eBay Announces a New Fee Structure

When I first received my notice of eBay's pending fee structure, it looked like a very good thing for eBay vendors like myself. First most of the Insertion fees were lowered by 5 cents to 80 cents. In addition the cost of the gallery feature fee of 35 cents was eliminated altogether. This was great news to me since I have sold well over 2,000 items on eBay over the years.

My joy was short lived though when I got to the last category of fees, the final value fees. These went up a whopping 3.5% to 8.75% for the $1 to $24 category if your item sells. This increase hurt my profit margin. The cost of items selling for $25.01 to $1,000 increased by .5% as well from 3.25% to 3.50%.

What does this mean in terms of actual cost to the seller? Let's look at several examples:

1) If you have an item which sells for $32 at the end of the auction, with a $9.95 opening bid, the former cost would have been a $0.40 posting fee plus a $1.69 closing fee for a total cost of $2.09. If you wanted a gallery featured fee it would have raised the upfront cost by $0.35 to $2.44 but this is optional. The new structure is $0.35 posting fee plus $2.55 closing fee or $2.90. Therefore, your cost has risen by $0.46 cents even if you choose to use the gallery picture. This is a 14% increase to the seller in fee expenses. This would be an even higher percentage increase if you did not use gallery picture.

2) Another example is a much higher costing item which might sell for $750 with a $499 opening bid requirement. The previous fee structure would have been a $3.60 posting fee plus a $25.02 closing fee for a total cost of $28.62 or $28.97 with a gallery photo. The new fee would be a $3.00 posting fee, the gallery featured fee is of course free. The final value fee increases to $27.68 for a total fee of $30.68. While this increase is only $1.71 higher than the previous fee it does represent a 2.3% increase over the previous fee structure.

It appears that eBay may be trying to nurture the larger transactions by increasing the fees less percentage wise for high ticket items, which produce the most total income per transaction for eBay.

eBay is also modifying their feedback system to make the sellers look better. First, feedback older than 1 year will not count in your feedback percent total. My percentage is 99.7% but after the 3 negatives out of 1510 total feedbacks are discounted, since they are all over 1 year old, my positive percentage will be 100%. Some vendors might consider this messing with statistics to make sellers look better. I know I do.

In addition, it will be very hard for a buyer to leave negative feedback. If they are contacted by eBay on the seller's request and do not respond, the negative they left will be thrown out. Of course sellers with bad review feedback wanted this for a long time. Why shouldn't they.

I consider the current feedback system as a great tool when I buy something from eBay. I would never buy from a seller with a 99.0% feedback ratio or below. Now the ratios will probably increase to a degree where you are not quite sure of their total selling history. This can cost the buyer money or mean they are getting inferior products, or that shipping is slow or haphazard. I think the old system is better than the proposed system. I will have to do a lot more research before I select my favorite and trusted sellers.

Please read my comprehensive AC article: How To Sell On eBay. This comprehensive nine page guide gives you everything you need to know about eBay.