posted on January 17, 2002 05:14:38 AM new
From the Marketing Announcement Board:
***Fee Changes***
Today, we are announcing a number of changes to the current eBay price structure. Effective January 31, 2002, we are increasing Final Value Fees, adding a new Reserve Fee price point, charging a fee to use Buy It Now, increasing eBay Motors vehicle Insertion and Final Value Fees, and in late February, changing how we charge Final Value Fees for Dutch listings. Other Feature and Insertion Fees, and fees for eBay Premier and Real Estate, will remain unchanged.
eBay.com Changes:
*Final Value Fee
We are adding 0.25% to each Final Value Fee price point.
Final Value: $0.01 - $25.00 Current: 5% New: 5.25% $25.01 - $1000.00 Current: 2.5% New: 2.75% $1000.01 and up Current: 1.25% New: 1.50%
*Reserve Fee
We are adding a new price point for reserve listings above $200.
*Buy It Now Fee
A $0.05 Feature Fee will be charged for all auction-style items listed with the Buy It Now feature. The new fee will not apply to eBay Stores Buy It Now items.
*Dutch Fee
The standard Final Value Fee schedule will apply to each item sold, not to the total dollar amount of all the items sold. Thus, the Final Value Fee for each item sold will be identical to the standard eBay Final Value Fees outlined above.
*eBay Motors Changes
eBay Motors is increasing Insertion and Final Value Fees for Passenger Vehicles and Other Vehicles from $25.00 to $40.00. In addition, a $0.50 Feature Fee will be charged for all Motorcycle auction items listed with the Buy It Now feature, and a $1.00 Feature Fee will be charged for all Passenger Vehicles and Other Vehicles listed with the Buy It Now feature. eBay Motors Parts & Accessories fees remain identical to eBay.com fees.
*eBay Stores Final Value Fee Change
Beginning in late February, all fixed price eBay Stores items that are sold in multiple quantities to the same buyer will have Final Value Fees calculated on a per item basis. Final Value Fees for single item sales are already calculated on a per item basis.
International Fees:
New Zealand and Singapore will adopt all of the applicable fees described above. Australia, Canada, Ireland, Sweden, and the United Kingdom are increasing Final Value Fees and Reserve Fees on February 1, 2002 local site time. All other international sites are not affected by these changes. More information on the international price increases is available by clicking on the following links:
*Canada
*Australia
*United Kingdom, Ireland and Sweden
We recognize that price increases directly impact our users, so we do not raise fees lightly or without considering the impact to our community. These increases will help us continue to build a vibrant marketplace by allowing us to invest heavily in technology, marketing and customer support, making it possible for millions of people to discover and use eBay.
More information is available here
Regards,
eBay
Here is the address if you want to read it for yourself (sorry I dont know how to make it a direct link):
http://www2.ebay.com/aw/marketing.shtml
posted on January 17, 2002 06:03:42 AM new
I knew it was coming, and since I often make more when people BIN, rather than buy for my minimum plus a tiny bit more, I'll go for the nickle. I understand the Dutch stuff, since if you sell above $25, the fvf drops to 2.5%, but of course I'm not happy about the regular fvf's. I already thought they got too much. But there is no real alternative. I tried Yahoo..it's cheap per item, but for me anyway, I had to run each item a minimum of three times to sell it, and had an awful lot of people not pay once the item actually did sell. So bring out the wallet : (
posted on January 17, 2002 06:42:14 AM new
I wouldn't mind paying $0.05 for Buy-it-now if it was charged to the seller when a customer PURCHASED an item with buy-it-now. All it takes is one over-eager bidder to place a bid at your starting price to make that nickle investment worthless. Charging the cost for listing with Buy-it-now just doesn't make that much sense. Why doesn't eBay think these things through?!?!
posted on January 17, 2002 06:47:21 AM new
Article in Paper Wednesday January 16, 2002
Earnings at eBay better than expected
San Jose Calif.(AP)
Quarterly earnings at eBay Inc. beat analysts' expectations Tuesday, and the Internet trading site offered a strong outlook for the first half of 2002.
