Ebay begins chasing Sellers away

Ebay announce a rather flat 2Q this morning. Hidden amongst the earnings report, an email was sent out from Bill Cobb to all ebay sellers entitled “Resetting the balance of the eBay Marketplace.” After reading the email, I’ve decided that the best way to translate that is to reword it a little and add a little as well. My revamped title reads “Resetting the balance of the eBay Marketplace by thinning out the sellers such that competition drops and final values rise, enabling eBay to make more in Final Value Fees.”

Such Bull$#!7. Excuse my language.

For many of us small time sellers on eBay, selling is a hobby. We don’t do it to make a living and really don’t have any aspirations of doing so anytime soon.

My wife and have been selling on eBay for a little over a year and only recently have we begun using the store add on. While eBay appears to be leaving the core(auction) listing fees and FVF(final value fees) alone, the store listing fees have more than tripled.

  • These Store Inventory format insertion fees take effect Aug. 22, 2006:
Starting Price New Insertion Fee Current Fee
$0.01 — 24.99
$25.00 and higher 10¢
  • Some Store Inventory format final value fees also will also increase, effective Aug. 22, 2006:

>

Selling Price New Final Value Fee Current Fee
$0.01 — 25.00 10% 8%
$25.01 — 100.00 7% 5%
$100.01 — 1,000.00 5% (no change) 5%
$1,000.01 and higher 3% (no change) 3%

Do you read that clear? It’s a $.03 to $.08 jump in listing fees. It’s a flat 2% jump in FVF’s for anything $100 or less. That pretty much covers everything that my wife and I sell. Now, most of you might be saying “that’s not so bad”, but the thing you have to take into consideration is that at the moment, we have over 150 items listed in our store. The average final value of those items that sell is $9.00.

Lets do the math. 150*$.04(guess/average jump of listing fees)=$6.00. 150*9*2% = $27. That’s $6.00 above and beyond what we already pay in listing fees per month. And an extra $27 on top of that once the items do sell. We already pay $15.99 a month for the store. That means I need to see a 4% increase in sales over what I already do to break even to where I am now. It may not sound like much, but trust me it may break our little enterprise.

Bill explains further:

While eBay.com core listings typically sell in about two weeks, Store Inventory listings on average take 14 times longer to sell.

I see. It sounds like they are out for the good of the seller, but in reality, they are trying to line their pockets even more. To list a core listing for two weeks would cost approximately $0.50. That’s without any bells and whistles. Add on Gallery(most do) and that price comes to $1.30. Currently a store listing with Gallery racks up $.03 per 30 days. 28 weeks/30 days=6.53*$.03=$0.20. If we assume that the final value is equal(store listings usually sell for more) then eBay loses out on a potential $1.10 in listing fees per item. No wonder they want to charge store sellers out.

That $1.10 spread out over the millions of store listings makes a pretty good chunk of change that certainly would help their bottom line.

Bill, if your listening, let me be very clear here. What you have done will NOT help sellers. Store listed inventory has a lower overhead and generally sells for a higher price. My average auction listing FVF is $5. My store average is twice that. If I can sell items in my store for twice the price as I can in an auction and have a lower overhead, that helps me. That helps me make more money. Money that I spend on more inventory which I list on your site. More inventory for me means more fees for you. Now, I may have to close my store and find another venue to sell those items.
Greedy Bastards.

For more on eBay visit eBay Habit!

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About Shane Ede

Shane Ede is an IT guy by day and a Entrepreneurial Blogger by night. You can follow him here on Thatedeguy or over on Twitter and Google+.

Comments

  1. ]:) REAL change would only come about if somehow an association (ie: “union”) of eBay Sellers were formed so Sellers could actually develop some clout with the corporate types and beancounters who are making the decisions at the top of eBay. That, plus sending emails/letters/stories explaining “how it was/how it is now/where eBay appears to be heading” DIRECTLY…DIRECTLY…DIRECTLY to the addresses of the actual members who sit on eBay’s Board of Directors. They’re most likely so insulated and blinded by the corporate company spin put out by the higher ups to preserve their positions and hefty salaries that they don’t actually realize what is going on right now. The little guys HAVE to UNITE and SPEAK UP; it’s the ONLY WAY things will change. Individually eBay doesn’t give a damn about any of us, regardless of how long we’ve been on the site or how many listings we put up…it matters not. The ONLY way to initiate change would be to form an association and wield some collective clout. Will it ever happen? One can only hope and dream…

  2. Thatedeguy says:

    I think you make some good points, Rick. I think that you miss something though. Public opinion is a strong thing. By my posting this post and by others posting their opinions either on the message boards or on blogs or whereever, the public opinion will be swayed and our side of things will be screaming back at them soon.

