Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Mar 27 2013 09:02:43

Point Counterpoint: Are eBay's New Fees an Increase or Decrease?

By: Ina Steiner

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After eBay announced last week a restructuring of fees, sellers have been busy trying to determine how the new model will impact them and if they should change their listing strategy. eBay is offering more opportunities for free listings and, among other changes, will eliminate its category-based, tiered commission fee structure for non-store owners in favor of a flat across-the board commission.

eBay is focusing on the message of a simpler fee structure, while acknowledging that some sellers will see their costs go up when the new rates take hold.

So we asked our readers - is eBay's Spring 2013 fee change an increase or decrease?

The majority of survey respondents said it would be an increase (74%), while a quarter (26%) said it was a decrease.

In many cases, survey respondents explained exactly how the fee changes would impact them, and as you would expect after reading about the new fees, it depended on what they sell and how they sell it.

That leads us to today's feature: Point/Counterpoint. We asked two sellers to explain their views on this issue. An antiques and collectibles seller who uses the auction format exclusively explained in his "Point" column that his costs will go up under the new fee structure. And an antiquarian/collectibles book dealer explained how her costs will go down.

Many other survey respondents explained how the changes impacted them, and I've extracted a few responses below to provide a picture of how varied the impact will be on eBay's sellers.

"It depends on what you are selling. In the case of Coins and Currency the charge is 7%. This means that anything with a final value fee of $230.00 or less will cause a decrease in fees. Under $50.00 and it is a 4% decrease as we have a basic store. For other items that we sell (mainly Collectibles) we are in the 9% fee area which means anything under $90.00 is less, but anything past that amount we are paying more. Both of these scenarios include the free 150 insertions. It is kind of a mixed bag, but in our business we have an average price of $47.00 per transaction so it works in our favor for the most part."

===

"For me eBay's Spring 2013 fee change is a decrease. I have always budgeted 9% for fees anyway, because messing around with the sliding-scale fees was just too much effort on my part. I have a premium store, and am thrilled to now have 500 auctions and fixed-price items included every month. This will make me run far more auctions, hopefully generating more sales.

I also sell on consignment for other people, so having "free" insertion fees makes for less bookkeeping on my part. It will also allow me to run my clients' listings longer if they don't sell right away. Once the listing is written there is very little effort whatsoever required to keep using Sell Similar until it's sold. I'm very happy with the changes to the fee structure.

===

"For me it will be a definite decrease. FVF for fixed price store is going down in the category I sell. If I sign up for the yearly store my monthly fee remains the same, but I don't pay .05 per listing, and I can mix in auctions with no listing fee if I want. I've never had more than 500 items in my store at one time anyway, so I probably won't go over my allotted free listings. For the first time I feel good about a Spring Seller release!"

===

"It's a 1% increase for the kind of occasional things I sell (9% to 10%). I sell so infrequently now I can't get upset by this. However, on the flip side, I do enjoy having the listings be free, so I do save on upfront costs of things that do not sell. This way I can list something, and if I don't get the expected response or sale, I can just throw it away without any loss of money (even if it just is 50 cents or so), and for other items, just keep the listing active over and over at no cost. However, I really wish they would drop the FVF on the shipping cost. I *WILL NEVER* ship for free."

===

"Using eBay's provided calculator, I inputted my statistics as accurately as I possible could - even upgrading my store from Premium to Anchor my fees will be approximately $150 more a month (if I stay with a Premium store - fees will be approximately $400 more a month). Call it 2500 free listing if you want, but I still contend that NOTHING in life is free! :-(

Rethinking my business model has become a yearly and sometimes twice yearly process with eBay, but there is no getting around it - eBay produces the most traffic for selling antiques and collectibles on the web, my sales on eBay have consistently out performed sales in my own brick & mortar antique store every year for the last eight years. In real life comparison - my property taxes for my brick & mortar store have gone up more than my eBay fees. It's all the price of owning a small business in this economy."

===

"Actually, it is BOTH. It is a increase on some items and a decrease on others. Using eBays "Fee calculator", we found that the lower priced items (generally under $80) the fees went down, where the more expensive items $90-300 (the most expensive prices we have), those items the fees are going up. We based it on our Premium store we already have and with the 20% top rated seller discount."

===

"I'm a small seller on eBay, so I'm going to get hit with the 10% FVF on my listings. Since I sometimes list high priced items, that 10% is going to hurt. I also sell items on consignment - my consignors are not going to be happy about receiving less money."