After casting itself as a major shopping destination over the holidays rather than a specialty site for hard to find used items, eBay saw fourth quarter profits rise 9 percent and revenue jump 64 persent.
The San Jose based company earned $25.9 million or 9 cents a share, on revenue of $219.4 million in the quarter, which ended Dec. 331. In the comparable period of 2000, eBay earned a 23.9 million or 9 cents a share, on revenue of $134 million.
Excluding one-time charges, eBay said it would have earned 38.5 million.
****
Now where is the justification of raising rates. With Enron, KMart, Chase Bank in trouble and the Stock Exchange dropping points like flies, eBay wants to pad their pockets more. Would I ever like to get a 9 percent increase in pay.
Now along with sellers gougeing on S/H that certainly is going to bring the buyers back to the B/M shops. Now it will cost me almost double to list, pay fees on my %5.00 items. I think it is flea market time to dump my goods. Can't wait for summer
OPPS I had to many million added to one of the figures. But what is one more million to eBay.
[ edited by Libra63 on Jan 17, 2002 06:53 AM ]
posted on January 17, 2002 08:11:02 AM new
Its only a matter of time till eBay hurts itself. It is getting to the point where sellers simply cant afford those high fees. Sellers should stick together and move to yahoo. The buyers would follow in quick order. By the way did anyone else get a yahoo auctions hat from yahoo? I got one last week and I NEVER got ANYTHING from eBay. That is good business on yahoo's part.
posted on January 17, 2002 08:18:30 AM new
Sellers leaving eBay is definitely going to be tough. Our relationship with eBay is known as The Battered Wife Syndrome. Sellers get slapped and kicked around, they leave for a while, but come back -- "Honey, there just ain't nowhere to go."
posted on January 17, 2002 08:19:41 AM new
eauctionmgnt ... Good point. Does the BIN feature still automatically disappear if someone places a bid lower than the BIN price? If so, I can see a problem here. eBay is going to have to figure out a way to leave the BIN feature active regardless of lower bids and only charge the nickel when the BIN feature is actually used.
posted on January 17, 2002 08:34:54 AM new
Another reason to be happy about my decision to remove ebaY from my business plans. They take more and more control from the sellers and at the same time they take more and more money.
Since I left ebaY my net profits have gone up over 30%. A website of your own is the way to go. If you take the money that you waste on en ebaY fees and apply it to creating and promoting your own website, your profits will go up and your stress level will go down. I couldn't be happier with my decision to leave ebaY and I have no doubt that a lot of others will too. It's only a matter of time.
posted on January 17, 2002 08:48:42 AM new
"Charging the cost for listing with Buy-it-now just doesn't make that much sense. Why doesn't eBay think these things through?!?!"
I think they thought through it just fine. A nickel for every listing sounds better than, say, $.15 per BIN, even if they produce the same amount of revenue, they'd rather have a lower number in people's minds ("only a nickel!" ).
[ edited by captainkirk on Jan 17, 2002 08:49 AM ]
posted on January 17, 2002 09:07:37 AM new
You could gamble by adding a reserve price = to your buy-it-now price (or just under). This will keep BIN available throughout the auction AND if BIN is used OR the auction just drifts up higher anyway, you will get a credit for the reserve.
The only problem is that if it doesn't hit the reserve price, the item doesn't sell AND you get hit with all the fees.
posted on January 17, 2002 09:22:53 AM new
Let's face it, there are no other viable options for auction sellers. It's eBay or don't sell in auction format. It's that simple.
As long as the above is the case, eBay can do whatever they want and users will have to stomach it.
