eBay Announces Fee Changes, Will Eliminate Store Format

by: Ray

Richard I just first wanted to say that I really do appreciate this blog you have here and how you use it as a helpful tool where sellers can let out their questions or concerns.

I also especially like the way you have been responding to several eBay sellers that were upset, disheartened or that were going through a rough time.

As far as my analysis on the eBay fee changes.  I look at the situation like this.

If you are a small seller that sells less than 100 items a month, I would say stick with the auction format unless you feel you need to sell with the fixed price format to get a higher price per sale.

If you look at it this way though, you will pay nothing for 100 auctions at under $1.00 and then around 12% fees (eBay + paypal) and Shipping.

Of course this is most likely an increase for most and it hurts, especially during a recession, but quality items such as antiques, collectibles or rare items should really do well with this new format.  The fees compared to Amazon seem nearly the same but you have more work set out for you.  There are marketplaces like Etsy but you don't get the same traffic.

So for a medium sized seller that sells 50-150 items a month, a basic store is probably a good idea if you look to sell mostly fixed price items.  Sure the fees are increasing from $.3 cents to $.20 cents an item but I know that for most sellers, the higher exposure will help pay for the extra listing fees because of increased sales.

For a Larger seller that sells 200+ fixed priced items a month, the Premium store is really a no brainer.  Unless you sell $.1 cent items, the $49.99 a month is not that bad if you think about the listing fees of only 5 cents an item.  I would guarantee that your sales will increase and make up for the extra fees and the monthly payment.  

Anchor Store as some have already stated is only for the mega sellers, corporate sellers, etc that list in the thousands each month (12,000 + items)
While the listing fees look good, the store price of $299.99 a month is not good if you only sell a couple hundred items a month or less.  Also the final value fees are higher.  I am guessing they are higher so that large corporate sellers don't have too much of an advantage over small and medium sized sellers.  
I do feel that large sellers like Buy.com have way too many benefits and are destroying the integrity and feel of eBay.  They should have to pay the same final value fees and listing fees as everyone else if not higher so that small and medium sized sellers have a chance.  Remember two Amazon's are not possible. Each Company has to have its competitive advantage and distinct product offering.

So there are the changes.  I would say the main cons to the changes are:

-Increased Final Value Fees across the board during a recession!  Fees should be 7% for all auctions instead of 9% plus paypal fees.  Unlike Amazon which charges 15% fees to deal with buyers and transactions, sellers have to deal with all of the customer service and eBay changes and strict eBay and Paypal rules and it takes a 8-12 hour workday to please both eBay and the customers.

-To make things worse, Smaller sellers that sell less than 100 items a month cannot get into the Top Rated Seller program.  I say go back to the POWER-SELLER rules and make it $3,000 a month sales for TRS even if its only 1 item sold for that amount.  Also if you have feedback of 99.5% or above you should qualify for the TRS.  Also, what about making DSR's for international orders not count against the TRS and Powerseller status as customs and shipping and fraud are out of the sellers control.

-Another Problem I see are Increased fees for Smaller Basic Store and Auction Sellers if sales dont improve due to issues with Best Match or a flood of $.99 cent items.  

-Sellers should have more control of blocking buyers.  Now that you cannot leave negative feedback, its as simple as a fraudster buying or hacking into a trusted account that is not in use at the moment and bidding on or buying your items.  All transactions where a buyer changes the original address to an address in Nigeria, India or Malaysia for example should be automatically canceled and FVF returned to the seller instantly.    

- A HUGE PROBLEM is Increased competition for medium to larger sellers selling brand new products as now all BUY It Now items will show up and a flood of auctions from hong kong, china and the USA will also fill the marketplace.  How will eBay filter this to make the increased listing fees and store fees worthwhile?  All auctions that have 3 hours left or less should be put near the top for Best Match results.

- For Medium to Large Sellers, the Final Value Fees are quite high for nearly all products except for consumer electronics and computers.  All Buy It  Now products should have those same fees.  It's easier and makes selling a profitable experience.  12% plus 6% for most items is just too high when you include Paypal Fees and Shipping which eBay is pushing to be FREE FREE.  If all sellers offered free shipping then how would they be able to compete?  Also margins would be Bone thin.  We don't have Amazon's Wholesale buying power, Fulfillment Warehouses across the nation or setups with Shipping Companies such as FEDEX and UPS that make it nearly 50-75% cheaper for them to ship making free shipping a reasonable cost they can add to the price.