===

"I am a relatively small seller. $10 more per month for store subscription. Double the cost of each fixed price listing for Good Till Cancel listings. This will definitely increase my eBay bill with little up side. Sure the 500 free auction or short term fixed price listings will be good, but not with the increases elsewhere.

If they had thousands of free listings per month, we would be talking a very great thing for many of the smaller sellers, like me. They just finished a 500 free listing promo. I wish they would have more of those promos. More free listings would be wonderful, but I will take what I can get."

===


Now, visit today's Point and Counterpoint columns, and then come back and weigh in with your views!




Comments (51) | Leave Comment | Permalink

Readers Comments

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This user has validated their user name. by: baconsdozen
Web Site

Wed Mar 27 09:50:19 2013

Spend the money you'll be giving ebay on developing your own web site.
Then just use the odd listing to try and drive traffic to your site.
Ebyas fees are too high,you can sell the same product cheaper on your own site and still make more profit,they are just middlemen.

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by: racecarguy This user has validated their user name.

Wed Mar 27 10:17:40 2013

It does appear that eBay is trying very hard to drive away the Sellers who offer the things that are usually not found on their competitor Amazon's site.

The ''I bet we can find one of those on eBay'', the rare or hard to find collectible, is no longer important to their growth, even if it does bring more people to their table.

It would seem that this would be a strong selling point for eBay, a place where you can find ''anything''. There is no question that eBay is the spot to sell this type of item, but there is no need to make the fee for selling exorbitant. That just drives Seller's with this type item towards regional Auction Houses and away from eBay.

Ah, well.

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by: FREDDY This user has validated their user name.

Wed Mar 27 10:37:45 2013

Bottom line is ebay needs money. That first and also the increase in listing helps to show that site is doing better to wall street investors. This would explain all the free listing promos they have had in the past couple of years. Now they have a permanent way of so called free listings. Corporations need to make money - ebay is no different. They had to analyze this from every angle and they feel this will make them more money.
Customers should be number 1 with any company.  ebay and I am sure there are others, that put stock prices ahead of everything-thus higher year end payouts for top execs. This only is a short term way of doing business as it will surely fail. ebay will fall. I am sure of that. The execs will be paid nicely and when ebay gets sold, broken up - they will also be rewarded. JD - other top execs & the board are just doing the job they were hired for. They are doing a good job for themselves and wall street people - however they have ruined a wonderful idea that turned into an extremely profitable company.  

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This user has validated their user name. by: Nolle

Wed Mar 27 10:39:24 2013

@bacondozen - that used to work, but not as well since ebay started cracking down hard on outside-ebay transactions. the best I can manage is a coupon for my website with each shipping notice email.  it drives some, but most still come from the search engines and pinterist.  i've also found any kind of paid advertising to not be cost effective - at least for me.

cost of a website is minimal - customer acquisition is the real cost.  that is really what we pay ebay and amazon for - the buyers, not the software.

the new fee structure is almost a wash for me, but it will probably encourage me to list more since i can list a few hundred more items for free.

i think it's been clear for a few years that ebay is moving most of it's fees to the back-end. sell thrus have been sucking, so this reduces the seller risk. makes sense.

they have also been trying to encourage the regular-sellers, those that always have hundreds of items for sale.

the small timers have been getting hit on every end.  if I only sold a few items a month, i don't think it would be worth the time and effort to sell on ebay.  and i also don't think ebay cares one way or the other.

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by: PowerSeller2007 This user has validated their user name.

Wed Mar 27 11:00:55 2013

as expected, ebay touted this as savings to many... Losers.. So they remain losers..  For the winners, ebay want them  to join the group of losers.  The goal... All sellers loses.  Ebay is only winner.

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by: Will This user has validated their user name.

Wed Mar 27 11:15:53 2013

Very shrewd of eBay, to have this round of fee changes be good for some, and crappy for others. There would have been a huge uproar, if fees increased for all. Like always, they're sitting back, collecting the fees, and watching sellers fight amongst each other over who's right and who's wrong.

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by: auctionguy This user has validated their user name.

Wed Mar 27 11:31:50 2013

I am a small ebay seller, have been for several years. What I see with every ebay change is that it ends up costing the sellers more, and their new rules make it more difficult for the sellers. One thing is for certain about the new fees: ebay has analyzed the fee structure carefully to make sure they will make more money, otherwise they wouldn't be changing it. What they might not be investigating is the number of sellers that leave ebay with each fee increase, thus losing sellers and income. I am currently researching alternatives to ebay, and am finding a lot of good information on this web site.

