Will eBay Be Forced to Reverse Fee Change Again?
According to some initial seller feedback and a recent Fortune roundup, eBay sellers are irate about eBay's recent fee change--in part because, for many, it represented an increase presented as a price cut. eBay sellers are a rowdy, vocal lot, so isolated screams need to be taken with a grain of salt. But given the volume of this latest protest, it seems conceivable that eBay might have to cave and reverse (or at least adjust) the fee changes.
As we said yesterday, we believe eBay blew the fee change. We think the company should have cut fees across the board by at least 25% to compete with Amazon, Google, and other viable alternatives that didn't really exist five years ago. The stock is already in the tank, so the market would likely have forgiven the expectation of a rebuilding year in 2008. Instead, eBay tried to have its cake and eat it, too--dropping listing fees but jacking final value fees so as to maintain (or even increase) its take rate.
Unless eBay finds a way to significantly improve its value proposition for sellers, we believe the company will continue to lose users (the organic user base probably shrank in Q4, something that would have been unthinkable only a few years ago). A stealth price increase, in our opinion, isn't the way to do it. So we wouldn't be surprised if eBay soon backtracks and adjusts its new fee structure--just as it was forced to do after a similar fee change a few years back.
See Also:
eBay Sellers Disgruntled By Fee Change--Say Price Hike in Disguise
eBay Blows Fee Change, Should Have Cut Prices
As we said yesterday, we believe eBay blew the fee change. We think the company should have cut fees across the board by at least 25% to compete with Amazon, Google, and other viable alternatives that didn't really exist five years ago. The stock is already in the tank, so the market would likely have forgiven the expectation of a rebuilding year in 2008. Instead, eBay tried to have its cake and eat it, too--dropping listing fees but jacking final value fees so as to maintain (or even increase) its take rate.
Unless eBay finds a way to significantly improve its value proposition for sellers, we believe the company will continue to lose users (the organic user base probably shrank in Q4, something that would have been unthinkable only a few years ago). A stealth price increase, in our opinion, isn't the way to do it. So we wouldn't be surprised if eBay soon backtracks and adjusts its new fee structure--just as it was forced to do after a similar fee change a few years back.
See Also:
eBay Sellers Disgruntled By Fee Change--Say Price Hike in Disguise
eBay Blows Fee Change, Should Have Cut Prices
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Ebay has changed it's rules to favor buyers over sellers to the extreme. Eventually everyone who offers quality items on ebay will be forced to look elsewhere for those lost sales. I am one of the last hold outs who has stayed, but I am am currently looking for better venues to try.
I didn't work for 40 years, educating myself as a world class antique dealer to end my days selling in a junk or dollar store, which is what ebay is slowly deteriorating into, despite the quantity of offerings it has.
Ebay must evolve or die as must we all.
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eBay.ca Fees
View Fees for: eBay.ca | eBay Motors | eBay Stores | Real Estate | PayPal
Basic fees
When you list an item on eBay, you're charged an Insertion Fee. If the item sells, you are also charged a Final Value Fee. The total cost of selling an item is the Insertion Fee plus the Final Value Fee.
Insertion Fees (C$)
Starting or Reserve Price
Insertion Fee
Insertion Fee: Books, Music, DVDs & Movies, Video Games*
C$0.01 - C$0.99 **
C$0.15
C$0.10
C$1.00 - C$9.99
C$0.35
C$0.25
C$10.00 - C$24.99
C$0.55
C$0.35
C$25.00 - C$49.99
C$1.00
C$1.00
C$50.00 - C$199.99
C$2.00
C$2.00
C$200.00 - C$499.99
C$3.00
C$3.00
C$500.00 or more
C$4.00
C$4.00
Final Value Fees (C$)
Closing Price
Final Value Fee
Item not sold
No Fee
C$0.01 - C$25.00
8.75% of the closing price
C$25.01 - C$1,000.00
8.75% of the initial C$25.00 (C$2.19), plus 3.50% of the remaining closing value balance (C$25.01 to C$1,000.00)
Over C$1,000.00
8.75%of the initial C$25.00 (C$2.19), plus 3.50% of the initial C$25.01 - C$1,000.00 (C$34.12), plus 1.50% of the remaining closing value balance (C$1,000.01 - closing value)
Insertion Fees (US$)
Starting or Reserve Price
Insertion Fee
Insertion Fee: Books, Music, DVDs & Movies, Video Games*
US$0.01 - US$0.99 **
US$0.15
US$0.10
US$1.00 - US$9.99
US$0.35
US$0.25
US$10.00 - US$24.99
US$0.55
US$0.35
US$25.00 - US$49.99
US$1.00
US$1.00
US$50.00 - US$199.99
US$2.00
US$2.00
US$200.00 - US$499.99
US$3.00
US$3.00
US$500.00 or more
US$4.00
US$4.00
Final Value Fees (US$)
Closing Price
Final Value Fee
Item not sold
No Fee