There has to be a way to make it fair for Medium to Large sized Sellers to either offer Free Shipping (reduction in FVF fees, with higher listing fees to not flood the marketplace of free shipping) or a fair shipping expense.  

A few small things I personally feel could change are:

FVF charged to Sellers after payment is received from paypal.  Saves the hassle of opening disputes.

Fraud Protection needs to improve, as too many sellers deal with nonpaying buyers or scammers from Overseas and hacked accounts.

I am also tired of all of the imitations and replicas I find.  If sellers from HK and China want to sell on eBay thats fine but selling a replica as authentic in my mind is illegal and just makes the quality of the eBay Marketplace drop.  I could probably name 100 sellers right now that sell fakes.  If I got a commission for it, I would probably deal with the issue myself.  

Give Small Sellers 5 Free BUY it Now listings at any given price a month.  Why not?  Increase quality of items available.

Some Last Tips for Small and Medium Sized Sellers:

Try to sell $3,000+ a month for lower paypal fees.  Also if you have good DSR's try to call eBay about the TRS Status.  I feel all sellers that seller 3,000+ a month deserve it and smaller sellers should get a ranking of their own if they give top notch service.

Operate two accounts, one Store account for Buy it Nows and one regular account for Auctions.  You will save a lot of money this way.  This is totally legal, stated by eBay employees themselves.

Use the eBay UPS shipping discounts if you are a powerseller, print all of your labels online or with a provider like Endicia, Stamps or Shiprush to save on shipping expenses.

Have packages picked up at your house when using USPS to save on gas.

List in unique categories to save on some of the over the top FVF fees.  (probably not allowed but eBay needs to lower some of the fees)

Use the free Pictures if you are a medium seller to get more views and gain more confidence with buyers.

Use Selling Manager Pro to your advantage, create automated emails, focus on DSR's and customer feedback, make sure to be honest and answer questions.

Use your Paypal debit card to purchase inventory to get 1% cashback on all business expenses including inventory and shipping if you use third party providers.  If not you can find credit cards that give up to 1.5% cashback on all purchases.

Build your own Web Site (Magento, Zen Cart, Interspire or Prestashop are well known) and use eBay and other online Selling venues to bring your business to you overtime.  

by: just a peon

@Ray

Wrong blog, sweetheart, lol

by: cindy

Did you all realize you lost your referral fees? Your power seller discounts ( I used to get 20% even tho I am just an A.S.S. and not a top tier seller).They are making this harder too so if you lose your power seller all together you can not have a premier or anchor store...just more higher fees. One customer who had a bad day can completely destroy your business. Right there that screws me out of about $60 a month in discounts. Only the non store subscribers get the $50 auction cap and the 100 .99 auction listing fees. Not us who decide to get a store or upgrade as is in my case (used to have 1000 items in my store but down to 600 now). Ok so we get increased visibility, maybe with the glut of junk coming in on the .99 auctions. But to make me pay more for my store ($35 more per month) and increased item listing fees ( an average of .02 on 600 items) well, you do the math. Oh and it's not a store, it is a subscription fee. I've been at Bonanzle for a year now. Not selling as much as Ebay, but it is steadily coming along. Christmas was very nice there. It's a fun place to be with chatting in your booth, a great sense of humor, a wonderful community and real people who actually give you real answers, not canned junk that makes no sense or no help. There's no auctions there, but most of my customers on ebay did a buy it now. My auctions sucked anyway.  I am slowly moving away from ebay, but will give it the few months and see what the searches bring. Cindy

by: Herm172

Ok. Like a lot of folks, I liked eBay and I am very sorry to see it go, but  I am now convinced it's over. For anyone on the fence. I have 10+ years on eBay (two stores; over 3000+ items). Closing one and starting to downsize the other. Opened an account on Bonanzle today and it couldn't have been easier. Already have 975+ items in my booth transferred over from eBay. Startup cost.. about 10 minutes in time and 10.00 payment. Next it's eCrater or something else, either way it's TIME. eBay won't miss us till were gone and I for one will be happy when they die a slow death and beg for us to come back. Enjoy what we had and move on!      

by: quiltworks

Terrible changes all around. Selling is all about finding items, and everyone of the changes will have negative effect on search: a flood of junk items under $1, addition of store inventory to search. I am very disappointed.
The cosmetic reduction in insertion fees will not offset all the other increase and degredation of search.

