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Tue May 29 2012 11:12:32

eBay Pondering New Tiered Pricing Model?

By: Julia Wilkinson

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eBay is apparently sending questionnaires to some sellers asking about a new tiered pricing model that appears to involve more complex tiered pricing for final value fees, but with no up-front listing fees. Some sellers are comparing it to Amazon's pricing model. A seller on one discussion board reported getting a questionnaire with the following suggested fee structure:

"...Please carefully review the eBay selling fees shown below. NOTE: If you are a Top Rated Seller, your discount will still be applied in addition to the fees listed below...

"Insertion Fee – the "up-front" fee that a listing site charges a seller to list an item for sale. Insertion Fees for the auction format are based on the listing price of the item and not on the estimated dollar selling price of the item.

...eBay Fixed Price Format...eBay Auction Format
(fee to list an item): $0
Other Listing Sites:
Craigslist: $0
Amazon: $0

Final Value Fee:
Final Value Fee - is the "cut" of the sale amount that a listing site takes after the item has been sold. This fee is based on a percentage of the selling price.
(fee due after the item is sold)

SELLING FINAL VALUE FEE
- Up to $50 - 12.0% of selling price
- $50.01– $1000 12.0% of the initial $50 + 7.0% of the remaining selling price over $50
- >$1000 12.0% of the initial $50 + 7.0% of the initial $50.01- $1,000 + 4.0% of the remaining selling price balance over $1,000

SELLING FINAL VALUE FEE
- Up to $50 - 6.0% of selling price
- $50.01– $1000 - 6.0% of the initial $50 + 3.0% of the remaining selling price over $50
- >$1000 - 6.0% of the initial $50 + 3.0% of the initial $50.01- $1,000 + 2.0% of the remaining selling price balance over $1,000

