mikemiller1955
Lieutenant General
- Joined
- Aug 3, 2008
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I found this intersting article...it's a good read...
March 16, 2011, 10:53 AM
EBay Inc. announced a new pricing structure yesterday that eliminates some upfront auction listing costs and incentivizes sellers to offer free and low-cost shipping.
Effective April 19, sellers will get their first 50 auction listings per month free and can add the fixed-price “Buy It Now” sales tool, also for free. EBay previously charged five to 25 cents per listing to use Buy It Now. Existing listing rates apply for auction items after the first 50.
The online marketplace also restructured its final value fees, which are the commissions it collects from shoppers and are based on the total value of a sale. EBay will now lump the cost of shipping into the total sale value, while at the same time reducing overall commissions by 1%-2%, depending on the item.
A rosy outlook from eBay
This means sellers who currently offer free or low-cost shipping will get a break on what they owe eBay. Sellers who charge high shipping costs will pay more. EBay says 30% of items sold by U.S. merchants already ship free.
The commission fee for apparel items, for example, drops from 12% to 10% under the new structure, but the commission will now be based on the final sale price of the item plus shipping.
So if a seller sells an apparel item for $40 and offers free shipping, he will now owe eBay $4 (10%), whereas before he owed $4.80 (12%). A seller who closes a $40 sale but charges $10 for shipping will pay eBay a $5 commission under the new rules, 20 cents more than previously, as eBay’s final value fee will now be based on a $50 total sale.
EBay says the changes allow both sellers and customers to benefit from an immediate purchase and that the new fee structures build upon a series of similar promotions implemented in 2010, which it says drove significant increases in both new sellers and new listings.
“As we look toward the future of commerce, eBay is positioning small sellers and larger merchants alike for growth,” says Christopher Payne, senior vice president and head of eBay North America. “We are listening to our customers and continue to tailor pricing to ensure the success of our sellers.”
Not all eBay sellers agree. Robert Bitto, owner of the SuenosImports eBay store, says the new fee structure will cause him to remove his products from the online marketplace, as it has become less and less profitable for him over the years. “I will lose at least $1,000 this year with the new fee rules. That’s a mortgage payment,” he says.
Bitto says he charges for shipping at the same rate that U.S. Postal Service or FedEx charges him. “This program is to encourage the lowest possible price for shipping, but I do that anyway,” he says. “I’m going to pump up my web site, pump up my sales on Etsy.com and by the end of the year I will have weaned myself off of eBay.”
Simone Klein, an occasional seller on eBay and owner of DesignKandy.com, says eBay is punishing all sellers for the actions of a small group of sellers that sell items at rock-bottom prices but then jack up the cost of shipping, thereby avoiding paying fees to eBay. For example, a seller might charge 1 cent for a pair of socks but then charge $20 to ship them and pocket the real shipping balance and avoid paying fees to eBay. “There are a few bad apples out there that make money off of shipping by adding huge amounts of handling charges, but most sellers are pretty fair," she says. The only winner here is eBay.”
Rich Rothbard, product manager at specialty camera retailer Cameta Camera which has a daily average of between 8,000 and 9,000 items on eBay and also sells on Amazon and through its own retail site, says web consumers today are savvy enough to look at the total price to find the best deal—and that includes shipping. “It doesn’t matter how you package it, what it comes down to is your overall gross price including shipping,” Rothbard says. “After price, the first thing a person looks at is if you offer free shipping.”
The fee changes will impact sellers differently, depending on the price point at which they sell and the cost at which they ship, says Scot Wingo, a long-time eBay observer and CEO of ChannelAdvisor, a firm that helps retailers sell through online marketplaces, search engines and comparison shopping sites.
Sellers of low-priced items with no free shipping options could see drastic fee increases. A CD merchant, for example, who sells a $5 CD and charges $5 for shipping pays eBay 75 cents (15% of $5) under the current structure, whereas a month from now they will pay $1.30 (13% of $10). Though an extra 55 cents may not seem like much, it could add up for some sellers, Wingo says. “These things are tricky because they always seem like nickels and dimes, but some of these guys are selling 100,000 CDs a month and this will have an enormous impact.”
The new rules will impact merchants that sell large, bulky items that are difficult to ship. When the high shipping costs of these types of items are lumped in with the item price, eBay will charge a much larger commission, Wingo says.
Sellers in these low-priced and high shipping cost categories will likely raise prices to offset the higher commissions eBay will charge, essentially passing on fee increases to the online marketplace shopper. “There are maybe 10% of the sellers that are in that bucket,” Wingo says. “For those kind of items, it will make it tough for eBay to be price competitive.”
