Get Smart about Business Spending
- Related Stories
-
eBay posts big jump in fourth-quarter sales
January 15, 2002 -
Yahoo auction observers see dive after fees start
February 9, 2001 -
eBay follows Yahoo's lead with auction fees
January 16, 2001 -
Yahoo to charge auction fees, ban hate materials
January 2, 2001 -
eBay users miffed by new fees
August 20, 1999
"We recognize that price increases directly impact our users, so we do not raise fees lightly or without considering the impact to our community," the company said in a note to its customers.
The company also will begin charging for its popular "Buy It Now" feature, which allows bidders to purchase an item immediately without going through the bidding process by paying a fixed price. eBay also will change the way it calculates fees on Dutch auctions, in which sellers offer multiple quantities of the same item in one auction.
The new fees will go into effect Jan. 31.
Although eBay earned $25.9 million in the fourth quarter and has some $1.7 billion in cash and investments, the company needs the additional fees to help maintain its marketplace and to keep the company on a sound financial footing, eBay spokesman Kevin Pursglove said.
He said the lack of any real competition to eBay and the company's goal of hitting $3 billion in revenue by 2005 wasn't a major factor in the decision to increase fees.
"This is being done because it's in the best interest of eBay as a company and eBay as a marketplace," Pursglove said.
A few Wall Street analysts reacted positively to the news, saying the increase could raise eBay's revenue by 10 percent or more.
"Although fee increases never sit well with those sellers who bear the brunt of charges, we believe the vibrancy of the eBay marketplace will allow the company to implement this pricing change without a significant decline in its number of auction listings," Prudential Securities analyst Mark Rowen wrote in a research note Thursday.
Transaction fees
Though eBay is not raising its general listing fees with this increase, it is raising its transaction fees, which hit all sellers whose auctions close with a winning bid.
For items that end with a winning bid of up to $25, eBay will increase its take from 5 percent of the final price to 5.25 percent. For items that end with a winning bid of up to $1,000, eBay will charge the new 5.25 percent rate on the first $25 and will increase its take on the next $975 from 2.5 percent to 2.75 percent. On items that sell for more than $1,000, eBay will charge the same way, but will increase its cut on the amount over $1,000 from 1.25 percent to 1.5 percent.
For an item that sells for $150, a seller would pay eBay a transaction fee of $4.75 under the new rate plan, compared with $4.38 under the current one. For an item that sells for $1,500, a seller would pay $31.88 under the current rate structure and $35.63 under the new one.
Buy It Now and Dutch auctions
Introduced during the 2000 holiday season, the "Buy It Now" feature was offered by sellers on 45 percent of the listings on eBay's U.S. site in December.
Although it previously offered the feature for free, eBay will now charge a 5-cent fee on most auctions that offer Buy It Now.
Sellers who offer Dutch auctions could also see their fees go up sharply. Currently, eBay charges fees on the total value of all the items sold in a Dutch auction. So, if a seller offered 10 table tennis paddles that sold for $10 each, the seller would pay fees on the $100 total.
Under the new rate plan, eBay will charge fees on each individual item sold in a Dutch auction. In other words, the seller would pay a fee for each $10 paddle.
Although the aggregate sales price of Dutch auctions is often high, the individual price of each item listed within the auction is often fairly low, meaning that because of the change, eBay will be able to collect its higher transaction fees. On the example above, the change would mean the difference between paying $3.13 in transaction fees and $5.25 in transaction fees.
Motors and reserves
eBay will also raise fees on its increasingly popular eBay Motors site. Sellers will soon pay $40 to list a vehicle on eBay Motors and $40 when they sell a vehicle through the site, up from the $25 eBay now charges for each.
The company is also increasing fees on some auctions that set a reserve price. Sellers who set a reserve can refuse to sell an item unless bidding reaches a secret, pre-set price. eBay introduced a fee on the feature in 1999, upsetting many sellers at the time.
eBay will leave unchanged its fees for auctions with reserve prices less than $200. But for auctions with reserve prices of $200 or more, the company is doubling its fee from $1 per auction to $2 per auction.
The rate hikes will also affect some sellers on eBay's international sites. eBay will apply all of the same fee increases on its U.S. site to its sites in New Zealand and Singapore. Meanwhile, sellers in Australia, Canada, Ireland, Sweden and the United Kingdom will see increases in their transaction and reserve fees.
"These increases will help us continue to build a vibrant marketplace by allowing us to invest heavily in technology, marketing and customer support, making it possible for millions of people to discover and use eBay," the company's statement to customers said.
Customers react
San Jose, Calif.-based eBay increased its listing fees last January between 5 cents and $1.30 on most items. The increase came days after Yahoo, its chief competitor, announced that it was introducing its own fees.
Yahoo's listings proceeded to plummet soon after its fees were implemented, but eBay's fee increase had little effect on its own listings.
The same could hold true this time around.
eBay power-seller Bob Miller, who lists some 4,000 stamps, postcards and other items on the site each month, figures the new charges for Buy It Now will cost him up to $200 each month. Noting that the feature helps reduce the duration of auctions, thereby reducing eBay's overhead for each auction and increasing the company's sales, Miller said he was disappointed in the new fees on the feature.
"Why should we have to pay to help them?" said Miller, who lives outside Salt Lake City.
But Miller said most of the other fees seemed reasonable and he didn't plan to complain directly to the company about them.
"I'm not upset enough to actually do anything," he said.
Donna Pelletier, a part-time eBay seller from Harrisville, R.I., said the new fees seemed fairly reasonable, but the company needs to do a better job of fixing problems that crop up on its site.