As a side note, I'll continue to own eBay stock as long as the above realities hold true.
posted on January 17, 2002 09:32:07 AM new
the cost of selling on ebay is getting rather pricey-listing fee,picture hosting fee,buy it now fee,final value fee.
then comes paypal/billpoint fee.
then if there is a chargeback,there could be a chargeback fee.
so what is the answer??sell more,sell less,sell expensive items,sell cheap items??
or dont sell,sit on the side line and watch??
let other sellers laugh all the way to the bank or watch them go under like kmart,service merchandise and fingerhut??
posted on January 17, 2002 10:09:27 AM new
the only problem is there only so much you can charge with shipping and handling,especially if you ship usps as buyers can read the postage and arrive at how much you are keeping.
read other thread by REAMOND on paying 10 dollars and think handling fee over 50 cents is too much.
i dont mind paying for shipping and handling comparable to those charged by mail order house if it is packed and shipped professionally,recently ebay jewelry sellers charge 6-7 dollars for shipping,they just ship first class mail in a padded envelope with no insurance or just dc .
posted on January 17, 2002 10:23:51 AM new
It's a level playing field for all sellers, so the increases will effect everyone who sells on the site.
In order to run our businesses effictively, we, as sellers, are going to have to find a way to either absorb or pass along these costs. I'll be raising our S&H fees in order to recover some of these increases. I'll continue to charge a reasonble amount that covers the cost of postage along with any overhead that is associated in processing, listing, inventoring and shipping orders. It won't be absorbetant, but will reflect the realistic costs associated in providing these services.
A reasonable profit is entitled for running our business and I won't apologize for taking measure to assure that we are profitable. It's business 101.
Since we are not able dictate the final selling price of auctions, adjusting shipping and handling fees is one way to assure that the increases are not taken directly out of pocket and deducted from our bottom line.
The increases are not earth shattering, so a little bump will be taken and we'll still continue to go about our business.
posted on January 17, 2002 10:25:27 AM new
Everything goes up in price over time. I do think the BIN should have simply been built into the listing fee--it is essentially a listing expense. Making it more like a reserve charge is counterproductive: people do buy more with BIN.
I've listed less and less on eBay primarily because of the fees: getting charged for something that doesn't sell is counterproductive: it reduces the number of items you can afford to offer for sale when the margins per item are small. I find it actually better to take the higher fees on Half because I know the buying audience is there.
posted on January 17, 2002 10:32:04 AM newI'll be raising our S&H fees in order to recover some of these increases.
That doesn't make sense. Why piss off your customers even more with an overinflated shipping charge? Why not raise the starting bid instead, and be a little more upfront and honest.
posted on January 17, 2002 10:40:44 AM new
This has been covered in great deal before, but basically doing anything to your starting price DOES NOT address your fees or fee increases.
The fees are your cost of doing business, period and are a percentage of the sale price. So inflating the start price doesn't do anything toward recovering these fee increases -- a percent is a percent is a percent. Listing fees didn't change, the only change is the BIN price. I think ebay should reconsider this fee -- though I will use it anyway -- it's well worth a nickel to have it there and sell outright.
posted on January 17, 2002 10:48:00 AM new
One more thing -- it's not an OVERinflated shipping charge. Shipping IS NOT JUST POSTAGE. When will people learn that? Shipping is every cost associated with getting an item from the Seller to the Buyer. Admittedly listing fees should come out of the item's selling price itself, but increasing the starting price of the item won't cover increased listing and FV fees.
Before the increase, you list an item starting at $5 and it sells for $20. Fine. After the increase, listing the item for $5.05 or more won't make it sell for $20 + the same increase! It doesn't work that way. The item will still sell for around $20 either before or after the ebay increase.
This is simply a cost of doing business and our margins all just got a little smaller. One FAIR way to make this up is to charge for things that you were normally doing for free -- i.e. handling fees.
I doubt many sellers recoup all their expenses related to shipping an item -- as ebay/PayPal/Billpoint increase their charges, it is going to become more important for sellers to recover costs on things they've been giving for free before -- including handling.
Handling is not a ripoff of the customer -- its a valid charge. Admitedly there ARE people who take advantage of this and charge exorbitant handling fees -- but so long as it is listed up front, NO ONE has a right to complain - you just don't bid on their items and move along.
