Ebay hikes their fees. Again.

We know this is not denim news but many of our readers love Ebay and this definitely will affect the availability of quality, authentic denim on Ebay, as well as those of us who sell on Ebay. Check out the email we just got from Ebay (our editor is a PowerSeller):

Seller Update: Fees, Rewards & Standards
eBay buyers want value and selection from sellers they can trust–and good sellers deserve rewards for delivering great customer service. PowerSellers rank among the most successful eBay sellers and we’re proud to recognize and reward your contributions to the success of the eBay marketplace. That’s why we’re making a number of important changes that may affect you:

Reduced Listing Fees
You asked, we listened. We’re reducing Insertion Fees and adjusting Final Value Fees to lower your up-front cost to sell on eBay. You wanted free Gallery, now you’ve got it–plus more feature discounts.
Lower Insertion Fees
Free Gallery picture with every listing
Lower fees for Gallery Plus, Picture Pack, and Feature Plus

Rewards for great sellers
There will be discounts and incentives for those who satisfy customers best. Who decides who gets rewarded? Customers do, by giving sellers high Detailed Seller Ratings (DSRs). You get:
Fee discounts for PowerSellers
Unpaid Item protection for PowerSellers
Expanded seller protection for PowerSellers from PayPal
More search exposure through Best Match

Feedback Changes
Significant changes coming soon will increase buyer confidence and showcase good sellers.
Buyers will only be able to receive positive Feedback. (Ed. Note – wait, WHAT?! What about deadbeat bidders?!)
Positive repeat customer Feedback will count and Feedback more than 12 months old won’t.
Negative and neutral Feedback left by the buyer will be removed for transactions in which a buyer doesn’t respond to the Unpaid Item (UPI) or if the member is suspended.

