Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Mar 20 2013 10:22:49

eBay Fees: Simpler Doesn't Equal Cheaper

By: Ina Steiner

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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.

Auction Sellers
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.

Non-Store Owners
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.

Store Owners
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!




Comments (36) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Ric

Wed Mar 20 14:52:43 2013

We consider ourselves to be a small eBay seller.  We will be one of the sellers that will revise their listing strategy and will actually see our fees reduced.

We have a basic store and will continue at that level. We will not lock ourselves into the yearly subscription.

Up till now, we have been listing or re-listing between 5 to 7 items daily. At an average of 6 listings a day we would pay $36.00 in listing fees under the old fee structure.

It will be no challenge to reduce listing volume as we would remove our higher ticket items from eBay and list them instead on sites that are more seller friendly and allow sellers to actually make profits from their sales.

If we reduce our listing count to 5 a day, we will pay zero listing fees. We can put the surplus listing items into a rotation so they will drop out of search entirely for a few days which may actually improve visibility when the items go back up with newly revised titles.

So, we would save $36.00 a month on listing fees, minus the $4.00 increase for the monthly store subscription and save a minimum of $32.00 a month. Based on our monthly fees paid to eBay, that will amount to real savings for a change.

eBay must have screwed something up.... For once, this is an eBay fee increase which we can leverage to our advantage and actually lower our monthly costs.

We are waiting for the "gotcha" which will likely come when they realize we can actually save on fees instead of paying more.



Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: Massachusets Howler This user has validated their user name.

Wed Mar 20 15:27:36 2013

The GOTCHA is that they are further diminishing us in search- CASSINI- Ebay would not do this if they were not further planning on HIDING OUR ITEMS from buyers- sales are DISMAL!
MH

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Island_Sam

Wed Mar 20 16:46:45 2013

In my experience, these free listings only clog the marketplace with "Junk". Buyers have to wade through pages & pages of "Junk". Remember, the maximum number of items that can be shown on an ebay search result page is 200 items. A glut of "Junk" would place reputable sellers' items lower in the search results pages (Simple math to calculate this) AND, we all know buyers will only scan through the first 2 (Maybe 3 pages) to find what their looking for. It seems ebay is going for quantity versus quality.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: thehosst

Wed Mar 20 19:02:47 2013

I think eBay should teach buyers how to use the site to be less unfair and aggressive to sellers. Sellers have put up with eBay tricks for long but what really dis-encourage sellers is an abusive buyer.
I saw something about the seller policies, does anyone know how will that work? will those sellers polices be enforced in a case? will they show before opening a case to refresh the buyer's memory?  

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: Tiffee Jasso This user has validated their user name.

Thu Mar 21 00:25:28 2013

I like diversity and the offering of a huge amount of items from different sellers spread out over a category. That's what make for an exciting array of goods. Sure some of it is junk, but someone else might need or want that item that we think is junk.  The only real junk I have had to wade through on Ebay lately, is the Chinese sellers who take up page after page of the same thing using stock numbers or different user names. That gets aggravating in a hurry.  I generally call it quits and take off to the local mall or thrift shops. Especially, when you know that Ebay stomps on U.S. seller who try employing those same tactics.  

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Marie

Thu Mar 21 03:07:11 2013

"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?)"

I have no clue why Ebay suggest this method.  Just because something is in someone's shopping cart, it isn't purchased.  It is simply sitting in their cart.  To do this does nothing to help a buyer who is buying a little of this and that from a given seller over a few day period so they can combine shipping.  It could easily be purchased out from under them if they just have it in their cart.

It's an interesting problem and it will be interesting to see what changes with this policy as it gets closer and closer to being implemented on the site.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

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

Thu Mar 21 09:02:28 2013

I have two comments at this point.

1. For buyers who pay by cheque & money order, cash, first born, etc is it possible as the buyer to indicate "payment sent" which would allow the item to be marked sold.
After a suitable period of time, if the seller did not get the payment, instead of a "send unpaid item notice", the item would just be placed back for sale & life goes on.
Yes, it's a programming change (not too difficult for a competent systems analyst and a senior programmer team), but will mid-management approve?