  3. Rick, the message board out on greedbay are exploding with anger. There has never been a better time to get off the pot. A list of eBay alternatives:

    http://www.ebayauctionmasters.com/eBay_alternatives.html

    Many people will continue to complain and threaten to leave eBay but actions speak louder than words.

    If you keep doing what you are doing, you will keep getting the results you are getting!

    All the complaining in the world will NEVER change what has already happened.

  4. ebay have been chasing sellers away for a long time. They hiked up their fees a couple of years ago. What happened? they lost money in the coming years. Now they are hiking them up again. Do they actually think they will “repair” their loss? No, it will just get worse. left with eBay we will see those who don’t think that the fees are high and those who thinks, “Well, if all the others leave, I will have less competition”. But I’d rather have competition if it means I could keep my prices FAIR. Now I will have to raise my prices in order to keep the same overhead. Soon you will see that ebay no longer is a great place for bargains. It will be a great place where you can find just about anything you need, but they will definately lose plenty of sellers who are fed up and that simply cannot afford these hikes. Soon the prices on eBay will be like the prices at WalMart. And given shipping is not something to worry about at WalMart, people will soon find out that it is actually cheaper to shop there.
    I am frequently in newsgroups and forums to hear what people have to say, and I have to laugh when I see sellers basically support the fee hikes. They actually think that it is better for THEM if other sellers leave. But how can it be? They WILL have to raise their prices, unless they want to simply trade money with no revenue.

  5. I’m a small time seller doing this part time so I can spend the money I make on eBay.

    My in-store items are under $10. most are under $5. If they did not want us to open stores, why in the world did they promote it back in December?

    RE: While eBay.com core listings typically sell in about two weeks, Store Inventory listings on average take 14 times longer to sell.

    The reason is not the store owners fault! It’s eBay’s.The lack of store promotion & the changing of the search. If the yellow field next to the box that says search title & descriptions also had a search stores it would help.

    Small time sellers & Mom & Pop businesses are the ones who are going to suffer. How can you make a profit selling a $2.00 item in your store if eBay takes so much out? If you have a solution for me, Mr Cobb, please let me know! I don’t see it. Raising prices is not an option.

    I have competeition who charges less. Namely Foreign eBayers who do not have to pay fees!

    Without a solution, a multitude of sellers are going to quit eBay all together due to lack of sales and losing money in fees. They will not hesitate to let their customers know the reason their stores are being closed en-mass and we will let them know where they end up selling their merchandise away from eBay.

    This cannot be good for eBay. I’m not convinced.

    I feel eBay has let me down. I signed up with a store because it was feasible to make it work.

    If the search options & fees were what it is now (after the hike) I would not have signed up. I would not have invested my time, money and energy into building a store.

    Now I have a room full of invetory, a lovely store set up, and packaging materials without the hope of making a profit. (shoot, I don’t even see how I can break even!)

    I cannot tell you how upset you’ve made hundreds of people with your announcement.

    This store owner is still unsure of her future with eBay. I hope it’s not goodbye, but I might be forced to leave.

    Beth
    owner of A Trunk-Full O’ Fun!

  6. I just closed my store on ebay — I will be moving my 600 plus items to http://www.onlineauctions.com — Sellers get this only $8 per month unlimited listings and no final value fee — Lets all say goodbye to ebay

  7. Chris O says:

    So, for selling

  8. Chris O says:

    My message died it seems. Anyway, the gist of the message: 10% fees, 3% paypal fees, 15.99 a month store fees + listing fees == ~15% going right into ebays fat pockets. And, my store listings get less views in a month than my auctions get in a week, so, i cant say that the resources to host my store items that get 15 views a month are oh so high (due to store items not showing up in normal ebay searches).

  9. David, make sure to use promo code 1109 when you sign up for http://www.onlineauction.com that will give you an additional 200.00 in listing credit for the site!