Craigslist: $0
Amazon: 12%"

~~~
What do you think of this proposed pricing model? If eBay's fee structure was changed to be more in line with Amazon's, where you pay only when you sell, would that make listing on eBay vs. Amazon more enticing to you? And what do you make of the comparison to Craigslist? In my mind, though Craigslist is free..it's a different animal than eBay...easier to sell large bulky items locally, but more legwork and more hunting down people, and people flaking out. Post a comment here!




Comments (32) | Permalink

Readers Comments

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Anonymous Annie

Tue May 29 12:02:45 2012

It's interesting that eBay is considering this approach. I'll watch with curiosity and healthy dose of cynical skepticism to see how it all plays out.

I can't help but notice the ''slight-of-hand'' and ''forcing-a-choice'' technique that eBay continues to use in their survey questions.

Of course, my cynical observations are based on an out-of-context survey question. I have no idea what the lead-in or follow-up questions may have been... nor the possible response choices.

In any case, from what I see, eBay is providing two options: An expensive option, and a less expensive option.

That's it, two choices... A or B... pick one. One is obviously ''better'' than the other.

I find it difficult to believe that reasonable people would be inclined to choose the expensive option, and the predictable winner between these two choices will be the one that eBay WANTS people to pick.

This in turn will help eBay to justify whatever plans they have... so that if anyone complains, they'll simply state: ''We asked sellers and this is what sellers want! We're doing it for you!''

Taken to the extreme, this same thing could be accomplished with the following absurd question:

-- WHICH DO YOU PREFER?
a) ''Flat Rate'' final value fees of 50% with no listing fee.

b) A sharp stick in the eye and having your fingernails pulled out.

Later, eBay would justify having 50% final value fees by claiming that it's what sellers ''wanted''.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: TrentDep

Tue May 29 13:49:59 2012

I'm confused...  The second option is well below the current structure...

I think I might question the authenticity of the quoted material... It just does not read like an ebay document :

The inclusion of Craig's List is pointless.

'' Insertion Fees for the auction format are based on the listing price of the item and not on the estimated dollar selling price of the item. ''  Why are we defining at what point in a listing's life span that we will base the insertion fee of 0.00 ?...

''Up Front'' and ''Cut'' when defining listing fee, FVF... Seems a bit out of place...

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: basset

Tue May 29 15:37:46 2012

Interesting! My question would be what would be the advantage of paying for a store? - the things that attracted me to an eBay store were multiple photos & the lower listing fees for fixed price. $.00 up front listing fee seems attractive, especially if you don't have any risk if the item does not sell. But why would we want a store at that point? Am I forgetting a perk? Buyers would still have access to our inventory with "view other items". Would eBay be willing to risk that "fixed" monthly income they get from us?  

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: This a joke, right? This user has validated their user name.

Tue May 29 15:45:10 2012

I would love 0 insertion fees and would list more on eBay than I do now. When I come out with a new product it is listed on Amazon and the other no insertion fee sites first, then it is listed on eBay. A lot of items never make it to eBay because of this.
Because of the eBay insertion fees I am listing less every week on eBay. The insertion fees weren't so bad when my STR was 40-60% but since it is down to less than 10% the insertion fees are ridiculous. I have thousands of items I would list on eBay immediately if the insertion fees were removed

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Ric

Tue May 29 16:42:18 2012

This is eBay and there is no doubt in my mind that there is a fee increase built into this scenario which is not detailed in the selections offered.

If eBay goes for this model I can see several other shoes dropping down the road.

Remember the announced "our lowest fees ever" included a slight of hand that resulted in the majority of eBay sellers finding themselves paying more than they did before the lowest fees ever were announced. So this model has a monetary benefit for eBay which will hurt sellers.

Sellers should be cautious with the no listing fee approach...If it is ever implemented, you can bet that eBay will ratchet up the pressure against duplicate listings even higher than they will be when the new no dupe policy goes into effect.

Further, I would fear that eBay would restrict sellers ability to list and re list slow selling items. I do not believe for a millisecond that eBay is going to give away unlimited free listings.

I would expect eBay to come up with some draconian policy whereby if an item does not sell from an initial listing sellers would be prevented from re listing that item for 30 days.

Another possibility is an up front fee similar to a store fee. eBay would limit the number of free listings, If a seller needed to place more than the initial allotment eBay will likely try to charge those sellers an up front fee.

I also see the significantly higher FVF on a sold item as further driving down auction listing volume. With the higher back end, why would sellers list items that might bring higher prices at auction, only to pay substantially more to eBay when the auction closes.

As always, sellers need to be careful with what they ask for as eBay never fully discloses the downsides to their proposals. They send out surveys that only detail the very tip of the iceberg in order to get enough positive responses that allow them to claim sellers asked for this, then they drop the hammer and crush sellers.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: Bidonmine This user has validated their user name.

Tue May 29 17:19:58 2012

I would be all in favor of a $0-listing fee with only fees on the back-end. Ebay would have to keep it inline with Amazon if they wanted to steal business. If all the are doing is giving $0 on the front-end but then sticking it to us on the back-end then it would not take any business from Amazon.
Either way, I would list more on Ebay but I would not take anything away from Amazon...  

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: 10 year seller This user has validated their user name.

Tue May 29 17:42:05 2012

With no fees upfront,  they won't have any liability when your items don't appear in search. It's legal protection. How can you complain about what you get for free. No promises. Take it or leave it.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: basset

Tue May 29 19:14:42 2012

@10 Year Seller
  You know, I wondered about that, too. The catch could be that our visibility would be eclipsed into "black" a bit more.

  BTW -On Craigslist, I know that some sellers re-list their no-cost  listings EVERY day for visibility.  

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: 10 year seller This user has validated their user name.

Tue May 29 19:23:16 2012

  @Basset
It would also add a ton of new listings which would further eclipse the bulk of listings.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: exdwh This user has validated their user name.

Tue May 29 19:51:55 2012

For those of us who use multiple-quantity listings with good sell-through, it's definetly worth paying the insertion fee up front.

However, if you're just 'parking' random junk on eBay in speculation, then free insertion fee makes sense.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Stockmiser

Tue May 29 21:18:43 2012

I got this survey - very long and tedious.  They had about 12 different pricing scenarios, all compared to other sites. They kept asking ''with these prices, what % would you list on each site''.  I believe the sites were based on ones you state you were using.