Too many sellers are getting fed up with the ebay ever-increasing fees and their principles. The seller almost always gets taken advantage of whenever there is a dispute. It is way too easy for a buyer to file a claim and get a full refund, even without returning the item purchased. A buyer can leave negative FB for the seller unfairly (item not returned, but buyer still wants a refund and leaves -FB if you don't give them a full refund, or wants a partial refund because they claim the item is not as described, etc.). The buyer is always right. The seller is always wrong.

It used to be fun to sell on ebay. Not any more. Ebay keeps raising fees and losing sellers. I see this as the start of the death spiral of ebay. As the other online web sites get more popular, ebay will no longer be the de facto online marketplace that it has been, and will probably disappear completely, or at least respond to the competition and start treating the sellers better. Without sellers, ebay would be nothing. Ebay doesn't seem to realize this.

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This user has validated their user name. by: WOODJUNGLE! ON EBAY

Wed Mar 27 11:35:09 2013

My fees are actually going to go down once I move to an anchor store.  The reason for this, I believe, is because when they started taking a cut of the shipping fees, my fees went up 35% since my shipping costs are so high.  Since they are dropping FVF in my category by 2%, this is big for me.  In essence, they are just giving some back to me but taking it from someone else.   Their net gain, no doubt will be  an increase in fees to Ebay.

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by: minnie This user has validated their user name.

Wed Mar 27 11:44:57 2013

For me, the new fees will save me money.  I have a premium store, with approximately 425 fixed price listings, so I currently pay $49.95 + $21.25 = $71.20 .  With the new fees I can list up to 500 auctions/FP for that $49.95.  I list in the Collectibles category, so my FVF will drop to 10%.  

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by: Frank F This user has validated their user name.

Wed Mar 27 11:52:16 2013

It appears that my fees and costs will go down if I upgrade to a anchor store, BUT (and its a BIG BUT) visibility is the REAL key and my main issue.  

My Buy it now listings seem to get zero visibility anymore these days in best match with none in the top 1000..  And its odd when they had the free auction listings and I get invited - I list the same items at the BIN price (as the starting bid price) and my stuff sells like wildfire so I know its not my products, listings or price.  

However, I noticed something yesterday that was really interesting.  Best match, which seems like its static as it has had the same BIN items at the top of the list and the first couple of pages for months now with auctions showing up as they are ending.  It looks like ebay reset best match yesterday as the top items were not the same as they have been for the last several months.  What is really unfortunate though was that my auction listings were not even on the first page when they were all ending and I got NO SALES at all..  

This is what is really creeping me out about going forward with an anchor store as why have a bunch of listings and pay all these upfront costs if you are going to be INVISIBLE to the buyers......

And one more thing, I went to listing analytics to see what it had about my listings and category search and it was unavailable (said system error try later).  Thats really odd as I have been using it for about 12 months now and its never been down, and its almost like ebay took it down on purpose as they had reshuffled best match.......  WTH ebay - what in the world are you guys doing.  Best match has a bunch of junk from Hong Kong, Korea and China sellers that are ALWAYS at the top of the list.  I guess its mainly because they sell super cheap and I noticed that they are doing variation listings to bunch a lot of different items together (so they get more impressions, clicks, sales and watchers...) and thus are winning on best match.  But the items they are sellinglooks like a clearance bin at Dollar General - LOL! And that is probably what is driving the buyers away too...  Shame on you ebay when high quality items have no visibility and would sell if they had and you would profit more in the end.

Anyhow sellers, check your search you use for your items and I am sure you will see what I mean about the same BIN items being pegged at the top of best match (although you may see the reset I mentioned after yesterday).  Hopefully the auction 'invisibility' in not a long term thing but it might be with all these free auction listings coming our way with the spring update....

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by: JustTheFacts This user has validated their user name.

Wed Mar 27 12:04:34 2013

I do not think ebay is trying to run off small sellers at all. In fact quite the opposite.

I think ebay is now trying to get them BACK!  I think that the tide of FLEEING DIAMOND sellers and little sellers is now being felt hard.

ebay of course made the little and medium sellers foot the bill for their sweet deals to the diamond sellers, who used ebay like a rag doll and paid NOTHING to do it and are leaving ebay in the DUST and as a mad memory.

Most diamond sellers realized how BAD FOR BUSINESS it was for them to sell on ebay because the customers are so HORRIBLE and DEMANDING and felt no shame in ripping them apart in FB and DSRS.  They know in their own B&M sores they NEVER have to deal with customers like they do on ebay, and they certainly do not let them post FB on their doors and windows.

ebays Diamond deals broke the backs of the little sellers who had nothing to lose by leaving and they did. They also killed and ticked off many medium sellers as well, and they also left.