4 Responses
9994571 wrote: March 16, 2011, 12:04 PM Dinesh Lathi VICE PRESIDENT, SELLER AND BUYER EXPERIENCE who concocted this latest horror show of added fees is a Harvard graduate of business. Like most text book ideologues, he brings his theories to the real world with every intent to fatten the wallets of himself and eBay’s stock holders. Every new generation of CEO’s and management changeovers that come into the Ebay fold have one goal in mind. To squeeze more profit out of it’s flock of sheepish eBay members. These members are eBay’s personal corporate livestock, and right now even in a struggling economy, eBay figures it’s time to harvest some more prime steak off its members backs. I personally see this is a down grade of my relationship with eBay which began in 1998. I am also a Power Seller and Top Rated Seller, but that does me little good if eBay engineers itself to make me its slave. I think this crushing fee add-on is going to backfire on Mr. Dinesh Lathi and I hope stock holders ask for his resignation. This man is moving eBay so far away from what made it successful, that he should be joining the government CZAR’s so he can continue to rule without oversight or approval of the people. Tyrant is the word of the day.
mojokat wrote: March 16, 2011, 2:18 PM eBay truly thinks its sellers are stupid. Fees assessed on shipping more than negate any little "freebies" eBay offers. eBay is doing this because it's been losing money to unethical sellers who play the system by selling their items for next-to-nothing and inflating their shipping fees to make up for it, yet eBay refuses to properly deal with these bad apples, preferring to throw a blanket fee over ALL its sellers. It's amusing how eBay pretends to "care" by encouraging its users to report these kinds of listings. I have reported COUNTLESS sellers who offer high priced items for a 99 cent "buy it now" with shipping as high as $1,500.00. eBay refuses to deal with these scumbags and I can prove it. I save all the items that I report in "my favorites", yet these listings are NEVER, EVER removed. Hasta la vista, eBay.
PBSCorp wrote: March 19, 2011, 1:52 PM This hurts, Shipping is expensive for me. I'm stuck with eBay as they are a monopoly, but I will close my eBay store in July for 1 month in protest to this and the continuing practices of eBay and PayPal.
F_Ellen wrote: March 22, 2011, 4:50 PM I was just getting ready to go back to eBay because I was so infuriated at the last time they tried doing a "we're lowering the costs" double back flip so they could make more money by changing the store's fee structure that I took almost everything off and did the absolute minimum just so my name could still get out there. And now they turn around and tell me that they have to charge 10% or so of my shipping fees. Well, Mr. eBay, I am sorry to say that the only possible way to counter that is to charge 10% MORE for shipping which I am sure will not make my customers happy. I am glad that I have found auctioninc.com for my own website that I can now have decent shipping prices that don't rake anyone over the coals-- my customer or myself. My dealings with them have been very positive, the few items that I have tested with are accurate to within just a few cents, I plan to have the rest of my parts listed with their 'add to cart' button by the time eBay gets it's fees adjusted.
March 16, 2011, 10:53 AM
EBay Inc. announced a new pricing structure yesterday that eliminates some upfront auction listing costs and incentivizes sellers to offer free and low-cost shipping.
Effective April 19, sellers will get their first 50 auction listings per month free and can add the fixed-price “Buy It Now” sales tool, also for free. EBay previously charged five to 25 cents per listing to use Buy It Now. Existing listing rates apply for auction items after the first 50.
The online marketplace also restructured its final value fees, which are the commissions it collects from shoppers and are based on the total value of a sale. EBay will now lump the cost of shipping into the total sale value, while at the same time reducing overall commissions by 1%-2%, depending on the item.
A rosy outlook from eBay
This means sellers who currently offer free or low-cost shipping will get a break on what they owe eBay. Sellers who charge high shipping costs will pay more. EBay says 30% of items sold by U.S. merchants already ship free.
The commission fee for apparel items, for example, drops from 12% to 10% under the new structure, but the commission will now be based on the final sale price of the item plus shipping.
So if a seller sells an apparel item for $40 and offers free shipping, he will now owe eBay $4 (10%), whereas before he owed $4.80 (12%). A seller who closes a $40 sale but charges $10 for shipping will pay eBay a $5 commission under the new rules, 20 cents more than previously, as eBay’s final value fee will now be based on a $50 total sale.
EBay says the changes allow both sellers and customers to benefit from an immediate purchase and that the new fee structures build upon a series of similar promotions implemented in 2010, which it says drove significant increases in both new sellers and new listings.
“As we look toward the future of commerce, eBay is positioning small sellers and larger merchants alike for growth,” says Christopher Payne, senior vice president and head of eBay North America. “We are listening to our customers and continue to tailor pricing to ensure the success of our sellers.”
Not all eBay sellers agree. Robert Bitto, owner of the SuenosImports eBay store, says the new fee structure will cause him to remove his products from the online marketplace, as it has become less and less profitable for him over the years. “I will lose at least $1,000 this year with the new fee rules. That’s a mortgage payment,” he says.
Bitto says he charges for shipping at the same rate that U.S. Postal Service or FedEx charges him. “This program is to encourage the lowest possible price for shipping, but I do that anyway,” he says. “I’m going to pump up my web site, pump up my sales on Etsy.com and by the end of the year I will have weaned myself off of eBay.”
