Happy New Year From eBay - annual fee adjustment (PC for increase)

eBay announced it's annual fee adjustments (this year all increases!!) via an AB post here. that will be in effect starting January 30th.

In a nutshell there are two primary changes to eBay core (lots more in motors, but they transaction fees which many sellers craftily avoid already).

1. The listing fee for the $1-$9.99 is going from .35 to .40 (a 14% increase) for this tier
2. The FVF for the $25-$1000 (essentially everything > $25 is impacted)

The FVF is trickier to quantify than the 14% increase for the $1-9.99 tier.  The way FVFs work is a ramping up from near zero impact ($25) to the maximum impact ($1000- 7.95%).

To help illustrate this I put together this graph that charts (pink line with boxes) the ASP against the % increase (blue line with diamonds).  With this chart you can graphically see how the % increase of the fee change increases with higher ASP.

So the average eBayer with an ASP of $50 will see a 3% FVF increase.  The worst cases are:

• You sell items for $1000 - 8% increase in FVF. 
  
  • This will be rough on jewelry sellers, antique, art and some collectible sellers.  It will also have a material impact on categories in the $100-500 range such as golf, photo and computers.

• You sell items for $1-9.99 - 14% increase in listing fee.
  • This will impact the small trinket seller (of which there are many).  These items are pretty important to the health of the marketplace because they are a good safe "first purchase" for many buyers.  Many media categories fall in this ASP range as do cell phone/ipod accessories,

It's easy to look at these increases as a nickel here and a .25% there, but when you look at most seller's margins, a 3-8% increase in eBay fees is substantial.  Most sellers will pass this on to consumers in increased prices (core and S+H - watch this on the $1-9.99 items!) and of course as the eBay economics get more expensive, the delta between other channels (search, comparison shopping, Amazon) gets smaller and smaller.

Comments

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[George in the Jungle of eBay]

Ebay has killed itself: fee increase, competition from Amazon.. . and the stupid/ignorant buyer siding system. . with sellers No Longer able to tell about Bad Buyers!!!!

[therse lynard]

We stopped ebay 2 years back because of low profits. We came back 2 months ago. It has gone well/sometimes,if our items sell.
However If our item does not sell we loose double, the sale and the fees to ebay.
Ebay feels that if we do make a big sale it is big profits for us and take a percentage not considering our initial cost of the item ect.
There is a point of abuse here. Thank you therese lynard

[therse lynard]

We stopped ebay 2 years back because of low profits. We came back 2 months ago. It has gone well/sometimes,if our items sell.
However If our item does not sell we loose double, the sale and the fees to ebay.
Ebay feels that if we do make a big sale it is big profits for us and take a percentage not considering our initial cost of the item ect.
There is a point of abuse here. Thank you therese lynard

[Mark]

I have skipped selling on eBay for the past year in favor of selling on my own Web site. I decided to give eBay a try for the holidays again, and had about $1,100 gross sales. My items average $20 selling price. My profit was less than $150! The time I spent dealing with rookie eBayers doesn't come near compensating me for my time. Goodbye eBay.

[0ctavia]

$1-9.99 - 14% increase in listing fee - yet again showing that ebay are really out to ditch the small sellers. A few months ago ebay changed the goalposts on the stores in the interest of 'rebalancing the marketplace' now they (yet again) squeeze the little people who are mainly stay at home Moms and Dads, disabled or elderly people who are often unable to gain useful employment in the RW and often rely on ebay for their income.
There is another way, visit www.pheebay.com for information and advice on alternatives to ebay, most have fee-free listing, many offer gallery pics as standard (no extra cost) and with the continual increases in ebay fees the alternatives look more and more attractive.
Ebay can't indefinitely keep raising the percentage they charge in fees, it's already impossible to make any profit on lower price items and I begin to wonder if ebay wants any sellers at all since they are alienating everyone.

[Atul Verma]

Hi Scott,

Would you agree that the July fee increase was positive for the marketplace?

i.e. leading to better conversion rates, revenue/listing and engaing buyers

I would think this fee increase might have the same effect. Unfortunately, sometimes, the pain felt by a minority of Ebay sellers leads to overall benefits for the whole marketplace. Full Disclosure: I am only an ebay shareholder.

Your thoughts on this subjects are much appreciated.

Al