So now the only ones left to pay for EVERYTHING is the medium sellers who hung on, and in order for ebay to get the little sellers back, they are once again coming to the medium sellers to PAY FOR IT!

But here is ebays problem.  They are gonna lose even more medium sellers as a result of the hikes, and they are not going to get the little guys back either because the BAD BUYERS are still flooding the site and ebay is still doing NOTHING to stop it.  The FB and DSR system is still just as rotten as it was, and sellers are still being hurt by it, and now with the HUGE fee hikes, the financial HARM to sellers from it is going to be even greater.

Small sellers cannot even afford to come back even with lower fees and free listings because the BAD buyers will still eat them for lunch.

Until ebay REALLY addresses and DEALS WITH the bad buyers and the FB and DSR system, ebay will continue to SINK!

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This user has validated their user name. by: iheartjacksparrow

Wed Mar 27 12:19:49 2013

@JustTheFacts

I totally agree with you. About once a month I get an urge to list some items on eBay to use up the free listings I'm allotted. Then I remember that I'd have to deal with all the crazy buyers, which were bad enough when I left in 2008, and are probably 100 times worse now. Unless eBay deals with the on-going problem of scammers I don't see how they are going to reclaim all the sellers who they've alienated.  

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by: Wire This user has validated their user name.

Wed Mar 27 12:55:00 2013

Just wait, once everybody gets an Ebay store, they will rates those rates even more.  Be smart, go your own website and dont look back. Send an flyer with every ebay order telling the customer about your website.

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This user has validated their user name. by: CraftNut

Wed Mar 27 13:10:52 2013

@minnie
You will actually save a little more than that.  Since FP FVFs are dropping too.  That is another additional 2% on both the item and the shipping.

@wire
Well they should for at least a year if you sign up for the subscription.  With that you lock yourself into a year's rates and cancellation fees if you opt out before the contract ends.  So protecting the rates is yet another good reason for the subscritpion.

---------------------------------

Overall the new fee structure is a huge increase in fees for any seller that averages selling stuff over $85ish.  Anyone below that cand save money providing the take a close look at those store fees and benefits to pick the right one.  

It is also important to consider that the FVF on auctions for store owners is going up by 1.5% on the product.  It is staying the same on shipping.  

Lots of things to consider when going with what you think is going to work best.  You can't just look at the auctions or the FP or the stores.  You need to look at all of it to figure out what works best for you.



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by: edneff This user has validated their user name.

Wed Mar 27 13:15:24 2013

one surprise is that if a premier store list over 12.500 a month they pay more. eBay must have side agreements with the large stores

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by: bluegrass This user has validated their user name.

Wed Mar 27 13:43:50 2013

Kudos to Tom Cardaropoli on his excellent explanation of how this fee increase will devastate the mid to high-end auction seller.  There is no possible way that ebay management does not realize this impact…they cannot possibly be that clueless.  If reading this doesn’t make them understand, nothing will.  So that leads me to believe what they are doing is purely intentional…for the sole purpose of increasing income.  The huge gamble they are taking though is will auction sellers in this category once again take another huge increase in fees while still trying to remain profitable?  The big difference this time is the huge, staggering, and unrealistic increase they are imposing on all of us auction store owners.  At least in the past the increases were high, but not completely unrealistic.  This time what they did though is simply beyond the pale…so much to the point that it will ruin many seller’s business models that have been so successful on ebay.  I for one will definitely be looking for other outlets to sell high-end items because this change devastates my business model.  They are taking a calculated risk that the fee revenue they receive from this raping will offset the revenue they lose when the seller exodus begins.  A pretty big gamble if you ask me…but then many executives only live for the present trying to make their regime look good to investors.

The bottom line what needs to happen is that a credible auction alternative needs to rise.  Until that happens, ebay will feel free to rape and pillage their sellers with absolutely no remorse.  The time is so ripe for a competitor rise that they would make a mint from the mass exodus that would take place from ebay.  Listen up disgruntled ebay executives and developers who would like to build their own empire.  If you guys could get a core group together to develop an alternative, you guys would make a fortune.  You could restore the online auction experience to the place where it once was before ebay destroyed it.  If nobody is thinking about this, you definitely should be.  I know many sellers are just waiting for this to happen and now is the critical time in history to make it happen.  If ebay goes through with this increase, I believe it will be the pivotal moment to make this happen.  NOW is the time for you entrepreneurs to put your plan in action.  Then and only then, can all of us sellers that ebay stabbed in the back finally say adios to this self-serving, uncaring, corporate bully.