Simone Klein, an occasional seller on eBay and owner of DesignKandy.com, says eBay is punishing all sellers for the actions of a small group of sellers that sell items at rock-bottom prices but then jack up the cost of shipping, thereby avoiding paying fees to eBay. For example, a seller might charge 1 cent for a pair of socks but then charge $20 to ship them and pocket the real shipping balance and avoid paying fees to eBay. “There are a few bad apples out there that make money off of shipping by adding huge amounts of handling charges, but most sellers are pretty fair," she says. The only winner here is eBay.”
Rich Rothbard, product manager at specialty camera retailer Cameta Camera which has a daily average of between 8,000 and 9,000 items on eBay and also sells on Amazon and through its own retail site, says web consumers today are savvy enough to look at the total price to find the best deal—and that includes shipping. “It doesn’t matter how you package it, what it comes down to is your overall gross price including shipping,” Rothbard says. “After price, the first thing a person looks at is if you offer free shipping.”
The fee changes will impact sellers differently, depending on the price point at which they sell and the cost at which they ship, says Scot Wingo, a long-time eBay observer and CEO of ChannelAdvisor, a firm that helps retailers sell through online marketplaces, search engines and comparison shopping sites.
Sellers of low-priced items with no free shipping options could see drastic fee increases. A CD merchant, for example, who sells a $5 CD and charges $5 for shipping pays eBay 75 cents (15% of $5) under the current structure, whereas a month from now they will pay $1.30 (13% of $10). Though an extra 55 cents may not seem like much, it could add up for some sellers, Wingo says. “These things are tricky because they always seem like nickels and dimes, but some of these guys are selling 100,000 CDs a month and this will have an enormous impact.”
The new rules will impact merchants that sell large, bulky items that are difficult to ship. When the high shipping costs of these types of items are lumped in with the item price, eBay will charge a much larger commission, Wingo says.
Sellers in these low-priced and high shipping cost categories will likely raise prices to offset the higher commissions eBay will charge, essentially passing on fee increases to the online marketplace shopper. “There are maybe 10% of the sellers that are in that bucket,” Wingo says. “For those kind of items, it will make it tough for eBay to be price competitive.”
4 Responses
9994571 wrote: March 16, 2011, 12:04 PM Dinesh Lathi VICE PRESIDENT, SELLER AND BUYER EXPERIENCE who concocted this latest horror show of added fees is a Harvard graduate of business. Like most text book ideologues, he brings his theories to the real world with every intent to fatten the wallets of himself and eBay’s stock holders. Every new generation of CEO’s and management changeovers that come into the Ebay fold have one goal in mind. To squeeze more profit out of it’s flock of sheepish eBay members. These members are eBay’s personal corporate livestock, and right now even in a struggling economy, eBay figures it’s time to harvest some more prime steak off its members backs. I personally see this is a down grade of my relationship with eBay which began in 1998. I am also a Power Seller and Top Rated Seller, but that does me little good if eBay engineers itself to make me its slave. I think this crushing fee add-on is going to backfire on Mr. Dinesh Lathi and I hope stock holders ask for his resignation. This man is moving eBay so far away from what made it successful, that he should be joining the government CZAR’s so he can continue to rule without oversight or approval of the people. Tyrant is the word of the day.
mojokat wrote: March 16, 2011, 2:18 PM eBay truly thinks its sellers are stupid. Fees assessed on shipping more than negate any little "freebies" eBay offers. eBay is doing this because it's been losing money to unethical sellers who play the system by selling their items for next-to-nothing and inflating their shipping fees to make up for it, yet eBay refuses to properly deal with these bad apples, preferring to throw a blanket fee over ALL its sellers. It's amusing how eBay pretends to "care" by encouraging its users to report these kinds of listings. I have reported COUNTLESS sellers who offer high priced items for a 99 cent "buy it now" with shipping as high as $1,500.00. eBay refuses to deal with these scumbags and I can prove it. I save all the items that I report in "my favorites", yet these listings are NEVER, EVER removed. Hasta la vista, eBay.
PBSCorp wrote: March 19, 2011, 1:52 PM This hurts, Shipping is expensive for me. I'm stuck with eBay as they are a monopoly, but I will close my eBay store in July for 1 month in protest to this and the continuing practices of eBay and PayPal.
F_Ellen wrote: March 22, 2011, 4:50 PM I was just getting ready to go back to eBay because I was so infuriated at the last time they tried doing a "we're lowering the costs" double back flip so they could make more money by changing the store's fee structure that I took almost everything off and did the absolute minimum just so my name could still get out there. And now they turn around and tell me that they have to charge 10% or so of my shipping fees. Well, Mr. eBay, I am sorry to say that the only possible way to counter that is to charge 10% MORE for shipping which I am sure will not make my customers happy. I am glad that I have found auctioninc.com for my own website that I can now have decent shipping prices that don't rake anyone over the coals-- my customer or myself. My dealings with them have been very positive, the few items that I have tested with are accurate to within just a few cents, I plan to have the rest of my parts listed with their 'add to cart' button by the time eBay gets it's fees adjusted.
