eBay to Lower Fees

Well, my art selling reader, or art buying readers, eBay has announced that effective Feb 1, 2008 they will reduce some of their fees. This is an exciting thing. They are lowering their listing fees, offering gallery free as well as a few other positive lowered prices. They pick the money they are loosing on that through raising their final value fees. Here's the break down:

Listing Fees:

$0.01 - $0.99	$0.20	$0.15 Lower fee!
$1.00 - $9.99	$0.40	$0.35      Lower fee!
$10.00 - $24.99	$0.60	$0.55      Lower fee!
$25.00 - $49.99	$1.20	$1.00      Lower fee!
$50.00 - $199.99	$2.40	$2.00      Lower fee!
$200.00 - $499.99	$3.60	$3.00      Lower fee!
$500.00 or more	$4.80	$4.00      Lower fee!

That's really not bad when you think about it, for those people who are selling items under $10 it's a good deal and for those selling above $25 it's even better.

Gallery Fees:

Starting or Reserve Price	Current Gallery Fee	Gallery Fee (effective 02/20/2008)
Auction-style Listings	$0.35	FREE
Fixed Price Listings	$0.35	FREE
Store Inventory Listings	$0.01	FREE
Classified Ads	Variable	FREE

That's an even better deal for anyone who used gallery.

Here's where things get interesting:

Closing Price	Final Value Fee	Final Value Fee (effective 02/20/2008)
Item not sold	No fee	No change
$0.01-$25.00	5.25% of the closing value	8.75% of the closing value
$25.01 - $1,000.00	5.25% of the initial $25.00, plus 3.25% of the remaining closing value balance ($25.01 to $1,000.00)	8.75% of the initial $25.00, plus 3.50% of the remaining closing value balance ($25.01 to $1,000.00)
Over $1,000.01	5.25% of the initial $25.00, plus 3.25% of the initial $25.00 - $1,000.00 plus 1.50% of the remaining closing value balance ($1,000.01 - closing value)	8.75% of the initial $25.00, plus 3.50% of the initial $25.00 - $1,000.00 plus 1.50% of the remaining closing value balance ($1,000.01 - closing value)

The difference don't seem too drastic but let's do the math on a $19.99 item, pre changes and post changes and see what the changes really are.

$19.99 Item listed @ $0.99
Old:
listing fee:$0.20
Gallery Fee $0.35
Buy it Now:$0.10
Final Value fee:$1.63
Total: $1.85= 9.25%

New:
listing fee:$0.15
Gallery Fee $0.00
Buy it Now:$0.10
Final Value fee:$1.75
Total: $2.00= 10.00%

A book sells for $54.50, I started the bidding at $9.99 used gallery and had buy it now. Here's the fees and how it all compares old to new.
Old:
listing fee:$0.40
Gallery Fee $0.35
Buy it Now:$0.20
Final Value fee:$2.28
Total: $3.23= 5.87%

New:
listing fee:$0.35
Gallery Fee $0.00
Buy it Now:$0.10
Final Value fee:$3.24
Total: $3.69= 6.71%

SO When you do the math, add it all up and figure out the percentages- eBay is actually charging you more than they did before, but only if your item sells. Also keep in mind that this doesn't include PayPal's fee structure- add an additional 3+% onto your final fees for them.  Again eBay screws the lower priced sellers. When I read the CNN article about eBay lowering their fees I was stoked but doing the math  leaves me cold.

The real question is this: Did eBay really think that they could effectively raise their prices for sellers, market it as a decrease in fees and that no one would notice?  This has got to be some sort of false advertisement.

Comments

[Judy]

Thanks for figuring this all out. I had a sneaking suspicion all wasn't as it seemed but had not yet sat down & done the math.

[alexia]

Yeah, hubs is on the ebay conference call - he does a lot of volume on ebay w/ the music store he works for, and he picked up on the smokescreen right away.

[LessHerger]

it's total garbage and proof that eBay doesn't care as much about it's sellers as it claims it does. I understand they need to increase their bottom line percentage wise to keep the stocks up, but they should make seller satisfaction a priority. this is proof positive that companies like eBay should NOT go public.