Quiltworks at
http://quiltworks-artsale.blogspot.com/

by: Greg

The following is taken from Thursdays homemediamagazine.com:

"Amazon announced profits of $384 million for the three months ended Dec. 31, up from $225 million during the same period in 2008. Sales were up 42% to $9.52 billion, compared to $6.7 billion during the fourth quarter of 2008.
For all of 2009, net sales increased 28% to $24.51 billion, with profits up 40% to $902 million, compared to $645 million in 2008.
For the first quarter of 2010, Amazon is expecting sales of up to $7 billion".


We all know where the buyers are, at Amazon!
I am moving to sell on Amazon, starting tomorrow!!

There is money to be made, and sellers certainly aren't making it at GreedBay!




 

by: Fruity

Again! I agree with Nora. Also there is something awfully fishy about how the Google news is suddenly not showing any articles have been published regarding ebay. I check google news every day with the keyword Ebay and this never happens. So either Google news has changed or this radio silence is orchestrated. I'm going to put all those that wrote articles on my red list. And all you journalists I'm watchin' you! You aint' gettin past me! lol

by: nora

In my previous post, I meant to say ...

Not to mention the forced Paypal fees for smaller sellers who CAN'T afford Merchant accounts.

by: Sam

Check out the comment from some guy by the name of Stephen, thanking Richard Brewer-Hay (aka RBH from ebay ink blog) for stepping in on the auctionbytes blog.

Seems this Stephen has a problem with the auctionbytes group (or ''gang'', as he put it).

Check his comment at the following link:

http://ebayinkblog.com/2010/01/26/ebay-seller-release-ann
ounces-fee-changes-stores-subscription-packages-buyer-protection/

by: Grrrrrrrrr

I am a power seller, I have a store with over 1000 items priced between $3-12, and no matter how I calculate this it adds up to a fee increase, not a decrease!  And I don't see how including my store listings in the core search results is going to boost my sales if they are doing the same for everyone! Especially when the flood of crap comes in due to the free listings for 99 cent items!  This is some sneaky bullshit as far as I'm concerned, a shell game they are playing to get richer off the people they're already sucking dry! They think if they find a way to call a fee increase a fee decrease that we're too stupid to realize when our bill has gone up?

by: TLS

@ Grrrrrrrrr

Try it until you get your first invoice with the new fee rates, then move over to Amazon, ecrater, Bonazle, ola, after you see if your rates ARE cheaper, once you see it on paper .

I am positive many sellers will leave ebay for good, once they see they're first invoice reflecting the new fee HIKES!

by: Jeremy

Hi,

I'm still trying to make sense of this convoluted ebay mess. Just wondering if some of you could clarify a few things for me to see if I understand this correctly.

1) If you have a Store, you have to pay for auctions starting at under $1, but if you don't have a Store, they're free?

2) There is still a store format to list in, the only difference being the new listing fee (dependent on the store subscription level you chose) and exposure in core search results?

3) If I chose the 49.95 store subscription fee, and I sell a media item in store format, say a book for 60.00 I would pay a 5 cent listing fee + 8% of the first 50.00 sale price and then 5% of the remaining 10.00 of the 60.00 dollar sale price?

Lastly, where can I find information on what they mean by:
NOTE: Starting in March, meeting the new minimum performance standard for all sellers will be a requirement for Premium and Anchor subscribers. (''Above Standard.'')

4) So if a crazy buyer slams my DSRs ebay could disqualify me from my premium store subscription and revert all my listings to the .20 cent per item listing fee?

Thanks for your input.

Regards,
Jeremy

by: Enough

This was the straw that broke MY back. Enough is enough eBay. To raise Final Value Fees in the middle of a recession – and worse, pawn it off as a discount, what were you thinking? How greedy can you get?

Pay Pal is making HUGE money and eBay isn’t broke. Rather than raising fees, did you never think of offering your sellers, the few that are left, a token of gratitude instead? Something for believing in your vision? You know, the one that’s so hard to see when you’ve constantly got us doing 360s?

What about an olive branch, something to help rebuild site loyalty? Some free listing days, 10% off Tuesday, a get out of jail free card (remove a neg fb card). Why not give rather than take for a change? And not to your shareholders, but your biggest stakeholders of all - your sellers! The ones who’ve spent the last three years holding on for dear life!

