Ebay Raises Seller Fees Again!

This morning I recieved an email from the President of eBay, Bill Cobb, explaining the new fee increase. Happy New Year to you too, Bill! Most people start the new year off with a raise or a cost of living increase. Ebay sellers greet each new year with what amounts to a pay cut.

EBay has raised fees almost every single year since I have been selling (since January 2000) and adds new fees any time they like. In July 2006, there was a HUGE fee increase, including an almost 50% increase on the eBay store subscription. I was hoping that we would not be faced with any new increases for awhile. Yeah, right. Wishful thinking.

The fees are raised in one area only, for example, final value fees, and the insertion fees are left alone. The next time they raise insertion fees. Then they raise "specialty" fees, such as gallery (photos), Buy it Now fees, and auction length fees. They have fiddled and fiddled with all of the different fees to make it look like nothing is happening. They go around in a perfect circle, each time with an interesting explanation to match the increase. A nickel here, a dime there, a penny there. With millions of items up for sale each day on ebay, a nickel increase generates millions for the company.

In July, the sellers got a long drawn-out explanation behind the fees. It seems it wasn't fair, so they were going to raise some of the fees to make it more fair! Today the explanation is that they are spending our money "driving buyers to the site". The commercials and the direct mail advertising are lame. That did not help me sell my sector, which is gently used clothing. Did eBay run a commecial explaining about used mens suit in great shape for a song? No, instead they pushed "brand new" inventory, electronics, jewelry and ipods. Never mind that the mark-up on new items is next to nothing for the sellers. If you purchase new items wholesale and discount them on eBay, then pay fees, the margin of profit is slim, if anything.

The listing fees are going up 5 cents and final value fees going from 3% to 3.25%. I feel nickel and dimed to death. On one item which I was selling for $30, ebay and paypal took $5 in fees. The wholesale price was $22, making no room for any mistakes or profit.

A number of sellers try to protest by not listing anything or opening cheaper auction sites. Unfortunately this never works because EBay has the only real name recognition as an auction site in the U.S. There are others, but if no one knows about them, your stuff won't sell.

From the email: "Let me say that, while we believe these changes are modest, we consider any changes that may impact our sellers with great care. These adjustments are the result of careful analysis and we believe they're the right thing to do to keep the marketplace strong for our eBay.com sellers."

What does that mean? I do not think they have considered how this is going to impact me. In any case, I know that ebay is trying to expand into China. Apparently they lost the market in Japan, which uses Yahoo Auctions as its main auction site, and do not want to lose China. I would imagine that they need a lot of money to get ebay started in China, and that is one of the major reasons for the fee increases.

More and more people sell on ebay each day. So although eBay has bigger expenses, and is running a larger enterprise, those expenses should be covered through existing fees. If there are more sellers and more items, there are more fees to collect.

Actually, this summer they promised us that the new fee structure was exactly what was needed to straighten out the company. They also claimed that no more fees were on the horizon. They plainly lied to us last summer. As my expenses increase, my competition increases as well, which always pushes down prices. The more competition, the cheaper I have to sell my wares to stay competitive. The higher the fees, the less money I make. The less money I make, the less I want to continue doing this for a living.