|Tue Aug 2 2011 20:12:53|
eBay Messaging on Fees Not Really that Simple
By: Ina Steiner
An alert reader from Europe pointed out an error in eBay Australia's notice about fee changes. eBay wrote in the announcement under the heading Changes to non-Store fees: "Final value fees will increase from 5.25% to 7.9%, capped at $49.95 for each of the first 30 listings per month."
However, the reader pointed out that the current fee structure for non-store sellers is structured in tiers (tranches). On eBay's charts it states that sellers pay: "5.25% of the initial AU$75.00 plus 2.75% of the initial (AU$75.01 to AU$1,000.00) plus 1.50% of the remaining closing price (AU$1,000.01 - closing)"
The reader said, "eBay is not telling the truth by stating that they up the fees from 5.25% to 7.9%. They simplify things to their own advantage. Now the common perception is that eBay will increase their FVF with roughly 50% (from 5.25 to 7.9). And that is completely not true! FVF has almost tripled when you sell a AU $500 item."
eBay made similar changes in the UK recently, stating it was moving to a "simpler" commission structure to make it easier for sellers. eBay UK said it was "simplifying the final value fee structure, making our pricing more transparent," then added, "Fees will decrease overall for many sellers, but may increase for some." The British newspaper The Independent called the change a "massive rise in fees" that was squeezing small firms out of business.
The Australian newspaper The Age also wrote about the hardship the new fees were causing sellers in that country, called it a doubling of fees on some auction listings that "effectively penalized non-professional sellers." The newspaper said it was told by eBay Australia that the fee change was not a revenue raising exercise - because it offered non-store owners free insertion fees.
Ironically, the fee "simplification" makes it more difficult for observers to characterize the fee changes. A consumer organization told The Age it did not know whether the changes would be beneficial for consumers on balance because it depended on whether the money they saved on insertion fees was more or less than the increase in the final value fee.
It isn't just eBay's fee structure that has grown more complex both domestically and internationally. Its policies also vary depending on the country site. Our alert reader pointed out that when listing on eBay.com the difference between starting price and BIN must be at least 10%. On eBay UK this must be at least 40%. On eBay Australia no difference is required. "You get a note in red while listing to this effect. I find this very cumbersome and incomprehensible," he said.
Selling on eBay these days has changed dramatically, and sellers need to keep up with the changes and proceed carefully.