The wise seller will charge a fair and proper amount for SHIPPING AND HANDLING to make sure they aren't losing their shirt in the deal. Those sellers who state that charging anything over actual postage is wrong are just blowing smoke and don't know what they are talking about when it comes to running a business.
posted on January 17, 2002 11:14:42 AM new
The analogy I am thinking of is this: If the price of food goes up, do I have to pay more to drive to the store to buy it, or do I have to pay more for it when I hit the checkout counter?
I fully understand the costs to ship and "handle" stuff and I know that there are 1000 honest folks who are interesting in retrieving their shipping costs only for every 10 who gouge and use this to try to make up for a low bid price (you know, the type who include a cost for the electricity to run their PC, a piece of their mortgage payment, cost of gas to drive to the post office, hourly pay for standing in line, etc.).
I just don't think the raising of eBay fees has anything to do with a shipping and handling charge.
OTOH, the upcoming increase in USPS rates (just raised this week in Canada) is justification to raise shipping rates. In my case, it'll cost me an extra nickel to send a letter to the USA ... I'll raise my prices 5 cents and that's all.
I have no problem whatsoever with a seller increasing their prices due to an eBay grab -- just don't add it to the shipping charge and feel good about it
posted on January 17, 2002 11:32:40 AM new
I guess the point is, that there is really no other place to add this increase. Adding to the start price does nothing but insure you'll break even -- it doesn't really *recover* these costs. The Final Value will remain the same and you just lose a bigger chunk of it. The item will still sell for X and you'll just get X-2 instead of X-1 which you were getting.
posted on January 17, 2002 11:33:58 AM new
peiklk,
Most of my auctions sell for the initial bid price, so adding the fee increase to the starting bid price WILL help.
I agree with your rationale for extra handling charges. However, if the difference between actual postage and the S&H charge is too large people will complain, with some justification.
I charge a flat $3 to mail a book, which give me about $1.10 above actual mailing cost. One in every 100 customers complain, but I figure those people just aren't too bright.
posted on January 17, 2002 11:38:42 AM newI charge a flat $3 to mail a book, which give me about $1.10 above actual mailing cost. One in every 100 customers complain, but I figure those people just aren't too bright.
In fact, they are the bright ones. They have figured out that you are making a 38% profit on your shipping charges ... I'd be pissed off too
Under your scenerio, every catalog seller in the country would be viewed as dishonest to its customers. They all charge shipping and handling fees with their orders and it's always greater than the actual cost of postage.
If an auction seller lists a shipping charge up front and this figure represents the cost of postage, plus handling fees, how is it deceptive of dishonest to customers?
Example:
Winning Bidders pay $7.00 for Priority Mail shipment with delivery confirmation to your specified US address.
Following are legitimate expenses that are incurred in shipping any package: Labor, transportation, packing peanuts, tape, postage machine leases, software upgrades, postage machine supplies just to name a few. The actual list is much longer.
To ignore or defute the above cost realities is ridiculous. They are real costs and must be recouped. To presume that these materials and services are to be provided to you free of charge as a buyer is nonsense.
Why should a seller be expected to rely on a high selling price, which they cannot control, in order to recoup their expenses?
The days of "free" are over. And the internet sellers that provided things "free" are gone. They are defunct companies, bankrupt, out of business, Kapoot! The companies that remain understand the basis principles of business and things cannot be provide free of charge just because we are selling over the internet. Show me one seller that provides shipping under his/her actual cost and I'll show you that they are not an actual business trying to make money. The occassional seller who is listing things for "thrills" is not a business.
It's time to wake up and smell the coffee folks! You're either in the game or your out of the game and if you want to give things away free, you won't be around long.
I'm probably preaching to the wrong folks, as 99% of the people who complete this post will say "no kidding", tell me something I don't know after reading it....
Adding to the start price does nothing but insure you'll break even -- it doesn't really *recover* these costs. The Final Value will remain the same and you just lose a bigger chunk of it. The item will still sell for X and you'll just get X-2 instead of X-1 which you were getting.