  10. This is leading to eBay sellers trying to figure out more and more innovative ways of selling outside eBay.

    A friend of mine is a programmer and one of his customers had him write a program to do following :
    1) Retrieve the list of bidders and the corresponding items from his ebay id.
    2) Create a shopping cart for that user in his own store. If the user does not exist create the user.
    3) Send out email to the user with the link saying we have your products ready to ship just make the payment using the link below and the goods will ship immediately.

    Using this technique this guys is able to sell to each of his bidder instead of just the highest bidder and avoid commission on all but one buyer.

  11. I beleive its about time that all you’s sellers out start looking for a ebay alternative.

  12. If you’re looking at the alternatives then you could do worse than check out http://www.pheebay.com

    There are some very busy forums there where no end of sites, including eBay, are discussed. Tazbar is getting a lot of coverage in Europe (as they TV advertise) and around nine or ten sites are represented on pheebay by the site owners so it’s great if you want to ask questions at the very top.

  13. we opened an ebay store in oct. 2006. we thought ebay wanted companies like us to open stores because of all their hype and advertisement to do so. at first we did pretty good. now in march 2007, we are hardly selling anything. we have cross-promoted, advertised off-ebay, and done everything else under the sun to drive business to our ebay store. but it seems that as hard as we work, ebay works harder against us. we have reduced our inventory by half, and if sales don’t pick up, we will close our store. when we try to search on ebay for our items, if they’re listed, we’re way in the back. also, some items take days to list. we only put a few items out on auction because it is too expensive. and we are not going to be forced to do fixed price. we have spent about 1000.00 so far on ebay and paypal fees, and we have just about broken even. this is turning out to be nothing more than a tax deduction for us. it’s a shame, used to be that ebay was the best in town. now, they’re going down hill fast. sorry ebay, if we can’t show a decent profit, we’re out! your company isn’t the only one that needs to show a profit.

  14. Another new site that I found to be quite good is http://www.bidsell.com.au

  15. Ebay was nice when it first came out, now they are starting to remind me of Microsoft a few years ago. Can you say monopoly? I sold on eBay for a while, but the cost got to be to much. They raise fees just about every year … got the whole market cornered … well, maybe. In order for me to make a profit I had to get away from the fees. I started my own site, a place I could park so to speak all the things I wanted to sell. I concentrated mainly on one area. But as I worked I figured I may as well let everyone have the same opportunity. List your items for a fraction of what you will pay ebay. Pay you account monthy at your descretion. Lets get away from the beast, start using online auctions the right way. Get $1000 With Registration.

    http://www.onlineauctionexchange.com

  16. We used to use Ebay as a great tool for SEO, basically just punt up a few ads, put in some links to your website and watch the traffic flow. Worked very well, but the listing prices are above monetization now.

  17. mountainfear says:

    My husband and I also have a store on ebay that we dont make a living at we just do it as a hobby. We too are closing our store because of the increase on sellers and the fact that the buyer now cannot get anything other than a positive feedback from a seller. Its the last straw for us also. I hope enough people leave that they stop and think about their business practices.

  18. So I see the same “chicken little” attitudes happened 2 years ago when ebay announces THAT fee change. Being upset and the threatening to leave crap. Well, leave then and let the rest of us continue on with our lives. People are so full of it. Other auction sites might sound great but unless they advertise instead of pocketing the money you won’t sell squat since the traffic won’t be coming your way. It reminds me of route 66-when they built the big superhighways all the stores along that route closed up because there was no traffic. Going to another auction site would be like setting up shop along route 66. The whiners on ebay sound like my Mom-she threatens with her big mouth but fails to follow through. Actions speak louder than words-either put up or shut up!

  19. it is really time to quit ebay. With the time and effort spend on ebay, it is not worth doing business on Ebay. Time to Quit Selling On Ebay. it is not worth anymore.

  20. I’ve started setting up shop and auctions on http://www.BidJunk.com , its Totally FREE to sell and you get to have a FREE store and has paypal and many other types of payment options. It’s a good place to start moving and bringing in the sellers.