We believed in you; bought into your vision and did everything you asked of us... even when it meant less food on the table for our families. But now, you want to take away the few scraps that are left, and leave us nothing?

This is leadership? Shame on you eBay.

by: Ace

Hello! Is anyone Digging to the Core of the Changes? You Better Dig or Your going to be Buried in the hole and Dig into your pockets to make it out of the hole.

Ebay is Making HUGE Profits Each Year, 2008 was a bad year for Sales after June thru December and they still made a Huge Profits for the Year. So WHY The HUGE INCREASES????  Each round of changes Cost the Seller More and More FEES!

Ebay Advertises the Free 100 .99c listings But that is if you Do NOT Have a Store!

Ebay Advertises the .03c Listings (if you Purchase an Anchor Store for 299.95)
right now Stores are 15.95 with .03c listings. Thats an INCREASE!!!

If your doing Fixed Price items on the Core, yes you save money .35 cents down to .20 cents. But they want you to open a Store for 15.95 a month! Do you really need it?

Toss all the listings of Auctions and Fixed Price Items into 1 bucket!  Wow Thats a lot of listings bundled in one Search, then you do a search and you may bring up 1000's of the same item so the lowest priced items will be searched first (I change it to Lowest from Best Matched), so if you price your items to HIGH they will fall to the bottom of the Search and you just wasted your money listing the item!

Ebay wants medium volume sellers to Move to Premium Store for 49.99 with listing fees .05 FROM 15.95 and with listing fees .03.  That's an INCREASE!!!! $34.00 for the Store and .02 cents per listing!!!! and Oh you get Selling Manager Pro Free 15.95 Value hmm  NOT!  What am I getting for $34.00 More and .02 cents more each listing? and the FVF is STILL 12%.  So I have NO CHOICE how to Work my Business!!! And the new changes will Cost Me Money out of My Pocket on April 1, an INCREASE not a DECREASE!!

And what is SCARY: The INSECURITY you have If you Depend on EBAY for Income and List your items in a Store is that they are Raising the Bar for the DSR's and if you fail because of a couple of Non Satisfied Buyers (or another Seller wants to Screw with you) You LOOSE your Premium (or Anchor) Status.  After the 30 Days is up your listings will turn over to .20 Fixed Price if you Don't Stay on top of it and delete them (1000 items can go from 5c = 50.00 to 200.00  and then you have to list Auction and Fixed price items till you get your status back if Ebay will allow you to! NO SENSE of SECURITY with Ebay anymore!

If you sign up for the Premium or Anchor Store NOW by 2/16 as they are Advertising: If Your DSR's Do NOT meet the new requirements on April 1 you have 60 days (2 months) to bring them up to the New Higher Standards or you LOOSE your Store! Then you go down to Auctions and Fixed Price items again!

Here are my Numbers Crunched

3000 items x .03 = 90.00 + 15.95 Store = 105.95 Now
New changes:
3000 x .20 = 600.00 Fixed Price  +494.05 Increase
3000 x .20 + 15.95 = 615.95 Basic +510.00 Increase
3000 x .05 + 49.95 = 199.95 Premium  +94.00 Increase
3000 x .03 = 90.00 +299.95 Anchor  +284.00 Increase

To Break EVEN with what Im doing now I will have to Drop 62% of my inventory. And that is the Starting Fees out of my pocket before anything Sells.

1120 x .05 = 56.00 + 49.95 =105.95

Seller Discount and Referral Fees They are Discontinuing. That helped pay for my store!

Ebay makes Millions of $ Profit a Year, and Now they want to Increase Fees, It is time to Make some Major Changes this year and Move On.  

Bottom Line! Another SCAM to get your money!!!!  They introduced the Fixed Price last year and I thought they would get rid of the stores, and look where things are now. How easy for you to loose your store and have to do Auctions and Fixed Price. This is just an Easement into Ebay being Auctions and Fixed Price ONLY with only the HUGE Anchor Stores, Knocking out the Little Guy trying to Make a Buck or Making Ends meet.   If you want a Store,  there is No Sense of Security for the Seller to Keep it as they are Focusing on the Buyers Experience because they know the Seller will pay thru the nose for them to make millions!

Well this it for me with Ebay!  Website Here I come! I'm moving to Auctions8.com they have Auctions, Buy Now, they have Free Listings, Free Stores, They do have a Final Value Fee.   Check them Out!