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This user has validated their user name. by: CraftNut

Wed Mar 27 13:59:04 2013

12.5 what or did you mean 12,500.  Is that FP, Auction or a combination?

**************

With a premium store under the new stuff, you get 500 FB free.  Any kind of listing.  Let's just say they are all FP.  

If you did the one year subscription and listing 751 FP listings, your base fees would increase.  If you didn't do the one year subscription, you would see a base price increase at 651 FB listings.

That does not take into consideration the reduction of 1.5% on the FVF.

Some sellers need to look at moving from a premium store to a anchor store.

$ 59.95 Basic Premium store
  0.00 First 500 listings
140.00 next 1400 FB listings
199.95  Total

$199.95 Anchor Store
  0.00 2500 free listings.
$199.95  Total

Anchor store would still offer you another 600 free listings.  Again this is ONLY considering the base prices, nothing more.  You can save more with the one year subscription [$10 on premium & $20 on anchor].  

You need to however look at your FVFs too.  For anyone selling anything over about $85 your FVF is going UP.  It is nuts.  These fee changes are significantly negatively impacting a hugh number of sellers.  

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by: mindelec This user has validated their user name.

Wed Mar 27 15:04:33 2013

i don't understand how the "counterpoint" decrease view is figuring her listing fee will be a nickel.  a basic store will go up to .20.  is she saying that all of her "antiquarian" books were published after 1970 and therefore in ebay's catalog?

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

Wed Mar 27 15:10:05 2013

I have a different take on ebafia's targeting of mid and high end item sellers with these obscene, unconscionable fvf increases.

First these fee increases will do nothing but drive sellers away. I'm moving a substantial percentage of my inventory to a venue that welcomes and values quality items and honest sellers.

What the schizophrenic Ho appears to be doing is creating a venue which clearly favors mass produced, inexpensive merchandise -- you know, like the kind you see at flea markets. This would seem to be the exact opposite of what Ho said he wanted when he started his dysfunctional disruption.

Second, ebafia is obsessed with reducing their energy and server costs.

One of the intentional effects of constantly tweaked Best Match is to perpetually lower what they think buyers see as less desirable items.

While "less desirable" might be accurate with some items, substantially fewer buyers give mid and high end items those "impressions" that ebafia's mindless algorithms are looking for.

So these high quality items sink further and further in search with progressively fewer potential buyers ever see them, and search is so shoddy that it won't display items buyers are looking for.

Ebafia has simply decided their bottom line is better off by eliminating sellers who sell high quality, more expensive items.

They'll continue to con Wall Street with all the "free" listings which will compensate for the loss of their best quality items, and ebafia will save on energy and server costs because they'll no longer have to host these "less desirable" high quality items.

What this means to all you sellers who'll see a fee decrease is that many of your items will sink lower and lower in search and become invisible if they're not bought/won the first two or three listings.

Nobody wins here. It's a long term losing strategy for ebay that none of the current (where are my stock options?) management won't be around for.

Small sellers selling the now apparently desirable cheap merchandise are going to get squeezed out by Ho's favored Communist Chinese.

Those selling high end merchandise will leave. Those that currently have no plans to do will as soon as they see their first bill or raise the prices significantly which will mean fewer and fewer "impressions" with each listing and a slide into search oblivion.

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by: JustTheFacts This user has validated their user name.

Wed Mar 27 15:49:38 2013

My guess is that ebay is trying to compare their fees to Amazons.

ebay is taking 9% while amazon takes 15% so with ebay logic, they are still cheaper.  But again as it has been said before, Amazons fee includes processing fees, ebays does NOT include paypal, which is 1.9-2.9% for domestic and another 1% for international plus .30 for every invoice.

Then you have to figure how much more traffic Amazon gets than ebay.

Then you have to figure in how ebay treats sellers items.

ebay is constantly messing with searches and burying sellers items but still charging them the same fees.  Amazon does not do this.

So, when you look at the fee increases and even the decreases for some, you have to ask yourself, how much will it really cost me to sell on ebay.  When your items go INVISIBLE, does it really matter that you are getting 500 or even 5000 free listings, if NO ONE can see them it doesn't matter because you sell NOTHING and still have to pay your store fees.  And even if you manage to sell a little, the extra FVFS will take back what little you did make.

If ebay would put the search back to the old way and LEAVE IT ALONE, then it would make it a lot easier and fair for everyone and the risk of just paying ebay and not selling anything would decrease.

So, if you compare ebay against Amazon FAIRLY, you find that Amazon is actually cheaper and you should make a LOT more money.

This is why I am planning to go to Amazon as well as stay with my own site and the other venues and leave ebay all together.

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