Thursday, March 17, 2011

eBay Fee Changes Coming - But Don't Panic!


eBay has posted its Spring 2011 Seller Update. One of the controversial changes includes the way final value fees are calculated. According to the announcement:

"Starting July 6, to encourage and reward low-cost shipping, Final Value Fee rates for Fixed Price listings will be reduced and applied to the total amount of the sale —including shipping. This change applies to both eBay Standard fees and eBay Store subscription packages."

This announcement has some sellers in an uproar. But that is not unusual, every time eBay changes the fee schedule (or anything else for that matter), you will hear a ruckus on the eBay Community Boards and in your eBay groups. Let's all take a deep breath and look at this rationally and consider all of the changes as a whole.

I think the purpose behind this change is that eBay is trying to get a handle on those sellers who sell their item for .99 with $20 shipping. This is called circumventing fees and is an eBay policy violation. Sellers do it anyway. I actually find this amusing, as if these sellers think they are outsmarting the eBay system. If they are caught, they can be suspended. After years of trying to police this strategy, eBay is trying to collect fees from these unscrupulous sellers. Charging fees on the total amount of the sale, including shipping, may be the only way to do it.

Before you panic:

EXAMINE YOUR NUMBERS!

eBay has provided calculators here where you can plug in numbers and see how the fee changes will affect you. Sellers will receive 50 free auction listings a month which is a significant upfront savings. Sellers can add Buy it Now to 50 listings for free. Final value fees in some categories will be less.

Click here to read the entire update, view the new fee schedule, and run your numbers on the calculators. eBay has also set up a special discussion board for sellers to ask questions and chat with eBay staff. Click here to visit the Spring 2011 Update Special Discussion Board.

Some sellers have speculated that eBay is making these changes to "get rid of the small seller." I don't see this at all. I see eBay operating under the "long tail theory" which states that a larger share of the population rests within the "long tail" of probability distribution. A few may dominate, but the sum of all the smaller sellers is greater than the sum of the few that dominate. Small sellers are a huge part of eBay's seller base. Why would they want to get rid of them?

Keep in mind that eBay, like life, is constantly changing. eBay provides the world's largest online marketplace where we can sell our items and enjoy the freedom of running our own businesses and working from home. Being able to adapt to these types of changes is what makes sellers successful. Look at the facts, ignore the hype, and make your own decisions.
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