2. Hows about eBay provides a "test your image" URL where you can have their bot (I'm assuming it is a bot, not active-DNA) give a thumbs up or down. OK bandwith problems? Set up a 1 minute or 10 minute cycle time per user. It will give you, the seller, an idea of what will work, and actually help eBay to keep image rejections down.
Again, this is a no-brainer programmatic solution.

3. Three? There is no three - I said two.

Peace....

PS. I'm available for consulting on the above ideas to eBay for only $250/hour. Cheaper than a lawyer nowdays.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: FREDDY This user has validated their user name.

Thu Mar 21 09:14:20 2013

@Tiffee.
Feel the same way re Chinese junk. Think there are just a few ( under 10). Each having 100 different names they go by. Very upsetting when you buy, they have USA as location, ships from China.  I had a bad experience from China - wrong item sent. Told to ship it back - cost more than I paid for everything. Left Negative - Chinese seller somehow had it removed and I was labeled a bad buyer because I would not loose  $21.00 on the transaction. (The 21.00 would be after my refund). No thinking on that one - just out of the original purchase price and shipping. Only paid $9.68 to begin with. What gets me is that they could have the feedback removed. Must have been one of JD's special sellers.
This new set of fees and regulations could spell doom for the ebay that was. Isn't that what was proposed years ago?? I guess it wasn't moving fast enough.    

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: FREDDY This user has validated their user name.

Thu Mar 21 09:19:49 2013

Another problem Sold an item via auction. Buyer notified me that they are interested in another item that will close in 4 days. Is it okay to combine shipping? So excited that I actually sold something - said sure no problem. I guess it wasn't really sold then because it wasn't paid for????? Would they allow the next in line seller automatically purchase it????
See nothing but problems.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: elpereles

Thu Mar 21 09:55:07 2013

I use the Free Listing Strategy. I returned in 2010 as seller in eBay to use the Free Promos. I don't worry about FVF. If in the future appears a big increase. It is just adjust the prices and go.

I'm not worry if someone let for hours or days stuff in a cart and loose them. I'm worry if eBay is going to charge the fee for every item throw in a cart.  

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: PowerSeller2007 This user has validated their user name.

Thu Mar 21 10:20:38 2013

Ebay does not care about small seller  store owners. They charge monthly fees and they packed the sites like sardines.  
Ebay is always gaming to max their profit. They dont care driving the bus overloaded with passengers. They dont care about  customers  satisfaction and maintaing ethical practices.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: PowerSeller2007 This user has validated their user name.

Thu Mar 21 10:55:37 2013

Karma hit ebay sites.  Someone at ebay research must be testing a neutron-like device to wipeout targeted sellers and the experiment went out of hand.  ebay w would surely keep the truth classified forever. we did not know that that  they would wipe out our listings if we reached the limit set by ebay for small sellers. Now we have the evidences ebay set the glass ceilings.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Marie

Thu Mar 21 10:57:16 2013

@elperels

"I'm not worry if someone let for hours or days stuff in a cart and loose them. I'm worry if eBay is going to charge the fee for every item throw in a cart."

With respect, this is not how a shopping cart works.  It's just a virtual version of a physical shopping cart you push through a B&M store.  

Do you create a sale at the B&M everytime you throw something into your cart or does it become a sale when you pay for it at the cash register?

Things sitting in a shopping cart on Ebay or any other website [Target, Walmart, Sears etc] are NOT sales for anyone.  There are no fees charged to any sellers accounts because it is NOT a sale yet.

A sale does not happen until the buyer commits to purchase the item or items.  


Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Marie

Thu Mar 21 11:02:54 2013

@powerseller2007

If you are referring to all the listings that disappeared yesterday it wasn't "karma" for Ebay nor is it funny in any way.  And it did NOT just hit small sellers.

Ebay had a serious glitch start yesterday and is continuing today.  Some sellers have had ALL their listings go MIA.  Without going into detail here as this isn't our subject, just know that this is a serious problem for sellers of many sizes.  Some sellers were put out of business for 24+ hrs.  Not all have been restored yet.

