eBay raises fees -- again
Last time eBay Inc. (NASDAQ:EBAY) raised fees, at the end of the summer, there was a big uproar from eBay sellers. So much that here at BloggingStocks many of them found a venue to voice their passionate disappointment with eBay. Many debates ensued between eBay investors and eBay sellers, especially Store sellers whose fees have been hiked.
Well, yesterday afternoon eBay raised fees again, but this time it targeted auction listings. Insertion fee for the $1.00 to $9.99 level was raised by 5 cents (from 35c to 40c) and the final value fee for the $25.01 to $1,000.00 level from 3% to 3.25%. eBay Motors fees were also raised. The new fees will go into effect on January 30, 2007. eBay didn't raise its Stores fees or Store Inventory listings.
Bill Cobb, president of eBay North America announced the fee hike. He also gave some data about eBay's holiday season: According to Nielsen/NetRatings, traffic grew by 12% compared to last year during the holiday period (starting Black Friday) "and eBay was shoppers' number one destination that day with an impressive 7.5 million unique visitors." Apparently, eBay was the most visited Internet site on Cyber Monday as well with 5.6 million visitors.
Regarding 2007, Cobb said, "I think you'll find we're taking a surprisingly fresh look at some of the old challenges, and I'm excited about the road ahead."
As an investor, I'm naturally curious to see eBay's "fresh look," and while fee hikes are generally better for the bottom line, I'm also curious to see sellers reaction to these new fees. On the face of it, the fee hike doesn't seem to be that much, but depending on the item price and on the volume a seller does, the hike could amount to a considerable increase.
[Thank you, VC, for the email. Via auctionbytes]
Well, yesterday afternoon eBay raised fees again, but this time it targeted auction listings. Insertion fee for the $1.00 to $9.99 level was raised by 5 cents (from 35c to 40c) and the final value fee for the $25.01 to $1,000.00 level from 3% to 3.25%. eBay Motors fees were also raised. The new fees will go into effect on January 30, 2007. eBay didn't raise its Stores fees or Store Inventory listings.
Bill Cobb, president of eBay North America announced the fee hike. He also gave some data about eBay's holiday season: According to Nielsen/NetRatings, traffic grew by 12% compared to last year during the holiday period (starting Black Friday) "and eBay was shoppers' number one destination that day with an impressive 7.5 million unique visitors." Apparently, eBay was the most visited Internet site on Cyber Monday as well with 5.6 million visitors.
Regarding 2007, Cobb said, "I think you'll find we're taking a surprisingly fresh look at some of the old challenges, and I'm excited about the road ahead."
As an investor, I'm naturally curious to see eBay's "fresh look," and while fee hikes are generally better for the bottom line, I'm also curious to see sellers reaction to these new fees. On the face of it, the fee hike doesn't seem to be that much, but depending on the item price and on the volume a seller does, the hike could amount to a considerable increase.
[Thank you, VC, for the email. Via auctionbytes]











Reader Comments (Page 1 of 1)
1-04-2007 @ 10:29AM
Jeff said...
As a person who just sold a pretty fair amount of excess personal property, my other option was a yard sale. I probably would have sold everything in a fraction of the time, but also at a fraction of the price. There isn't much of a choice, it's either or. Depending on the type of items being sold (usable or junk), Ebay presents a much broader audience to sell your stuff. I'll pay it, and not complain.
1-04-2007 @ 10:55AM
Katherine said...
I don't understand why ebay constantly feel the need to 'rebalance' their marketplace by raising fees and putting smaller sellers out of business.
No offence, but it may not matter to hobby sellers or occasional sellers whether ebay charge 10% or 20% or even 30% of your item's value for the priviledge of hosting your details BUT for the serious seller, whether that's the man shifting thousands of DVDs or the Mom and Pop sellers who are just trying to get by without welfare, yet another increase in the percentage ebay takes in fees can be a killer.
In fact, it will affect many of the small to medium sized businesses yet again, probably sending many to the wall and even large volume sellers on tight profit margins will struggle with this.
There are alternatives, places where it's free to list etc and for somewhere to pick up useful info on alternative auction sites and advice which could help with your ebay business please visit http://www.pheebay.com/ where you'll find forums and friends who can sympathise and hopefully help.