  21. tony kilgore says:

    Charity Foundation thrown off ebay for 2 weeks for shill bidding,ebay says since family,and members of foundation were bidding it was a unfair advantage to those not affiliated with foundation,of course ebay will not return to foundation thier listing fees of over 90 items,and ebay will not respond to any emails from foundation,foundation promotes youth programs,and support programs for families/friends who have lost a child or suffered from tragidy,ebay explains rules after the fact in regards to shill bidding ,funny thing is after reading thier explaination foundation is not in violation,family,and foundation members are bidding on annoynimous donated items in which proceeds go to needy,but foundation can not get anywhere with ebay no return emails!!I know ebay has been around for a long time,and that thier in big money,but after hearing this story and so many others I HAVE TO AK,iS IT GREED?,OR ARE THEY HURTING FINANCIALLY AND OUT TO GET WHAT THEY CAN NO MATTER WHO IT HURTS?IS EBAY’S EMPIRE STARTING CRUMBLE OR WHAT?

  22. I was on Ebay for 9+ years selling antiques & collectibles and did very well. I’m not willing to do business under their new policies so closed my store. Am doing well on Etsy and just signed up with Ebid. Figure I may have to find a variety of sites for different items until, “the site” developes. There will always be collectors that like to use the net. Also am opening a web site.
    Sellers are going to have to be patient until things settle down. I think it is important for us to maintain our business standards, such as customer relations, and not work with a company that is counter productive. Will not get into specifics of Ebay, check the forums.

  23. I was an avid Ebay Seller until about a month and half ago. Ebay kept making profits less and less probable with their introductions of higher costs and less visibility through the transformation of their auction layouts. In order to keep up with the constant change my business plan as well as products needed to change. Finally with the introduction of their new policy against leaving buyers feedback I quit. I cannot have that, I need to leave dead beats and FRAUDULENT accounts negative feedback. Since I quit Ebay, I’ve had two chargebacks occur on my accounts for items that were $350/each. These chargebacks occured 5 1/2 months after the object was purchased and shipped. Paypal has done nothing with the credit card companies to help alleviate the situation and return the funds rightfully back into my account. With Ebay and Paypal’s policies it is nearly impossible to run a successful and ‘safe’ guarded business. Paypal will ALWAYS side with the buyers, they have little to no protection for the sellers. These are the people that are MOVING and creating the profits for Ebay, yet they could care less.
    Right during the new feedback rules and other raised fee’s I decided that I needed to find an alternative to Ebay. I was tired of dealing with tangible products, over zealous buyers with threats of negative feedback, and the lack of security of dealing with chargebacks and Ebay. After talking with a very good friend of mine, Dr. Worthen he suggested to me a product in which he was making $20k/month from with a product that he never tangibly touches or needs to ship. Since I got into the business I’ve already matched my best Powerselling months of $10k+ revenue in a month. In fact I’m counting on doubling that by next month. TopManagementPositions.ComIf you have any questions regarding this business feel free to contact me. My life has literally transformed since I was introduced to this business. I don’t have that negativity and gorilla hanging on my shoulder like I did with Ebay. I was always afraid of a negative feedback, or a chargeback, or any other horror story I have heard of! Now I don’t worry and watch the money multiply.

  24. DAVID MICHAUD says:

    EBAY HAS SCOOPED TO THE VERY LOW BY DOINGTHE KINDAGARDEN CLASS OF STARS ONCE YOU DROP TO 4.1 YOU CAN NOT SELL ON EBAY NO LONGER EBAY IS FOR THE BIG SELLER JUST LIKE CORPORATE AMERICA LOOK WHAT THAT GOT US WHEN EBAY LOOSES THE SMALL SELLER LOOK WHAT THEY WILL LOOSE WILL THEY ASK CONGRESS FOR A BAILOUT

  25. I don’t know that it matters too much what ebay does to sellers. As long as they keep the buyers happy there will always be a market. And where there is a market, sellers need to be.

    It’s a lot cheaper and much better coverage than an ad in the local paper.

Trackbacks

  1. […] If you’re familiar with eBay at all as a seller, you’re aware that eBay recently announced a pretty stiff price hike for the eBay Store listings. It’s gotten the ire up of a lot of the eBay sellers, myself included. Ira Steiner of AuctionBytes makes a good point in her recent post “Why eBay is wrong about store vs. core” store items can’t hurt the core platform with identical, poorly priced items; when you do a search on core, you don’t find the store items […]

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