It seemed like pricing was only part of it.  They were also trying to figure out how much you were listing elsewhere and why.  Lots of odd questions where you rate each site under various criteria.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Ming the Merciless

Tue May 29 22:34:56 2012

If ebafia would expend some of its vast tax evading offshore resources on bringing more value to both buyers and sellers instead of devising still more complex ways of squeezing more money of out sellers, they would have a long solution.

Constantly raising fees is one symptom of management teams that lack clear and broad comprehension of the concept of long term viability.

Zero listing fees sounds like a good idea on its face but without limiting the number of sellers permitted to sell in each category like Amazon does will simply bury our listings even deeper in search.

Think about it. Zero listing fees. Two days of monthly visibility. Zero sales.

Is that really worth it?

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Al G

Wed May 30 08:57:55 2012

Please note - I'm not giving eBay any credit here, certainly when the decision (if any) to restructure their fixed price/auction model, but the survey was a little more nuanced than listing fees and FVF.

They are acknowledging competition publicly for one thing, and how the sellers use competition.

Another point was a question involving a choice between "Quality of traffic", "Assistance in filling orders & Shipping", "Stability of policies & prices", "Conversion Rate (list/sell ratio)".

They again are acknowledging some serious issues of late, i.e. policies. But notice, you are only allowed to choose one option which is important to you.

I'd love to see the raw data collected & see how the spin-meisters handle it.

Peace, love & rocky road.  

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: Ron This user has validated their user name.

Wed May 30 10:01:44 2012

I've never been in favour of low or no listing fees for auctions on eBay.

The problem is that the site is already overcrowded with product - people are already complaining that their items are not being seen in listings and for good reason, because often an item appears way back on page 10 or worse even when the auction is close to ending.

Having no insertion fee just encourages people to list whatever useless piece of "merchandise" that they may have, which in turn causes overcrowding.

Personally, and I know that it's been said often here, they need to split the site between new and used.  Then, a 0 insertion fee might be viable.

But that won't happen, because that's not what Amazon does.  I swear that there's not a single manager at eBay with an original thought in their head.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

This user has validated their user name. by: Al G

Wed May 30 10:08:24 2012

Ron -

There was a single manager (or managers) at eBay with an original thought.

Hint - 1995.

It was when the "professionals" from Bain showed up that things went downhill.

From benefiting the buyers and sellers and employees to just benefiting the upper curst (whoops - crust) of eBay "management".

Shareholders? Its a profitable company, why no dividends????

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: Ron This user has validated their user name.

Wed May 30 10:29:59 2012

Al,

The confusing thing about this is that eBay's stock price keeps rising.  I assume that this is powered primarily by the Paypal division, because I don't think that Marketplaces are doing all that well.

I guess that the one thing that Donahoe is good at is doing things that create the impression in the minds of institutional investors that things are going well.  

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: purplerose This user has validated their user name.

Wed May 30 11:31:53 2012

I might sound crazy, but I would be willing to pay *slightly* more in final value fees to not have to pay insertion fees.  I spend a lot of time researching what I think will sell vs what won't because I don't want to waste my time listing items that won't sell and being charged fees upfront for listing a low key item. I think the savings in insertion fees of non selling products would help to offset the extra fees paid when an item actually sells. Also, maybe they shouldn't make the free insertion fee unlimited?? Maybe so many thousand allowed per month?? That would be a interesting discussion of how many should be allowed. Once seller hits that amount for the month, then a different fee structure would be implemented, or is this making it too complicated??

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: JustTheFacts This user has validated their user name.

Wed May 30 12:28:53 2012

@Anonymous Annie
sooo funny and right on point!

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: gutspiller This user has validated their user name.

Wed May 30 12:52:01 2012

Ebay is already using this policy one some small Ebaysites (as the one I'm using). And trust me this is not a policy you want to see introduced. Firstly this policy only applies to non business sellers and only for auctions.

What has happened since this new rule was introduced:

* The marketplace is completely flooded with and endless number of auctions. Visibility becomes zero. As if there's been a free listing weekend 366 days a year.

* Bargains? Forget about this. The auctions are used as BIN's. If a seller wants £ 10 for an item he will list it at a starting price of £ 10. You hardly see any £ 1 auctions any more.

* And then there are the nutcase sellers. In the category where I sell there are few sellers that completely abuse this sytem. They just list their auctions (with high starting prices) for 24h where the auctions are automatically relisted if unsold. These sellers hardly sell anything so 99% of their items I see relisted over and over again for months in a row. Not just 1 item but hundreds. One of these sellers runs 600 auctions a day.

* Visibily become zero. Every week within the ended listings I see a few items I would have bid on. I just didn't see them between the hundreds of other auctions. I used to have serveral items on the first page of best match. And the same for the next pages. Now I'm lucky if I have 1. Since best match shows a mixtures between BIN's and auctions, the auctions press the BIN's down in Best Match. In the past I would mostly upload my listings between 20:00-21:30h when there are the most buyers online. Now I tend to evade these hours. On this part of the day so many auctions are being listed that my items just get burried.

Ebay was already in a downward spiral. When this policy was introduced it just speeded things up.

eBay Pondering New Tiered Pricing Model?   eBay Pondering New Tiered Pricing Model?

by: JustTheFacts This user has validated their user name.

Wed May 30 12:54:54 2012

Ric is very correct.

The FEW things you can ALWAYS count on ebay for is, out right  LYING, SPINNING the lies so much to make them APPEAR as "truth" and creating more ways to RAISE prices and RULES on sellers, causing them more stress and HEADACHES and ensuring they get RIPPED OFF even more by scammers.

ebay wants to BE Amazon but what ebay REFUSES to understand is that although people like me buy from Amazon, I do not like their ethics anymore than ebays and Amazon is VERY IMPERSSIONAL to buy from.  I feel like just an ORDER NUMBER there.

I do not look to Amazon for future buying once I get my websites worked out and leave ebay.

I shop there now because it is often easier while I continue to deal with the STRESS of ebay but I plan to buy from websites in the future and leave the venues all together because of how much I HATE THEM personally from my own experienece.

To me, shopping at indiviual webwsites is like supporting our MOM & POPS all over the country.

We all know how much we pay in FEES and the HIGH costs we pay because of UNJUST policies from venues like ebay and Amazon who make EASY for us to be RIPPED OFF.

So, my plan is to start ONLY buying from individual webwsites, NO sites connected to ebay, paypal, etsy etc.

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