1-04-2007 @ 11:07AM
Frances said...
eBay is at the tipping point of losing customers to Craig's List and other free / low cost options for people who want to buy and sell on the internet. Sure the fee hike isn't too big, but when you add in the extra fees they take from using PayPal to process your transactions, they are really starting to take a big chunk of cash from people who are only making small change in the first place. I used to sell exclusively on eBay but the fees now force me to use other options as well.
In the end, high fees will be eBay's downfall not the key to its success.
1-04-2007 @ 11:49AM
Jim Beske said...
Just another example of a totally self absorbed financial giant taking advantage of their base!!
1-04-2007 @ 11:00AM
Sarah Trent said...
I think it's quite telling that they've aimed the core listing insertion fee hikes at the low priced items. I surmise that this is yet another attempt to remove cheap items from the core. It also suggests that the Store/SIF fee hikes of the summer didn't achieve the rebalance that they anticipated. I wonder why eBay are so desperate to distance themselves from their yard sale image/roots? Another question that puzzles me, is why then do they run two CLDs a month? Surely cutting back on the number of Cheap Listing Days is a faster way to remove tat from the core search and browse results?
1-04-2007 @ 11:34AM
jerry hague said...
I AM IN TOTAL AGREEMENT WITH SARAH.I SELL ON EBAY AND AT THE END OF THE MONTH ,IT KILLS ME ! CRAIGSLIST IS A GOOD PLACE TO SELL BUT ITS USUALLY ONLY LOCAL,WHICH LIMITS THE SALES.
1-04-2007 @ 12:39PM
Scott said...
According to where you fall in the spectrum of eBay fees, the additional .25%, on top of the paypal fees, brings eBay very, very close, if not beyond,the tipping point where the next shift to a new venue will happen.
One critical point that has been proven on the internet is that new venues can capture an audience overnight, without advertising, based solely on grassroots interest. eBay is eBay because it has the audience. That doesn't mean, however, that it is guaranteed an audience in a world as mobile as the internet. The fees were, frankly, high before, and my sense was that they had reached their peak. Trying to milk that last quarter point is going to drive better sellers to seek a new forum, and the herd may well shift. Where it will go, I haven't a clue, but Bill Cobb should have sought additional revenue streams from increased transactions rather than increased fees. He may have single handedly killed the golden good over a quarter point. And once the herd turns elsewhere, they will never come back. Oops.
1-04-2007 @ 11:49AM
Steve said...
yeah a friend and I where just talking this morning, its not like they need to raise fees to make a profit, they do that every year, on the back of the sellers.
Im not saying they cant make a buck, Im a business owner myself, but the rate increase ebay last fall was killer, especially for those of us with stores, jumped from .02 a listing to up to .10 easy and percentage wise it was crazy, now they take 12% of my items on top.
ouch.
I am trying Amazon and other places as well but they just dont seem to get the traffic
steve
1-04-2007 @ 12:09PM
Alex said...
Hi Melly, long time no see!
Naturally, due to my bearish disposition on EBay i'm going to disagree with you regarding the fee hike 'being a good thing'.
As mentioned, this one's going to hurt the sellers of low cost items. However, the impact will hit buyers more imho.
Why? Cheap Listing Days!
The last few months of 2006 saw an incredible number of CLDs (cheap listing days) in order to keep the listing numbers pumped. The last one was on the 27th Dec, which helped boost the figured back to the 16 mill mark from around 9.5 mill. Have a look today at the listing numbers. The 7 day listings from the CLD have ended and the listings on Ebay.com have fallen by 31%! They'll probably drop further in a couple of days when the 10 day listings end.
What happens on CLDs? The site gets flooded with attic clearances. I thought Ebay were keen to prevent 'clutter' as it 'impaired the buyers experience', which was their justification for last summers 'hide and hike' policy.
What will happen after the fee hike's implemented? Sellers will be less likely to use galleries to keep listing costs down (thus imparing the 'buyer's experience' further). They'll also be an even greater reliance on CLDs for attic clearers and sellers of low cost items.
If Ebay are looking to improve the 'buyer experience' why not REDUCE gallery fees? A 'dynamic' Ebay have overlooked I guess!
Still, for those who are sick of Ebay's constant moving of goalposts and 'unhealthy dynamics', you should check out www.tazbar.com. They've doubled in growth over the course of the past month or so, and they've got some fairly deep pockets for some more TV advertising (which is starting in the US soon).
