EBay is about to increase its seller fees to 10%
pages.ebay.com
pages.ebay.com
While considering a price adjustment on a high-value item I'm selling, I went to their fee calculator to explore some other price points. I was mystified to see not only the fee I expected of ~$55, but a 'New Fee' of $123. Thinking I'd made a mistake, I explored further, and noticed that as of April 16, casual sellers who don't have an eBay 'store' will be charged 10% of their final sale value in fees. Store owners will keep the existing fee schedule, but it will cost them a monthly fee beginning at $16/mo. Add in the 3% Paypal fee and they're taking a very large cut. For many categories of goods, this represents a doubling of current fees.
I only discovered this by accident; I listed the item yesterday and there wasn't any warning about an impending fee increase. They haven't sent any notifications by email or to my eBay mailbox either; seems this is being rolled out quietly.
Now I'm lowering my price in search of a quicker sale rather than risk paying an extra $70.
EDIT: I've just realized that this fee increase begins right after Tax Day in the US - when many people list and purchase items because it's time to pay taxes or receive a tax refund. I've always defended moderate eBay fees because they provide relatively smooth access to a big marketplace, but not any more - this is pretty sleazy.
I'm surprised they haven't been disrupted already. The only real secret sauce they've got is a huge amount of traffic. How could you ever compete with a household name where success is determined by traffic and volume?
Ebay bought them in 2004 for nearly $300m, but they've yet to scrap the free listings..
In Poland we had ebay clone (allegro.pl) several years before ebay. Then ebay tried to enter the market several times, failed each time. There also were several other startups trying to conquer this space with much lower fees, but they also failed.
Well, you may need to wait another 10+ years for their "business method" patents to expire.
eBay can leave them to bubble along making next to nothing (relatively), competing with each other for the few users who are looking for and managing to find an alternative, and hope they just die out. If one does end up looking like they might have a chance of growing to a size worth caring about, then the legal team will be called to action.
If there is a real issue with high value items, that might be a way to select a niche.
But there is no way that I'm going to just silently eat fees of 12-13% (including Paypal transaction charges), when I also pay shipping, insurance, and signature confirmation fees to minimize the risks of chargebacks on items costing hundreds or thousands of dollars. I have other markets I can sell in, of people who I've known for years on pro audio forums and a moderately active electronic music scene where I live. I liked selling on eBay because I could usually get a 10% premium or so over a local sale, but now that margin has disappeared. bulk dealers will just treat it as a cost of doing business, but traders in specialty markets like myself will just raise their prices or sell in informal markets. As a buyer I'm also much less inclined to subsidize ebay.
User acquisition of auction customers is indeed expensive, but I bet there are opportunities in peer to peer trust arrangements similar to escrow transactions.
I like where you are going with that. I can envision a marketplace that is built around consumer trust and seller expertise, I just don't think that eBay is that marketplace.
We're trying to solve this problem (among others) with our product SellSimple. Free app, free postings, and 5% if it sells.
Check it out, would love to know what you think: http://sellsimple.com
Disclosure: co-founder of SellSimple
1. Sharing your listing on social networks (good, not great for driving traffic).
2. Ability to list on multiple marketplaces, so you don't NEED to sell it through SellSimple - you can still list it on ebay, craigslist, etsy, etc. If it sells on one of those marketplaces, we'll auto-delete your item from SellSimple and all the other marketplaces. You're also not charged any SellSimple fee if it sells somewhere else.
3. Retention features on iOS - can't compare to eBays network, but downloads are growing quickly and users are buying items.
This is more a long-term strategy help to help us overcome chicken - egg. If we can exist long enough for that to happen through a free posting tool - we'll be able to (eventually) have enough traffic on our own listings to generate a high sell-through rate.
Your fees are 5%, eBay users will soon be charged 13% (including PayPal fee). So give your sellers the option to list on SellSimple for a price 5% less than eBay. For example, a $100 item on eBay would sell for $95 on your site.
Then in the ebay listing description add some key phrase like "Heyy Folks Be Quick" - the buyers will quickly learn that such a phrase means "get a 5% discount by making your purchase through SellSimple".
Likewise, adding a phrase which may even suggest purchasing for less on another marketplace will probably lead to them editing or removing the listing from eBay as well.
If you are going to do that idea then, do it as a marketing campaign, not on eBay listings.
Right now we're using Balanced (awesome product - http://balancedpayments.com) to process payments & escrow funds.