US$0.01 - US$25.00
8.75% of the closing price
US$25.01 - US$1,000.00
8.75% of the initial US$25.00 (US$2.19), plus 3.50% of the remaining closing value balance (US$25.01 to US$1,000.00)
Over US$1,000.00
8.75% of the initial US$25.00 (US$2.19), plus 3.50% of the initial US$25.01 - US$1,000.00 (US$34.12), plus 1.50% of the remaining closing value balance (US$1,000.01 - closing value)
What a rip off scheme. One would think, when you list 20 items times under 8:00 dollars x 0.35 each, you end up paying 7:00 dollars for listing in total - but they will add up all items listed and come up with 160.00 Dollars, and put it as 2.00 insertion fee multiplying it by 20 again and ending up with 40.00 fee charged, plus extra dollar for sending it to you, which does not make any sense to me. Someone tries to raise money for charity and even if you do not make anything out of it, to help the poor, or for a good cause, some rich asshole will get even richer. And if 1000 people like us did the same, that corporate monster made out of few executive members made already 40 thousand dollars in 7 days. Is it how it works???
Sorry folks, wasn't aware of the feedback and fees until I saw it on the news tonight. I was listing today but will stop for the rest of the week.
I am not about to try recapturing my thoughts but did want to mention I will be participating in the boycott February 18 - 25, 2008. eBay's arrogance affects us all... buyers and sellers alike. My store will be closed and I urge others to participate in this important event. We need our voices to be heard... sadly this is the only way ebay will listen.
A low volume seller, even if it is high dollar in sales, will be at a much higher risk under the new policies.
Let's say seller gets a 3 people who either don't leave a positive or leave a negative feedback or leave a positive, but ding the sellers stars in a 30 day period. The stars can be dinged for anything, and some that is out of seller's control- like a buyer wanting media mail on the item, but USPS doesn't deliver it for 10 days- media is slower, but cheaper service.
Buyers have a bad day, or decide it should have been faster or just want to be a donkey's butt that day, so they ding the seller's stars.
Seller is now in the percentage that has some problems as far as ebay is concerned, because seller cannot even defend themselves with any FB unless it is positive.
Seller's items are dropped down further under the new search engine rules.
Seller get told by eBay, for safety, they must either have a merchant's account or Paypal now, since the FB went down.
Many sellers do not qualify for a merchants account, or it takes too long or the fees are high on the low transaction volume and not economically viable for a small volume seller; seller opts to take Paypal ( not much of an opt, but maybe the only choice).
Seller works hard to sell more items and clear the 30 review, but a competitor sees seller is on the ropes and buys, doesn't pay and dings the seller again in the next thirty days ( competitor uses a throw away ID as buyers do not have to provide any sort of proof who they are when they sign up).
Seller is already had their placement in the boogered up search engine dropped before as they had problems, so with another drop in the search, it is even harder to sell, now another star ding has happened.
Lower yet in search and Paypal tells seller they will hold money for 21 days or until buyer leaves good FB. Seller has to sell something that is now harder to be found and ship out on their own dime while the money is held.
Paypal collects interest on seller's held money and doesn't pass that on to the seller when the funds are released, BTW.
To add to the problems of our fictional low volume seller, let's say they are selling in the $50.00 and under sales items, as do many many sellers on eBay.
The highest fee hike is on this group- seller may save 5 cents to 40 cents on the insertion fee, but pays a high rate on the FVF, possibly up to 13% of the FV sold.
Seller is paying the highest rate on fees, gets further down in search, is forced to take PP and pay those additional Paypal charges, and must ship/buy inventory/maintain business with the money being tied up for a time and no interest made on that same money.
This will also effect buyers in the end. Buyers will have less selection as eBay weeds out mom and pop or low volume sellers. Buyers will see higher prices as well. Watch the import goods load up on eBay from sellers.
eBay will be just another retailer on line, and the "find IT here" is leaving with the small sellers, the mom and pops, the person clearing out great aunt Wilma's stuff....
"IT" will have left the building and be living with Elvis!
If anyone values their right to free speech, I ask that buyers & sellers alike join with us and let ebay know they are not our big brother, we can think/act for ourselves.
