Wednesday, May 20, 2015

What eBay's new seller fees are trying to accomplish

A few weeks ago, on May 1st, eBay made some drastic changes to their fee structure and selling limits. As someone who's been selling on eBay for almost 14 years, I'm a seasoned veteran at enduring eBay fee changes, they typically happen once a year. But this one was different. This one marks a paradigm shift for what eBay is trying to be as a marketplace and where they want to go in the future. In my opinion, this is eBay trying to be more like Amazon.

So what changed? Let's take a look...

Free listings cut by more than half:
For people like me, who don't operate an eBay business, but simply sell things on the side for some extra income, the biggest change is the number of free listings we get each month. Previously it was 50 items per month with no listing fee. You still pay the usual 10% final value fee, of course, but no 30 cent listing fee for the first 50 items.

As of May 1, we now only get 20 free listings per month. That's a huge cut and it will affect the things I choose to sell. Previously, I'd try selling things even if I didn't think they were worth anything because, hey, why not, let's give it a shot. Now, I have to pick and choose more carefully with only 20 free listings. However...

Listing fee reimbursement for items that sell:
If a listing ends in a sale, eBay will now refund the listing fee for that item. So if I want my fee refunded, I have to ensure that items actually sell, which means I'll be more choosy about which items I list. It also means that I'll lower my initial start prices to ensure sales.

For eBay Stores
Stores are a service eBay offers to sellers that gives them cheaper fees, better tools, and a customizable store page for a monthly fee. For high volume sellers, the amount saved is far higher than the fee, so it's worth it. Up until now, sellers with a store could list 150 items per month with no listing fees. On May 1st, that ALL changed. Now, basic stores can list 150 fixed price listings (meaning, Buy It Now only, not auction) per month, and the same 20 free auction listings that everyone gets. Obviously, sellers with higher level eBay store subscriptions get more.

So let's recap: more free fixed price listings, insertion fees reimbursed if the item sells, reduction in free listings for sellers without stores...eBay is trying to become Amazon. They want the majority of their listings to be fixed price (not those confusing auctions), and they want the auctions that ARE posted to translate into sales the majority of the time.

As usual, eBay is bending over backwards to cater to buyers (who pay zero fees and contribute nothing to eBay's bottom line), and turning a blind eye to sellers (who actually, you know, pay fees). They have a very long history of doing this, actually. Each year they announce a "Sprint Seller Update" that usually follows the same theme. Sellers are screwed while buyers are rewarded.

I get it. Without buyers, the website is worthless. And enough of us sellers continue to make money in spite of the changes, so there won't be a big seller boycott. But it's sad to see the thriving marketplace that eBay used to be reduced to just another storefront.

Between this and the extremely high fees they collect from sellers (seriously, they take 10% of not only the sale price, but of the SHIPPING paid by the buyer, too!), it makes eBay a seriously less compelling place to use for small time sellers like me.

But the real problem is that eBay is a massive monopoly in this space and they know it. Don't like eBay? Fine, don't use it. But...where else would you go? For someone like me who sells maybe $100 worth of stuff per month, where else do I go to make the same money? Craigslist? No thanks. eBay is the only option, and they know it.

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