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Wed Jan 3 2007 18:43:02

eBay Raises Fees for US and Canada

By: Ina Steiner

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eBay got the unpleasant task of announcing higher fees out of the way early this year, posting them on the Announcement Board today at 3pm Pacific. They aren't slap-in-the-face insulting this year, but higher costs are higher costs.

I broke out the calculator to see what the percentage increase is (it's impossible to give one number, since it's a tiered percentage structure), looks like it's just under 5 percent, and higher for items that sell at higher prices. You can check my math on the article I wrote for AuctionBytes Newsflash.

eBay Senior Director of Seller Development Todd Lutwak said the fees affect all of North America, and that Stores were not impacted by the fees. I was taken by surprise, but will indeed try to get an answer about any fee changes for the rest of the world. The announced fee changes for North America take effect January 29, 2007.

Do read Bill Cobb's full announcement, btw. It's full of hints of new initiatives to come.  

Comments (11) | Permalink

Readers Comments

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by: Terri F.

Wed Jan 3 22:18:34 2007

Well,this doesn't surprise me that Ebay is getting gready once again.It seems they are trying to push ALL small sellers out of their market place and cater to all of the larger sellers who pad Ebays pockets even more money and raise there profits.I am just getting by and at times am barely making it.As a stay at home mother and a disabled person who can't get a job on the outside world very easliy-Ebay 6 years ago started out as a way for me to help my husband pay our bills and just get by with our 9yr.old,now,Ebay is raising these fees even higher to knock out the small sellers.I know even more sellers will leave Ebay because of these fee hikes-It seems as though they don't care us at all.They should be having more listing sales,more often for sellers now to help with the higher costs.I think all of the small sellers should start there own auction site to run against Ebay.All of these higher costs will have to be put onto higher starting prices for items-that will only cost us customers in the long run and sales,too.Ebay needs to wake up and be there for the sellers and stop trying to raise the fees yearly on us for every little thing they offer.The things they offer the seller does not out weigh what we pay them already.I will be one that will be lowering my items down and evenually going to another website and off of selling totally!!Please,join me and take a stand to do the same!

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by: JJ

Thu Jan 4 04:22:46 2007

Nice one Ebay...Is this one of the most drawn-out suicide attempts in corporate history?

Are they doing to do the same with the UK?

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by: 0ctavia

Thu Jan 4 06:40:27 2007

Terri F there is a site you can check out where you'll find useful advice and information on alternatives to ebay, many (if not most) have no fees for listing. Visit and you'll find not only this info but also advice on spotting the scams and frauds which infest ebay.
Ebay can't go on indefinitely raising fees. I left them because it was getting to the point where I had to sell items I would rather have retained just to make the monthly fees - it all became rather pointless when it dawned on me that all I was accomplishing was greater income for ebay at the expense of my own pocket / food bill / heating bill.
When that's what it comes down to, there is no choice but to leave.

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by: Ina Steiner

Thu Jan 4 09:02:56 2007

Thanks for the comments. Two updates to my original post.

Rate of the Fee Increase
In calculating the percentage increase of the new fees, I used an example of an item with a starting price of $5 that ends with a winning bid of $50. Under the existing fee structure, sellers would pay a total of $2.41 in eBay listing and commission fees. Under the new fee structure, sellers would pay $2.52, an increase of 4.56 percent.

However, Wall Street analyst Bob Peck of Bear Stearns ran the same numbers and got a 6 percent increase. How? He factored in the relisting fee, because according to him, less than 50 percent of listings convert to a sale, thus an auction needs to list 2 times. Sound reasoning. So using his math, sellers pay a total of $2.76 ($2.41 plus a 35-cent listing fee) under the existing fee structure, and will pay $2.93 ($2.52 plus a 40-cent relisting fee, okay he's off by a penny).

I agree with Peck's reasoning, thus the fee increase is an increase for sellers of over 6 percent for items listed at $5 (actually any starting price ranging from $1 to $9.99) that end with a bid of $50. And it will be a greater increase for items with higher selling prices.