1-04-2007 @ 12:56PM
Michele said...
eBay is pricing themselves right out of the market... And they deserve it... There are other venues out there, HiBidder.com and Tazbar.com just to name two good ones that provide better service for much much less...
I had to step away from the computer when I read the words "unhealthy dynamics"... Those were the exact condescending words they used in July... Who writes this garbage? And poor Cobb Man, he must have drawn the short straw to have been chosen to make that announcement, LOL...
St Elsewhere's get ready, eBay just handed you an entire new market, don't miss it...
1-04-2007 @ 9:33PM
Doug said...
Diversification has and contiues to be my goal driving traffic to my own website and using ebay to do that was a major part of the equation. That Being said the fact that I charge more for product on ebay and make less profit than I do on my own website leaves me wondering about the true value of the fees I am spending to receive this exposure.
Having a presence on wagglepop has proved to be exposure, but after 5 months absolutley no action or sales. Jump back into Amazon and was pleasantly surprised at the brisk sales since re activating my account as compared to my eBay store without any listing fees.
Numbers don't lie, many of the items I sell on ebay fall into the insertion fee area and on the other end many of my items will incur more final value fees. Adwords for the money is producing far better results at amuch lower cost, Yahoo search has yet to prove itself to me.
Pay Pal however I have always considered a necessity and it seemed on the surface a comparable value to many merchant services, with my foreign sales though I have begun to notice it is not quite as good abargain as it used to be my merchant account steadily out performs in cost savings.
So in a nutshell they did it and nothing will come of it as has many of the raises in fees in the past, just opens the eyes of the saavy to broaden the vision of their business plan, where ebay will become a smaller and smaller part of the picture.
1-05-2007 @ 6:17AM
Fruit Helmet Cat said...
Dear Melly,
Ebay wants us to be in that first tier of .99 or less auctions so bad that they jack up the fees for everything else. Those big bullies got some nerve! I think that the fee increase gets people riled up, not because it's an additional cost, but that it causes you to look at what level of products & services are you getting in return. There's a whole lot of nothing in those services, you have to be in it to understand that it's all flowery wording like the Office of Economic Development being the Unemployment office. Does that make sense?
I hear so often that Ebay is the most visited, but how much of that equates to sales. What's the sell-thru rate of visits to sales? Bill Cobb needs to stop thinking, because that big fat porker is walking around with a clear plastic helmet huffin' on some dangerous fumes that are diminishing his ability to remember what he's responsible for doing. Bubble boy gets excited over things like saying to the ebay members about how he was so bummed his wife got a neutral for giving a seller a neutral or eBay Matchups where he thinks traffic from internet users who stumble into the ebay spam on the search engines is the greatest innovation this company has every developed. All Google has to do is bust a cap in Ebays keyword spamming the internet and that'll show everyone that ebay is the most visited because they aggregate the most useless garbage of all internet sites. It's called relevancy and quality, something ebay has no idea about!
I'm still running for CEO of eBay, but now that Bill put his foot in his mouth, maybe I will take his job and just move up the food chain, what do you think? You better hope I don't show up on ebaymatchups again Bill because you'll lose just like you lost the last time!
1-05-2007 @ 7:12AM
DD said...
Hi Melly,
'Fresh Looks', 'Unhealthy Dynamics', and all the other cliches used to create investor and customer perceptions are about as useful too me as a prospective interviewee writing a company-valued skill set that they do not actually possess.
Yes, traffic is very important to any business, but is this all that they bring to the table? It's a little disappointing, to say the least.
I'd like to hear more about where all the fee increases are going to be invested by this company instead of the 'fluff' they continue to provide us (hint: this management communication is all to similar to what I've seen for the last year or so).
Still not convinced this company has an idea of where they are and/or are heading...a little scary to place my 'eggs' in this basket.
Perhaps I am missing something about this company, but with all the seemingly-hidden agendas and no concrete objectives by management, it's seems to be more entertaining to watch this company than to take it seriously.
1-05-2007 @ 7:41AM
Fruit Helmet Cat said...
