a new escrow requirement at the same time:
New escrow payment option for high value watches
“As part of our ongoing focus on creating the best watches experience, starting the week of April 20, 2021, you will see an optional payment via escrow through our partner Escrow.com for luxury watch listings priced at $10,000 and up.
“Escrow can give you greater confidence when you sell high-value items by confirming your buyer’s identity. Escrow services are customary for many high-value purchases, such as home sales and business acquisitions. Both sellers and buyers of luxury items have asked us to incorporate an escrow payment option to facilitate wire transfers for high-value transactions on eBay. If you list watches priced at $10,000 or more, we recommend that you register with Escrow.com. Learn how to create and use an escrow account on Escrow.com
“In addition, eBay covers any processing fees for escrow services so buyers won’t pay any additional fees.”
Buyer and seller FAQs on Escrow are available on this page, where eBay states: “Currently, qualifying items sold at $10,000 or above require Payment with Escrow.com.”
If you’ve been paying attention, you know that eBay has been focusing a lot of attention on three categories: luxury watches, high-priced sneakers, and collectible trading cards – part of a new vertical strategy. If you have any thoughts on what might be next on eBay’s radar screen in terms of new categories getting the “vertical” treatment; fees; escrow requirements; authentication services – or anything else – let us know!
Update 4/18/2021: Digging deeper into last week’s news, we recalled eBay’s announcement from September 8, 2020, when it lowered fees for sales of high-priced watches, writing:
“For sellers who are active in managed payments, the marketplace is lowering final value fees in the Watches category for watches sold over $1,000. Managed payment sellers can save up to 35% in final value fees as compared to the final value fees they previously paid.”
At the time, it also announced the launch of escrow for luxury watches when it planned to make it available by the end of the year, writing in its September announcement:
Escrow Payment: eBay is introducing escrow payment for high value watches to elevate the purchasing process for its buyer and seller communities. In partnership with Escrow.com, the most licensed online escrow company, the new escrow payment experience provides an additional layer of trust when buying and selling luxury watches by ensuring the entire experience proceeds safely and securely for both parties. The buyer is protected as they have the opportunity to inspect the item before payment is released, while the seller is protected by being able to track the transaction at every stage, ensuring payment is received. The feature will begin rolling out in the fall and will be available on all eligible listings from all U.S. sellers by the end of the year.
Here’s how it works:
- Together with Escrow.com, buyers will pay using escrow services on watches sold for $10,000 or more on eBay.
- Escrow.com facilitates transactions by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met. The buyer will have seven days to inspect and examine the watch, before accepting the item. Once accepted, or if the seven-day inspection period has passed, returns will not be available.
- For sellers, there is no risk of charge-backs or escrow processing fees.
We also recalled that eBay announced in July of last year that it would make escrow services available on eBay Motors and in the eBay Motors App through a new partnership with Escrow.com.