Pelletier, who auctions about 35 to 70 items a week, said while she's not totally happy with eBay, she's been selling on the site for almost five years and doesn't plan to stop now.
"There's nothing out there right now to compare to eBay," Pelletier said. "Somebody said the other day that it's like being stuck in a loveless marriage. You have to put up with some things. You can't go crying about everything that happens because it's just not going to do any good."
T. Green
T. Green
Ebay is not just increasing fees by 60%. Some feels will now cost sellers as much as 500% of what they used to. For example, "buy it now" used to be a flat 5 cents. Now, for an item over $50 the fee is 5 times that, 25 cents. That is a 500% increase.
Final value fees are going up at about 70%. For example, the final value fees on a $100 sale under the old schedule would be $3.37 but under the new fees it will cost the seller $5.75 which is just about a 70% jump.
To keep an "ebay store" has been a flat $9.95 fee but that will go up by 60% to $15.95. The saddest part of that is the items in the eBay store do not show up when a buyer searches eBay.
It is all just a big fat ripoff by a company that you can't even reach by phone to discuss a problem. Ebay is fat and sassy and GREEDY.
My Mother is 80 years old and sells indian-made jewelry on eBay. Has been since 1999. But she's on a fixed income and I figure she'll have to tell eBay where they can stick it.
Ebay is not just increasing fees by 60%. Some feels will now cost sellers as much as 500% of what they used to. For example, "buy it now" used to be a flat 5 cents. Now, for an item over $50 the fee is 5 times that, 25 cents. That is a 500% increase.
Final value fees are going up at about 70%. For example, the final value fees on a $100 sale under the old schedule would be $3.37 but under the new fees it will cost the seller $5.75 which is just about a 70% jump.
To keep an "ebay store" has been a flat $9.95 fee but that will go up by 60% to $15.95. The saddest part of that is the items in the eBay store do not show up when a buyer searches eBay.
It is all just a big fat ripoff by a company that you can't even reach by phone to discuss a problem. Ebay is fat and sassy and GREEDY.
My Mother is 80 years old and sells indian-made jewelry on eBay. Has been since 1999. But she's on a fixed income and I figure she'll have to tell eBay where they can stick it.
We are also eliminating the buy it know and place a link on the ad to send the viewer to the store.
We pay eBay around 2000 a month for listing and selling fees.
If one million sellers do not use for one month the Gallery and the sellers list and average of 1000 items! that means ebay is going to loose 350 Million dollars per month.
Remember Everything is numbers 1000 items X 0.35 = $350.00 per seller so 100000 sellers X$350.00 =$35,000,000 Dollars X 12 that is 420 Million dollars a year and that is only 100000 sellers!
I am doing my part I won't do gallery anymore.
If they see a drop in their buttom line$$$$$$ perhaps they will reconsider.
Jay
We are also eliminating the buy it know and place a link on the ad to send the viewer to the store.
We pay eBay around 2000 a month for listing and selling fees.
If one million sellers do not use for one month the Gallery and the sellers list and average of 1000 items! that means ebay is going to loose 350 Million dollars per month.
Remember Everything is numbers 1000 items X 0.35 = $350.00 per seller so 100000 sellers X$350.00 =$35,000,000 Dollars X 12 that is 420 Million dollars a year and that is only 100000 sellers!
I am doing my part I won't do gallery anymore.
If they see a drop in their buttom line$$$$$$ perhaps they will reconsider.
Jay
I've heard and read so many Ebay sellers say that they don't agree with the increases but will stay anyway because there just is no other auction sites out there that compare with Ebay, and there isn't and will never be until there are as many sellers on another site offering as many different things as there is on Ebay now. It is the sellers that are making Ebay. There wouldn't be near the buyers there if they didn't know that no matter what they searched for they will find at least one if not hundreds, it's not the same on the other sites so the buyers go to Ebay. But if the sellers moved to a different site in huge numbers the buyers would move along with them! It's as simple as that.
As long as the majority of the sellers continue to shrug their shoulders and go on letting Ebay reap the profits of their hard work while they struggle to make a profit at all, Ebay will continue to raise fees and add new ones. That is until the buyers realize that they can get their items cheaper at different sites because the fees are cheaper and start looking around and finding the hundreds of other sites that charge so much less that Ebay. Wake up people!
I've heard and read so many Ebay sellers say that they don't agree with the increases but will stay anyway because there just is no other auction sites out there that compare with Ebay, and there isn't and will never be until there are as many sellers on another site offering as many different things as there is on Ebay now. It is the sellers that are making Ebay. There wouldn't be near the buyers there if they didn't know that no matter what they searched for they will find at least one if not hundreds, it's not the same on the other sites so the buyers go to Ebay. But if the sellers moved to a different site in huge numbers the buyers would move along with them! It's as simple as that.
As long as the majority of the sellers continue to shrug their shoulders and go on letting Ebay reap the profits of their hard work while they struggle to make a profit at all, Ebay will continue to raise fees and add new ones. That is until the buyers realize that they can get their items cheaper at different sites because the fees are cheaper and start looking around and finding the hundreds of other sites that charge so much less that Ebay. Wake up people!
Protest started by www.midwestmediadvd.com
Protest started by www.midwestmediadvd.com
- by primeonly27 May 26, 2009 11:23 PM PDT
- Yes the fee's have gotten to be too much as the sellers are paying for Skype. When a CEO leaves it goes in the toilet for a reason. The CEO made a big mistake and they just needed to flush her down the toilet. And the new guy is just going to **** on anything that is left. Google will be the next company to take over the Ebay market and pound them back down. The no galley picture idea sound good but how would it affect your sales? Thanks you can see my Ebay store at www.primeonly27.com
- Like this Reply to this comment
-
(15 Comments)