Oh Melly, I just had another comment. I don't believe that eBayers should just pack up and leave. I think that if you are selling there to earn your living, you need to evaluate very carefully what the other venues are delivering and how that fits into your business needs. It is more than just having traffic, it's about whether your target audience of potential buyers will accept a site and the time involved to ramp up. For me I have changed my business strategy with ebay. I basically still sell full time on eBay but my business model is changing from a revenue model to lead generation. I plan my inventory further in advance,take advantage of promos to save on fees and I make sure that I communicate much closer with my existing customers who might be looking for sale items. My customers know i have the better stuff outside of ebay and every chance I get I tell them about Google, better ways to shop for deals and they appreciate that. When you have customers who have confidence in their merchant, they will buy from that merchant. Whether its on eBay, another venue, your own website or direct in an email. I make my customers #1 and that's the best branding you can invest in.
And I have stopped using ebays mailing list feature because 1) eBay censors it and 2) the mailing list will not let your customers interact. It is not for ebay to hinder me from communicating to those who wish to know more about me. If they want me to say only what they want, then they should just do it themselves otherwise stop being my boss and start being a venue.
1-05-2007 @ 9:47AM
VC said...
Your welcome, Mellie =)
Actually, some of us on the eBay forums have a theory that eBay is doing a staggered roll-out of fees this time. US/Canada first, then perhaps next month UK and Australia, followed by other countries - instead of every country hit at the same time like last summer where there weren't enough pinks spread around all the eBay forums for damage control.
eBay has also stepped up it's advertising campaign over the last 2 months and now (in australia) is on both TV and radio, as well as online commercials (eg in between online news reports). These sort of commercials are not cheap & I personally doubt they would have initiated it if not for the bad press they received over the last fee hike. Several sellers back then managed to get mainstream newspapers to write stories on the whole debarcle at the time.
This time though, my gut feeling it will be managed better by eBay. The fee rise is not that big. Those that leave will quickly realise there isn't a second "eBay" around as yet that will give the same traffic they need & so they will stick around.
The smart ones burnt over the last fee rise have taken some of their eggs out of eBay's single basket and now instead use eBay as a platform to divert traffic to private websites and smaller but fee-free auctions sites.
In the short term, eBay will make more money but they have lost loyalty from long-time members.
1-05-2007 @ 8:39PM
Vic C said...
Ebay sellers (and customers)should be disgusted. Their fees are too high and even though yes they are the big guy on the block we should still hold them to standards. Just like Wal Mart, Home Depot, Microsoft and other useless monolopies that are worshipped by our brainwashed public Ebay constantly claimes to be improving things but just adds onto their inneffiecient system with more useless "programs" and "marketing tools" while raising charges more annd inconveniencing even greater with useless pages filled with wasted words. In tech terms their site is in the stone ages. Any half witted software engineer can see they could at least provide a browser not that "Little Train That Could" interface on the web and the Turbo Lister program (which though I DO use and saves some time) that is inefficient at best with constant chugging, freezing, and looooooong downloads. Is it too much to ask their software that helps THEM make money as much as us actually WORKS??. I would LOVE to see a browser that lets sellers have their paypal account open while looking at auctions, feedback, etc on ONE page not the 75 page "tango dance" that has been around for a DECADE people...Hmmm maybe THAT would be a way to spend the money they are raking in from hiking fees. They make money hand over fist and the one things that used to make the site cool is now going away. SELECTION. Now less and less useful "deals" will be replaced by mass marketed modern crap. Why can't mass marketed Powerpunk sellers coexist with small business garage sales types?? They COULD still offer dealers like myself who deal in antiques 30 60 and 90 day sales histories like they used to in 1997. NOPE. They don't care that if you post 40 auctions and sell 20 you pay for all of them. Or that some buyers can be morons and waste your time by not following their "hands off" policies which are very conveniently simplified so eBay stays legally sound and we waste our time wondering if we should chase deadbeats or not. Sorry bout negativaty, I've just believed in these guys and had an account since 1996 just about when they started and it's sad such a great idea for this is still the same thing but 5 times the cost and squeezing out the small guy while it's now less useful for small ebayer. Plus living 30 miles from the SJ headquarters helps me understand their shaky business ethics so it sets me off. bye now. smiles all.
1-12-2007 @ 6:28AM
EZ said...
After years of eBay being the only one to make money on our auctions we developed our own solution. EZ33.com and we welcome any and all users that would like a refreshing and free break. Built by the people for the people, EZ33 was our only alternative to rising eBay fees.