If this is a subject that interest you, there is another thread here on the subject.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: GoodK9 This user has validated their user name.

Thu Mar 21 12:21:55 2013

The problem I see (for us, at least) is that we generally only list higher value items.  Please note:  for me, anything that'll sell for over $50 is higher value.

Increasing the FVF isn't good for us -- more money for eBay and less for us.  And it's really not worth my time and effort to list lower value items  (as has been pointed out before, a lot of things don't sell and I'm only trying to list items I think will sell).

Generally speaking, if an item (or group of items) won't sell for at least $50, why should I list it?

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: GoodK9 This user has validated their user name.

Thu Mar 21 12:25:31 2013

And as a follow up -- if it does sell for $50, why in the world would I want to give eBay $5 from the sale?

Didn't mention this earlier, but we sell antiques & collectibles, most of which we purchase at auctions.  We're already having to pay the auction house a 10% buyers commission, so add another 10% on for eBay and that's 20% I have to add to the price we paid for an item.  Since we'd also like to make a profit, we have to add more for that.

Reckon it's definitely time to say bye-bye to eBay.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Marie

Thu Mar 21 12:30:23 2013

@goodk9

You need to run the numbers.  Don't assume the answer as it is more complicated that that. While absolutely higher priced items are going to have much higher FVF.  That is for sure.  But mid priced items are not.  In fact you will have LESS fees.

So you need to do your homework and make sure you make the best decisions you can for yourself and your business.

Just as an example.  Lets say you just sold an item for $50 and it was a BIN listing.

Current FVF would be $5.50
As of mid April it would be 4.50.

A gross savings of $1.00.

Sell a BIN at $75.00
Fee Now $7.00
Fee in April $6.75

A gross savings of 25 cents.

Sell a Bin for $100
Fee now $8.50
Fee in April $9.00

A gross loss of 50 cents.

Got to run your numbers.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

by: GoodK9 This user has validated their user name.

Thu Mar 21 12:36:48 2013

Thanks, Marie!

I reckon I'm just looking for another reason to leave eBay (and convince my hubby & business partner to do it).

We try not to do BINs and if we do, it's usually on stuff we just want to "go 'way".

I've already told potential consigners that anything I list for them needs to be higher end items.  Otherwise, they're going to be unhappy with all the fees and my commission .

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: Marie

Thu Mar 21 12:41:41 2013

@goodk9

But your higher priced items are the ones that are hit harder with fees.  If you stick with the mid range stuff, you actually pay less fees.

This is something I posted on another thread, but it may help here too as you need to look at ALL the fee changes.  You can't just look at one and decide what is best for you.  You need to look at store levels, the free listings, the listing fees for additional listing, etc.  You need to look at it all, run your numbers and decide what works best.

As of May first:

Basic Store
19.95 x 12 = 237.40
15.95 x 12 = 191.40
Difference    48.00

Cancellation fees per the schedule, you'd have to cancel your subscription with MORE than 9 months left on the contract before the cost would exceed the $48.00 savings.

Premium Store
59.95 x 12 = 719.40
49.95 x 12 = 599.40
Difference   120.00

Cancellation fees per the schedule, you'd have to cancel your subscription with MORE than 8 months left on the contract before the cost would exceed the $120 savings.

Anchor Store
199.95 x 12 = 2,399.40
179.95 x 12 = 2,159.40
Difference      240.00

Cancellation fees per the schedule, you'd have to cancel your subscription with MORE than 4 months left on the contract before the cost would exceed the $240 savings.

Perminate Link for eBay Fees: Simpler Doesn't Equal Cheaper   eBay Fees: Simpler Doesn't Equal Cheaper

This user has validated their user name. by: elpereles

Thu Mar 21 13:07:30 2013

@Marie, I know ''normal/common'' shopping carts you can throw anything in it and it doesn't create an order until the buyer complete the checkout even if you don't get paid. But it is eBay shopping cart. I can expect anything.  

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