Fee Changes for Rest of World
eBay only announced fee changes for North America, so users in the UK and Australia and elsewhere are probably waiting for the other shoe to drop. Here's eBay spokesperson Catherine England's response to my inquiry about international fee changes. "Pricing decisions outside of North America may vary from country to country so there is no specific schedule." Sorry I don't have any concrete information, but it does rather seem likely there will be fee hikes in other country sites.

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by: TexasGonzo

Thu Jan 4 12:28:06 2007

I have a way to get the greed masters at ebay more money without it killing the small seller, Cut the CEO (Meg) salary to what she deserves, lets say 50 thousand a year, and then cut all of the other deadweights in management by a bunch.

I am sick of Meg and buddies making Millions off of our hard work

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by: Moshe

Thu Jan 4 14:19:55 2007

The question is are sellers really leaving ebay, or they just say they will. I keep reading people complaining they are leaving ebay but ebay keeps hicking the price, to me it sseems people are staying that's why they can do whatever they want.

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by: Diamonds On Fifth

Thu Jan 4 14:31:57 2007

Ina is there something we can do to stop this

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by: Frank Ross

Fri Jan 5 15:57:24 2007

I have been saying this a long time and I'm pretty sure I'm not the only one thinking this, but can't eBay please come up with some other way to generate business growth than by raising seller fees? I understand their need to maintain growth, but I would like to see some diversity. I suppose Skype is that attempt?

Even though the increases this year are minimal this year, they still are a cut that we can't exactly pass on to the eBay customers.  Furthermore, after last year's fiasco with the eBay store increase in mid year, there is no guarantee we won't get some nasty surprise waiting for us this July!

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by: Parrott

Sun Jan 7 03:48:21 2007

Yes - many of us are leaving eBay.  I've been in the prepping stages for a few months now - it's not an ovenight thing to build your own website.  I'm one of the smaller sellers with smaller dollar items that has been significantly impacted.  eBay seems to still be doing fine.  But let's wait until at least a year has gone by since the fee hikes last August (was it?) and give both the store sellers and now with the new hikes the auction sellers a chance to move on.  

Then let's see what Meg & friends say.

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by: FlossiesCloset

Sun Jan 7 05:21:58 2007

Why is anyone surprised? This happens every year. Ebay raises their fees, we all get up in arms and try to go elsewhere. Sure, there are plenty of other auction sites--the problem is they have no buyers!!!  I've closed my store, and now I'm through with auctions. After the last round of fee hikes, plus the entry of so many cheap, foreign goods onto Ebay, I began losing money.  I hate to leave the online auction business.  It was great to work from home--and work it was--plus, it was both fun and exciting, but I have to make a living. It's a crying shame that Ebay has turned into just a great big, online, big-box discount store.  It was once a wonderful community and a great place to shop and sell.  Good luck, folks.  My heart goes out to you all.

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by: ehkabong

Tue Jan 9 16:03:51 2007

Re: Ina's prior update of two comments, including WSJ analysis.
Announcement from eBay shows:
Insertion Fees
We're increasing the Insertion Fee for the $1.00 to $9.99 level from thirty-five cents to forty cents.
Final Value Fees
We're increasing the Final Value Fee for the $25.01 to $1,000.00 level from 3% to 3.25%.
Well, of course the increase looks small if the item gets a Final Value of $50USD. There is only a .25% increase to final value computation at this level. HOWEVER, thats only half of an equation that HIDES the EXORBITANT 14% INSERTION FEE INCREASE. The REASONING used in prior post (and WSJ)DILUTES THE TOTAL INCREASE on a percentage basis ONLY IF THE ITEM SELLS (at 1000% of its Starting Bid), no matter if at the first listing or beyond.
-That's my 40% (2 cents divided by eBays nickel increase every time I want to list an item from 1 to 10 bucks)!

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