For more details on how these changes may affect your business, attend a special Seller Webinar at 10:00 a.m. this Friday, February 1. You may also see announcements from eBay executives on the Announcement Board.
~~~~~~~~~~~~~~~~~~~~~~
Here’s the problem. Check out the final value fees and how much they go up:

They are offering some discounts for PowerSellers with good feedback or DSR scores over a certain level but we are not sure exactly how they are calculating that score – how can you tell if your fees are even correct on your invoice at that point? This is going to drive a lot of sellers out of business. You can read more about Ebay’s impending doom, er…. fee changes, here.

Thoughts? Guess we are going to start seeing more people posting their authentic denim in the HonestMall as opposed to Ebay.

Editors note: I used to sell denim on Ebay for a living, full-time but due to Ebay’s constantly raising fees and invoices at over $600 per month, had to quit doing Ebay so heavily. This is not good for the Ebay marketplace.

29 Comments

  1. I’ve been selling more on ebay lately and the fees are too high already!! If your item doesn’t sell you still get charged, there are A LOT of unsold items on ebay!! I think there should be NO final value fee at all, you pay to list your item, why should Ebay get ANOTHER cut when you sell it??

    Also a non-paying buyer is a NON PAYING BUYER, WHO CARES if they respond to the NPB dispute??? If they don’t pay they shouldn’t be able to leave feedback!! I just had a buyer who refused to pay then she responded to the NPB dispute and she just gave me a NEG, she NEVER PAID, according to the new rules I will still have the neg just because she responded to the dispute.

    A NON SHIPPING seller should also not be able to leave feedback!!

  2. In response to Infinite42, the title is about raising their fees because the amount they are raising the Final Value Fees far surpasses any little bit of savings they are giving sellers by lowering other fees like the insertion fee (a whopping 5 cents).

    Also the part about buyers not being able to receive a negative is absolutely ridiculous. The number of nonpaying bidders is going to skyrocket.

  3. You (again) forgot to mention not having to pay for Gallery any longer. On unsold items, a $.35 savings on that and a lower insertion fee is more than a “little bit of savings.”

  4. “You asked, we listened. We’re reducing Insertion Fees and adjusting Final Value Fees to lower your up-front cost to sell on eBay.”

    The title should read, “Ebay manipulates cost to reel in gullible sellers. Ebay wins. Sellers and Buyers lose.”

    There is absolutely no benefit to sellers, or even buyers. The end-cost negates any and all up-front selling cost. Once the item is sold, final value fees will be higher than before. The extra cost will also be passed on to buyers through shipping and handling expenses. It’s essentially a blow below the belt.

    If Ebay truly wants to lower cost, price reduction needs to be reflected in all areas across the board–lower insertion AND final value fee. Their new policy does not work mathematically, one variable drops while the other variable increases negates any and all lucrative benefit.

  5. Infinite – I did mention the no fee for gallery in the original post. However, if my calculations are correct, and I don’t claim to be a math quiz, but before the price increase, the FVF fee on a $100 item would be $3.75. Now after the price increase, it will be $4.81. So that $.35 discount off the gallery still means an increase of $.71 per $100 item. And the fact that they are not allowing sellers to negative buyers means sellers scores could dramatically decrease (and they may or may not qualify for any discounts available) but buyers will stay at 100%. I have to agree with strawberry shortcake. This is just a ploy to make customers think they are getting a better deal when in fact they are not. Ebay is losing money and trying to make up for it somewhere, as usual.

  6. Holy cow, a business – trying to make a profit?!?! The nerve!

    Math whiz, no one – at least I didn’t – disputes that the fee for a sold item will be higher. What you and strawberryshortcake seem to miss is that lower upfront costs mean the number of listings will increase. As a “casual” Powerseller, the next time I put some listings up, I’ll finally have enough of an incentive to list those 5-10 items I never end up listing because I’m unsure of whether they’ll sell.

  7. The real killer here is the feedback policy change. What is the purpose of having feedback if all you can leave is positive?

  8. interesting discussion. i think that the title is overall accurate.

    so every pair of $125 jeans sold on ebay costs the seller $7.69 in fees. (not including paypall)

    that is quite a bit it seems.

  9. Exactly. My point is now people will list items higher to make up for the additional fees, and sellers profits are less which drives more of them out of business. It will essentially drive prices up closer to retail on Ebay and you’ll see fewer “deals”. And yes the feedback policy is insane, we are going to have tons of nonpaying bidders now.

  10. I am not sure I like the fact that feedback is only based on the last 12 months too because I’ve worked for years on my reputation & seller feedback. Now its all for nothing, basically.

  11. I agree w/ blm that is just ridiculous!!!!
    if they don’t answer to the unpaying bidder notice the neg or neutral will be removed????? that’s ridiculous!

  12. I have to say though- lower insertion fees (even it is 5 cents lower if I start an auction under $10) free gallery gives me a huge incentive to list more items than I usually would. However, this is coming from a small time seller. If I don’t think an item will sell then I don’t usually post it…however, now I WILL… and I’ll eat the FVF just to have it out of my hands. eBay is just as equally a business as the people that sell on there, and this is their way of reeling more people into selling on the site as Infinite42 mentioned.

    I would have to agree with everything strawberryshortcake mentioned otherwise… each aspect will need to be lowered if eBay really wants to do us a favor. So obviously there’s a catch involved, how else are they going to meet their quarterly goal?

    They base a lot of their facts on numbers. If they’ve decided to change their feedback system based on these numbers, they must think that it’s a pretty dismissible percentage of deadbeat buyers that do respond to UPI disputes, have buyers remorse and scammers that do the whole bait and switch. They aren’t looking to please everyone, just you know, the larger percentage of the population.

  13. “I’ll eat the FVF just to have it out of my hands.”

    interesting.

    – It’s actually not that interesting. Ebay has long been known as essentially the world’s largest garage sale. At a garage sale, you just want to get rid of stuff.

    And that point also partially addresses Our Editor’s question: “What’s the point of selling on Ebay if you are going to let the FVF eat up all your profits?” Not every seller is an ebay professional! Thus, not every seller is necessarily looking to maximize his profits!