PLEASE DO NOT BUY OR SELL ANYTHING ON EBAY FROM FEBRUARY 18-25!!
Thank you!!
Your feedback is your reputation on ebay & the only one who needs a good reputation are the sellers. When ebay tries to silence us and not let us leave the appropriate feedback for a transaction then the entire feedback system is suspect at best but to be blunt it is TOTALLY USELESS!!!
Having the buyer be the only one who can leave a negative or a neutral would be like allowing any buyer of merchandise to take the item back to whichever store they chose, not the one they actually purchased it from.
As a seller I have to put up with the threat of a chargeback through ebay or the buyers credit card because they want the item & their money or they bought the item because they want to upgrade & then they want to convince ebay that the item I sent was not as represented. There is so much talk of the fraudulent sellers on ebay yet no seems to mention there are just as many fraudulent buyers.
For years ebay stated feedback is voluntary. Buyers are obsessed with it so ebay decided that the buyer should have his/her way & get their positive, now negating the blocked option I as a seller had to block bidders with -1 or lower. Now, for all intents and purposes the only feedback a buyer has is 100%. Yet the buyer's feedback means NOTHING as they can snipe bid at the last minute & I have no choice but to take their bid.
There are two simple solutions 1. get rid of feedback all together. Just use the DSR star system & implement one for the buyer as well. 2. Leave feedback in place for BOTH the buyer & the seller BUT remove any retaliatory neg irrespective of which party leaves it. EBay has always had this power they have just chosen not to use it. Their solution is a slap in the face to ever good seller out there. I have 100% feedback w/1955 feedback that count many more that do not count toward the number; I'm not a bad seller. But their policy is leaving me open to bad buyers who want to get even with all sellers over what one bad seller did. There was a thread on one of the boards about a buyer who was leaving negative for every seller that didn't leave him positive feedback minutes after he paid. Feedback is VOLUNTARY, sending an as described item, in the condition stated in a timely fashion is mandatory. Buyers & ebay need to get their priorities in order and ask themselves do I want what I paid for or do I want positive feedback...their scenerio is absolutely absurd!
The other thing I take issue with is their new default listing for prefered sellers. I have 100% feedback, I pay the same fees (even more per item) than their coddled top power sellers yet my item will show up under the power sellers? That is another slap in the face. If they want to set up a link to top sellers fine but don't make it the default. The default has ALWAYS been items ending first & that is the way it should stay unless the buyer chooses otherwise. But this is still not as big an issue as the feedback fiasco. Because in the grand scheme of things, once the new feedback rules go into effect there will be NO more 100% sellers. Ebay will be lucky to have the top sellers at 80% feedback rating & that will really instill confidence in the buying community. How will it look when someone says "Oh this is a great seller they perform at 80%." and that is if you are lucky!!
I for one will always have 100% rating because I REFUSE to pay someone to censor my voice. IF I cannot be honest about a transaction, I will NOT remain here! There is no way a buyer can have confidence in a seller if they do not know the pure facts & as a buyer also I would NEVER buy from an 80% seller. So this will be the demise of a once fine auction site. Hopefully someone else will come along and take their place because it was a good idea until the ever knowing powers that be at ebay decided to fix a system that wasn't broken.
To all the stockholders at ebay my advice would be bail out now because the stock will be worthless once all the good sellers are gone. Buyers don't want to buy from suspect sellers and that is all that will show up witht he new feedback rules.
In closing I'd like to quote Judge Judy & say "Don't pee on my leg & tell me it is raining." Ebay don't tell me you are cutting fees and then raise them I'm not an idiot & that really PO'd me. But as I have always done in the past, I would have gotten past it if you hadn't taken away my voice, my RIGHT to say what I think about a transaction & if you hadn't tried to make me an inconsequential seller just because I am not a power seller.
I don't want to leave ebay I am being forced to!!
Thanks for the recent Excellent articles on eBay.
We too at PheeBay have been exposing in detail via our original Home Page News and Forum board eBay’s Stealth Fee Hike of 2008.
If you or anyone else would like to share information/ideas please check us out.
In short, we are an established international (half American & half British) site that is dedicated to News and Talk about eBay and the Alternatives (and originally started out because of the previous eBay fee hikes and protests).
Again, thanks for the good news articles.
PS: Henry, please contact us at admin [@] pheebay.com and we also write daily our own news and have our own RSS News Feeds too and probably can do some sort of co-posting arrangement.
I found out more info at ukebid.com
of expressing the opinion of their constituents
they are violating the very base of the US Constitution.