The other one I will move some inventory to is Bonazale.com They do not have auctions but another place to put items. Free Listings.  Check them out!

If you planning to leave ebay, The bunch of Us needs to Move so that we can build the Community on the other Auction House!  

So After 10 years on Ebay:  Goodbye Ebay on March 30.  This Price Hike I'm Not Suckered into...

by: vendio_crystal

I spent a lot of time calculating how this change affects sellers, and its very discouraging to me to see that the folks that will be paying more are the successful sellers. Which means, those who have worked hardest (in most cases) to comply with eBay (free shipping) and offer the best product (learned best match) will be the ones who are paying the most with the new pricing.

This just blows my mind..

Some additional comparison charts:

http://www.vendio.com/vendable/2010/01/28/ebay%E2%80%99
s-announced-pricing-changes-affects-sellers/

crystal

by: Lyn

I would like to know the rationale behind ebay's determination of the final value fee.  That is affecting me the most.  I sell new children's clothing, and, when all is said and done, with ebay's listing fees, final value fees and paypal fees, and their always suggesting that the seller have FREE SHIPPING (so that they can get a percentage of shipping costs too), I feel as if I am working for ebay and not for myself.  I always ''share'' this frustration when ebay calls me with a suggestion about how I can make my ebay business better, but, of course, I am talking to the messenger.

Sorry to rant.

by: Mike R

When eBay changed the rules to NO more featured seller listings for us
pee-on's, I went from 400 listings a month to 50 listings a month. The featured listings, which I paid $25 each, drove my sales. Without featured auctions and enough sales to cover fees, I'm done... Gone...
Out of business.
Thanks to the schmucks who run ebay.
F U eBay.
Maybe someday you jerks will get it right.

by: bade

I've been listing on ebay for 14+ years and have submitted quietly to every fee increase and ugly change that they've made over that period of time.  This latest ruse is just too much.  I sell one of a kind art jewelry that I carve myself, only 4 to 5 items each week but I do quite well because I have built up a following of great loyal repeat customers.  I make a quality product that is very collectible and I always treat my customers like royalty.  I have 100% dsr's (even with buyers paying the shipping) and am a top rated seller.  Every way I've looked at it, the new changes will more than double my costs/fees to sell on ebay-paypal.  Thankfully I have a website that does some business also so I guess I will finally be saying so long and see ya to feebay come the end of March.  With paypal fees added to the flat 9% final value fee, that's nearly 12 percent of my hard earned money that they want just to list the same way I've been listing for over a decade.  Ebay, take some advice from a successful small business man, this is not the way to keep loyal customers.  I'm tired of you screwing me, now it's your turn...go screw yourself.

by: Fruity

Sam, I thought it was strange that comment he made. He's referring to doing this on the other Int'l regions?

"I can assure you that the decision to adjust the fee structure was based on feedback from sellers and the positive results from other markets that have already implemented these new fee options."

by: Allan Kraig

Look this has nothing to do with desrves or better values or anything about sellers .. This addresses only 1 thing & 1 thing only , KEEPING THE STOCK HOLDERS HAPPY!! That's it in a nut shell!! if it comes down to all things being considered eBay only considers one thing, how does it effect the stock!! That's it & that's all .. eBay stock holders are the queerest group of investors in the world, They set around over analizing every ebay related piece of news coming down te pike & they cheer like a bunch of high school girls every time the dividends go up? but why? The only thing that happens when the ratiio changes is in the old days Meg & now Donahoe gets a performance bonus .. Oh & keeps the dividends to spit among themselves or keep it off shore giving the carrot & stick effect like that some day eBay will split the booty with their investors? Crazy Bunch :) But what nobody has touched on here is what influx of asian goods this brings in the borders with out the scrutany of having any testing or safty requirements because it does come through the mail (millions of transactions a day) .. OK this is marginable but remember any brick & morter store inventory goes through stages before it is allowed to be sold here, but with milions of these little sales does is circumvents the rules of fair trade ... Now the best thing for eBay, when you buy from one of these vendors, your money goes off shore!! free from any taxes, free from any trade agreements free from all .. eBay loves this because all their take from these sales goes into their questionable off shore accts also so it's a slight of hand for them to also avoid any taxes, this is why Donahoe wants China's trade so much,  They garner an extra % of every China deal because they pay nothing to the goverment for fair trade in the country they live & operate in primarily .. It's a shell game & the house always wins .. ALWAYS ..