    Also, as far as “the point of selling on Ebay” if the FVF will “eat up all your profits” – if sellers stop selling, please tell me where all the vendors are going to go to hawk their wares. Not everyone is going to set up a brick-and-mortar shop, pay for a table at a flea market, build a website, or sell on various online classifieds – and those that do certainly won’t get the same kind of audience that ebay provides them. Without ebay, there would be a lot of sellers making no profit at all.

  14. Well. Honestly it all depends on what you’re selling, and if you need to sell it for a certain price in order for the profits to be worth listing it.

    As I mentioned, starving student here, a lot of items I may list have smaller values but have a decent reselling price. Some items I own I don’t even care for what it sells for, but as long as I can make a few dollars off of it after all the fees, awesome.

    Say I have an item that I bought for $3.00 and list it at 9.99. It sells for that same $9.99, and shipping is $2.00 but I add an extra 1.00 to cover partial fees.

    Insertion fee based on 9.99: $0.35 cents
    FVF: $0.87 (8.75% of 9.99)
    PP fee: $0.68 (based on 2.9% 0.30 of $12.99)
    Total fees: $1.90

    $12.99 – $1.90 – $2.00 to ship it = $9.09
    That means I just made $6.09 and I can eat dinner for another day.

    *** Some people will not sell an item if their profits will not be more than a certain amount because it’s not worth their time to list, package, ship it. I, however, am not one of those. ***

  15. Infinite – it would be pretty funny if you do work for Ebay. 😉

    But as you said, “Without ebay, there would be a lot of sellers making no profit at all.” Agreed. However, due to Ebay’s almost annual increases in fees, I was a full-time Ebay Powerseller who had to quit selling FT and “get a real job” because I couldn’t afford the fee increases. I was not a garage sale seller. I know they (Ebay) need to make a profit but its gotten to the point that their greed is driving many people away, and driving prices up. Its hard to find as good of “steals” as one used to on Ebay anymore because people are listing higher to cover the fees and make sure they turn a small profit, thus making some people’s prices near to or the same as retail prices. Yes, there are other options for selling out there – maybe they don’t have the audience that Ebay has – but they are free. (Cough cough, HonestMall!)

  16. Here is how my math worked out on a $70 sale.

    Old New
    Insert $2.40 $2.00
    Gallery .35 N/C

    FVF $1.31 $2.18
    $1.46 $1.57

    Total $5.52 $5.75

    Fixed or Auction Type Sale Fees Increased 4%. I’m not happy about that at ALL, but in todays world I think it’s par for the course. I would love to only have had 4% increase in gas prices lately. Here in FL our Home Owners Insurance has skyrocketed and a 4% increase doesnt sound that bad.

    If your business cant withstand a 4% increase, you might want to look at your buying price or selling price….

    The part that will help the powersellers is the 5% or 15% FVF Discount based on CSI (the star rating). The discount would bring it down to where it was before.

    If you take advantage of the referral program you can save a few dollars as well.

    I think ebay is trying to ease the pain on unsold items. Granted they are going to find a way to raise the prices and make more money. (I thought thats what we are in business for…)

    I like most business people do not want all my eggs in one basket and would love to find a site that could produce a good buyers for designer jeans and I was hoping this site would be the site but the mall has been unfriendly to me…

    I see Dave commenting on all sorts of threads but not in mine or answer my PM. He nor his voluntary mods have been able to help me list in the mall. By the way I think this is great site Dave, I just wish it was easier for me to use.

    Bottom Line is until someone builds a better mouse trap than Ebay we are stuck with Ebay like it or not.

  17. secretangel, I was actually responding to Dave’s one-word response to you.

    At any rate, I think my point has been reinforced quite well by wcnfl and by the apparent ebay employee on the HF thread on this topic. You’re really giving yourself an incomplete picture of the pricing changes if you’re looking solely at the increase in FVFs and ignoring what is actually the effect of all the changes taken together.

  18. As much as change sucks when you’ve accepted things one way, Infinite is right. Think of how many items don’t sell through. The costs associated with those items are lower, with the free gallery and reduced cost. I would like to hear more about the reduced PowerSeller fees also. I think that’s a very wise move.

  19. Infinite, take a look at the times of our posts. My response was not in defense to yours, if you notice, it was an agreement.

  20. I thought you just typed SUPER fast! Oops. Perhaps it’s time to call it a night.

    Nah, I think I’ll keep trying to convince people that the effect of these changes will have results directly OPPOSITE to what they think will happen.

    And a final note to Our Editor – I know you have a vested interest in seeing HF/HM prosper (and we all should like that to happen as well, I suppose), but let’s try to be realistic. It’s not a viable option for sellers to flock to en masse.

    I truly believe you’re underestimating the quantitative value of what such a wide audience brings. The HM is a very specialized market – what of the other sellers? Is everyone going to opt for fragmented smaller message boards on which to sell?

    Then what happens BECAUSE OF the smaller audience? The sellers have even more fierce competition than they already do on ebay since there are more of them in a tinier spot! Talk about a real way to drive sellers out of business…

  21. wcnfl- easy man. you pm’d me at 10.30 at night. i read your pm at 2.15 am. and responded this morning at 6.45am.

    we should revisit this post in a few months and see what the response is. it would be interesting to see more people using the lower entry fee to unload stuff, and eBay befitting because of the higher fee in the end.

  22. Umm….I’m curious but what are ebay’s REAL hard costs as a company? All they do is host a site really….even paypal does most of their disputes for them….Sure, they have people who work for them doing the security and a little VERO, but I think ebay makes TONS of money….how are they losing money like someone else mentioned?? I would think they could lower their fees by an overall 50% and STILL make TONS of money. I mean Yahoo had a 100% FREE auction site for a while….how can one company offer a free service and another be so expensive?? I think ebay is a monopoly company now…

  23. guest – i definitely agree with you, ebay provides a service…so their cost of goods sold is naturally lower than those companies that provide tangible goods (i.e. – nordstrom or best buy). Consequently, ebay is able to realize a higher margin on their product (service). Increasing the fees is, indeed, making their margins even greater, but then again, it is a business and they are in it to make money. oh well. i’m not thrilled with the changes, but my reasons for being unhappy have more to do with the feedback issue than the listing/FVF costs.

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