Thursday, January 28, 2010

Poll: What do you think of eBay's fee changes?

Earlier this week, eBay sent this note to non-store accounts who sell with some frequency. (A few items a month for me.)

Starting March 30, 2010 selling on eBay will be a better deal than ever!
  • List Auction-style FREE--no Insertion Fees--when you start your Auction-style listing under $1.
  • Get new, lower Insertion Fees for all other start prices.
  • Either way, pay one easy Final Value Fee of 9% of the winning bid (but never more than $50)-and pay only if your item sells.
  • List in Fixed Price for 50¢, with Final Value Fees for the most part staying the same.
This new standard fee structure will replace the current "first 5 listings free"--you'll pay no Insertion Fees whenever you list Auction-style and start pricing under $1!*

Today, I learned that eBay store owners get a very different "deal" that adds significant monthly overhead. This change essentially kills the ability for some card sellers to make any kind of money. Read the White Sox Cards post on The Final Straw of an eBay Seller, excerpt below.

"Why would a company founded on the consumer getting the best deal, shoot itself in the foot at almost every opportunity in the past two years? I haven't been able to offer the best deal on some items for two years. Now, I can't even afford to keep the good fight going."

One angle is that eBay's trying to convert low-margin shops to "active" sellers, where ongoing 99-cent listings allow them to cull more frequent transaction fees. Another take's that they're trying to "clean up" shops that carry over-priced (and thus, under-selling) inventories, by upping the monthly overhead. (I'm thinking of hi-grade slabbed cards from the 1970s for $500.) The impact's not specific to sport cards, of course, yet this seems to impact us more than, say, iPod sellers.

Will this new policy change how you use eBay as a seller (or buyer)?


Joe S. said...

I only use it occasionally, and only for singles or lots starting at $0.99, so it probably won't affect people like me much at all. You know - the types with around 100 feedback ratings, far from the power sellers. Unfortunately, there's not a whole lot anyone can do about it... where else do you get such a large potential audience for your products??

Steve Gierman said...

Thanks for featuring my blog in this post. I'm far from a power seller, but I have a store to sell off cards that I end up not trading as a way to feed my itch for the hobby without dipping into my finances. It worked very well the first year and still worked to a lesser degree today. By eBay's own calculator, I would be losing money any way I choose to go, unless the policies end up not changing.

Dinged Corners said...

It people such as Steve (WSC) can't make a go of it, that can't be good. eBay's profit motive in this case seems very short-sighted.

Matthew Glidden said...

There must be a different scale they're applying to this decision. Perhaps Amazon stores are pushing them for sellers and profits? When eBay started encouraging sellers to use free shipping, that's the first thing I thought of.

Todd Uncommon said...

Still nothing beats eBay, as happy or frustrated anyone might be, for a couple of reasons:

- Traffic, traffic, traffic. Nothing gets more users, still willing to buy, to find your stuff. By comparison, everything else is a ghost town.

- Variety. Even if the card hobby suddenly found a critical-mass sales venue that maximized sales and had high traffic, you can't really cross-sell your old computer parts, or ceramics, or what have you. As a seller I've unloaded some great cards over the years, and unloaded a bunch of random junk in conjunction, thanks to eBay.

I wouldn't really mind the yet-again revised fee-structure, except for the fact that PayPal is the required way to pay, and you end up paying fees twice for the same sale, ultimately to the same company.

I just wish when eBay would make fee change announcements, that they were more descriptive about PayPal's role and relationship with that. It does no good to promote the fact that eBay now focuses on taking 9% of final value, when seems to jump almost to 15% when PayPal is factored in.

A pretty good rundown of alternative secondary markets can be found in a sidebar at the eTopps In-Hand Marketwatch blog.

Matthew Glidden said...

Thanks for your additional details, Todd. The adoption of PayPal (and only PayPal) was no doubt a big one financially. I've read the latest fee changes also play into eBay trying to meet stock market expectations, where our level of use might not even make a dent. :-P

Bruce said...

I figure I would give you a couple of free tools for selling on other marketplaces to compete against ebay fees - Calculate your selling price with the selling fees by profit margin or gross profit dollars for Google Checkout, Paypal and Amazon Marketplace.  Now you know what to charge a customer by using the following free tools, PayPal calculator, Google Checkout Calculator and an Excel sheet that you can download that will be an Amazon Marketplace fee Calculator.