We need to have the freedom to express our opinions; we have the legal right to
defend ourselves; The new feedback policy violates the fundamental freedom
given to us to express ourselves, when only one individual has the unilateral right
to leave negative feedback, the seller is no longer entitled to voice that opinion,
in a clear violation of our constitutional rights to free speech
or the right to express ourselves.
eBay not only is increasing the fees by 67%
PayPal -an eBay Company- will also Freeze our accounts!
We need to remain eBay that we are in the United States
and not in Countries like North Korea, Iran, and others
where the freedom to give and take your opinion
is silenced by the dictatorship of the individuals running those countries.
We have no protection and I feel vulnerable,
eBay is denying us of our constitutional rights.
Jay
Do that...
...and then see how that fits with the recent changes.
Worldwide eBay Boycott February 18th through February 25th, 2008.
We the concerned eBay buyers and sellers on eBay are protesting eBays announced new fee increases and feedback policy changes. We do not believe that these changes will have any positive affect for buyers or sellers and will result in increased prices, less choices and disharmony within the eBay community.
We also are in complete agreement that eBay's policy of allowing dogs and cats to be sold on eBay in China for slaughter purposes is both cruel and inhumane and must be stopped immediately.
We urge all people's to not shop or sell on eBay during this worldwide boycott.
Please spread the word.
Thank you.
ie: A seller who has been a member for a month, has received positive feedback for a 100 items, 100% Positive, DSR Ratings at 4.9, 4.9, 4.9, 4.8 VS. A seller who has been a member for five years, 10,000 feedback, 99.8% Positive Feedback, DSR Ratings at 4.8, 4.8, 4.8, 4.6. The new seller will receive MORE exposure than the long time ebay member who is also in good standing. You can not please all buyers all of the time. I think that THIS is what is unfair.
I also think listening to the ebay exec's at their public meeting, state that Sellers' should start thinking about offering Free Shipping in their listings so ebay can compete with amazon and others is crap disguised under a toilet lid.. OF COURSE THEY WANT THAT to happen, the larger the purchase price, the more Ebay's Take of the kettle is...FVF increase. No matter how much smoke they try to blow, they can't cover their own crimes. It will take a lot of sellers' flushing this toilet to stop the craziness.
However, this new feedback policy is not as benign as it may seem to investors who are not intimately familiar with the nature of eBay's business. Although it seems minor, there are serious problems with the new policy that does not allow sellers to post a negative to buyers... these problems may effect earnings and even eBay's credibility as an online marketplace:
* First and foremost, sellers negative feedbacks will increase, that is a given, little issues that could be worked out will result in neg's and neutrals. The end result of this is a marketplace that publicly LOOKS less safe to buyers. An artificially high volume of bad feedback will scare away buyers & with the greater emphasis on end-of-auction commissions it will effect earnings.
* I run a lot of 'make-offer' listings... I will accept more competitive offers from buyers with good feedback ... they're easier to do business with and less chance of chargebacks or fraud. This metric is now meaningless.
* It is epidemic on eBay that buyers extort 'partial' refunds from sellers holding the threat of a negative feedback even now ... this problem will go off the scale with this new policy. Example; buyer purchases a used laptop, writes seller and says it is more 'used' than he expected and wants $100 partial refund or he'll leave a negative and 1 star DSR's ... why wouldn't a buyer try this? no downside for them ... and can leave a negative even if paid off ... Big, big issue for sellers.... many sellers thus abused will not be back ...
* Fee discounts are offered to sellers with 4.8+ DSRs ... meaningless ... it is almost impossible to keep a 4.8 in the shipping cost category unless you sell beanie babies (and eat part of the shipping cost) ... A 45 pound item costs a lot more to ship CA to NY than MA to NY, buyers don't always realize the scope of the difference... offer 'flat-rate' shipping on heavy items and more local customers feel ripped off. Additionally, if you have 100 customers and a dozen give you 4 stars (which is labeled as a positive assessment) you will fall short of 4.8 ... why even offer this discount, will only piss off sellers ...
* Non-paying bidders who do not respond to a dispute can not post feedback ... but all a buyer has to do is respond with 'screw-you, I'm not paying' and they can leave the seller a negative that he can't even respond to ...
The current system of open mutual feedback is self-moderating if properly managed. To address the problem of retaliatory feedback eBay should form a team that polices and reacts to sellers posting unfair feedback .. not this poorly thought out move ... In short, this is a bad policy that will not protect buyers, will leave sellers vulnerable and will hurt sales because eBay will look less safe to buyers. Also, big companies (and not so big companies, like mine) will be forced to re-think their presence on eBay if skewed feedback profiles damage their corporate images ... just a bad move overall...