|Wed Mar 20 2013 10:22:49|
eBay Fees: Simpler Doesn't Equal Cheaper
By: Ina Steiner
eBay is simplifying its fee structure, but as many sellers are learning, "simpler" doesn't necessarily mean "cheaper." Sellers who list high-value items will pay more, as will sellers who use a "free listing" strategy. But other sellers say the fee restructuring won't impact them very much or will have a favorable impact on the fees they pay to eBay.
Free Listing Strategy
One type of seller that has become more common in recent years avoids paying insertion fees. They simply use the 50 free auction listings and take advantage of any free listing promotions that come along. With no exception, fees have increased for those sellers - they are now paying 10% Final Value Fees instead of 9%.
A positive is that sellers can use their 50 free listings toward fixed price listings as well as auction format.
A major impact for auction sellers is the spread eBay is now requiring for BIN auctions. eBay will require Buy It Now prices to be 30% over the starting price for auction BIN listings.
Because eBay doesn't attract the frantic bidding of its early days, sellers can no longer start auction prices as low as they would like. I think this is going to be a big "ouch" for a lot of auction sellers.
Sellers who don't want a store and wish to sell in Fixed Price format paid 50-cent insertion fees. (They'll now get 50 free listings assuming they haven't already been running 50 free auction format listings.)
For those sellers, the category-based tiered commission fee structure is going away and they will pay a flat 10% FVF - this will result in higher commission fees for higher priced items.
Depending on what they sell, Store owners may see a fee increase or decrease. Each store owner must do the math themselves.
Anecdotally I've been hearing that Store owners need to do the math to consider whether it would save them fees to move up a peg - Basic Store owners may find it better to have a Premium Store, while Premium Store owners may find it better to have an Anchor Store.
Obviously each store owner must do their own calculations, because this is not true across the board. It simply demonstrates that sellers who are concerned about the fees should invest the time in exploring all of their options.
Fees Help Shape Seller Behavior
Longtime eBay sellers will remember the reluctance of former eBay Meg Whitman to offer free listings, and many sellers agreed because they did not want to see the influx of low quality listings that they felt would surely result.
By making free listings available to more sellers, some fear eBay will see an influx of "junk."
No company is savvier about its fee strategy than Amazon. For example, in the early days of Amazon's FBA service, it had to convince sellers to use its fulfillment service, but when it took off, Amazon could see that some stock was slow-moving, taking up valuable space in its warehouses. It introduced storage fees to motivate sellers to send only fast-moving inventory or smaller amounts of slower-moving inventory.
A recent Reuters article said sellers were considering defecting because of price changes Amazon had made over the past year or so. The article took a simplistic view and didn't take into account that Amazon is very deliberate in its moves. If it raises fees in a particular category, it could be because it wants higher quality items in the category, or perhaps it wants less competition for its own goods (unlike eBay, it sells its own goods).
Lots of Other Questions
Some sellers use product images to get attention on search results pages, but eBay is banning text and borders beginning July 1st. There are lots of questions about this policy, and unfortunately, many sellers aren't sure whether their photos are in compliance.
There is concern that a new policy (which I call ''It Ain't Sold Until It's Paid For'') will hurt some sellers who have customers that pay by check, or who take their time in ordering multiple items from a seller and who may find some of their items snatched away by another buyer. eBay suggested sellers encourage buyers to use the shopping cart. (Any comments about that suggestion?)
Many sellers wanted to know if eBay would continue to run free listing promotions.
EcommerceBytes has fee calculators to help you compare costs on eBay (current fees, not the new fee structure), Amazon and Etsy.
Here are a few interesting comments left in yesterday's blog post:
"You have to have an anchor store to get the 2500 free listings. Premium store gets 500 and basic 150. After that, the insertion fee is double what it is today."
"The biggest thing that will affect me, that I see so far is ''fixed price'' & ''buy it now'' staying for sale until paid for. This may affect my multiple purchase people. If they shop over the course of a couple days and then request an invoice with a shipping discount - they could lose an item or 2 while waiting. OR, if I'm out and they request a combined invoice but I don't see the request for a couple hours, they may be mad if they lose an item. Is the ''combined'' invoice feature going away?"
"For me, a large volume seller, it makes sense to move to an Anchor store. For others, It appears that eBay is putting the squeeze on the small time sellers and giving the big time sellers breaks."
"I originally planned to double the size of my store this year. But, like Tiques_N_Ties said, upgrading to an anchor store doesn't make sense. It appears I need to change the plan or completely reevaluate whether or not it is worth the effort."
"I wish eBay would get it through their thick skulls that everyone benefits when the site is effing *stable*. Nobody can make a business plan if they don't know how the site will behave next month. Not the small sellers, not the large sellers."
"I called customer service to ask a few questions. The rep didn't even know they had a new update--he's in Philipines and said no one had told him."
I am beginning to wonder if it is better for most of us to go to Amazon. With the price increases and less exposure with every whim of eBay, we would even be better off doing Amazon fulfillment. Amazon actually makes the people return the item BEFORE a refund is given. They do not try and bully you into giving the item for FREE and giving a refund. It is a FLAT fee, I do not think Amazon plays hide the pickle games for search results like eBay. And you sell a LOT more with Amazon. Now that is not to say Amazon is a walk in the park because they too have many issues but they do not make constant changes like eBay. I would like to hear what people that sell on Amazon have to say. The biggest down fall I see on Amazon is their very loose return policy. From my understanding, EVERYTHING is returnable even things that should not be."
Be sure to review all of the comments in yesterday's blog post, an eBay rep was in answering questions yesterday. And let us know how eBay's spring Seller Release effects you and what questions still remain!