Do you know of any API's that are similar to Balanced but for Bitcoins?
"par" is pronounced as in golf and emphasized.
Now that I'm typing this, it sounds a little crazy, but it's always worked for me.
But why does someone have to sign-in to buy? That is a major turn-off. I can't use something that people need to register an account for to buy. Just take a CC and shipping info and pass it to me.
Since all payments enter escrow, without an account, the buyer can't release the payment to the seller.
How would eBay enforce "your bid is a contract" for auctions without user authentication?
I'd really want to be able to scan over hundreds of results in seconds. Not tediously hover over each and every result to see what it's worth. It takes too long.
After years of fighting and with a dedicated team, eBay is still losing that battle.
And, as the "conduit" for this fraud, you will be blamed by both buyers and sellers, which is obviously no good for your brand.
Not to be negative, but fraud can literally put you out of business.
We've already encountered a bunch of fraud early when our system was less developed. Luckily we caught all of those and have had time to grow / build a plan of attack.
We'll never be able to eliminate fraud - but we can make it a pain in the a for a black-hatter to use SellSimple over the hundreds of alternative places.
Few ways:
1. Escrow via Balanced 2. Shipment Purchasing, Tracking & Confirmation all in-app. 3. QR code scanning to release payments for meetups. 4. Verified sellers. 5. Fraud API's - https://siftscience.com/ & https://www.signifyd.com/
If they do get passed all of the systems, there is still large chance they screwed up somewhere and it will be pretty obvious to us what happened. That said - its an uphill battle.
But, fraudsters are relentless and they come in waves. You beat them back, all goes silent, then they come back with a vengeance. It never stops and they are inventive. Much of the fraud comes from outside the U.S. as well (China-big time in our experience), so there's virtually zero chance of prosecution. So, these guys have nothing to lose and everything to gain. If they get busted, they just don't get their money. It's all upside for them.
BTW, I used to think that raising the bar so they'll go elsewhere would be sufficient. It definitely helps, but it's not how it works. If there is any opportunity, there will be parties who persistently work you to find it, such that it will be a constant fight for you.
In any event, you are right that you will most likely be able to detect them at some point. It's just the cost/time involved and the damage to your brand/customers as they keep changing tactics. One thing you should assume is that whatever you put in place, they will defeat at some point. It is guaranteed.
Finally, services like siftscience also help, but they tend to just raise the signal and/or help you to corroborate suspicions. It can still take quite a bit of effort and invariably human interaction to interpret those signals.
Not that it can't be done. Just encouraging you to brace yourself for the fight ahead. While you may be starting out to build a marketplace, you will likely find that you spend more time in the fraud-detection business.
Good luck and kudos on your progress to date.
Worked very well for me in Australia and was mostly free (you only pay for 'premium' listings). You did have to sell locally and usually actually meet the people you were selling to, but it did seem to work.
There are thousands upon thousands of small stores - I believe the alternative to eBay should be a vertical search engine that aggregates all those stores.
Maybe a homogeneus e-commerce platform (with some sort of discoverability for their items) + vertical search engines.
For the individual "garage sale" sellers, something like Craigslist or other classifieds, that just has a listing fee and doesn't handle payment & shipping.
Why?
1) Buyers need to trust the sellers and without the history and system already in place, it's not going to happen. You didn't need this system in place when Ebay started, because it was such a new idea.
2) Without the buyers, the sellers won't bother. I've been a seller for a couple of years and all of the smaller sites combined don't even compare to the number of sales I get on Ebay (Amazon is the other big marketplace).
I don't even waste my time on the other sites anymore.
Why? Fraud. The first time, I didn't set the option to only sell to established users. I got bids from people with minutes-old accounts that I knew were fraudsters waiting for the end of the auction. Sure enough, they tried to pull a scam and I contacted ebay. After weeks they ended up locking that account. I relisted and the same buyer bid, even though I really cranked up the safety controls that an ebay customer support rep told me to use. The winning bidder? Account created 5 minutes before. I called ebay, said the email I got from the winner was a carbon copy of the first, fraudulent bidder's email.... it still took weeks while I waited for the auction to be voided. The total time I lost was well over a month.
On Craigslist, I definitely got a bunch of scammers, but they had no power over me. I just ignored their emails and waited for someone serious, which didn't take but a few days and we finished the deal at a local bank. We were both happy with the transaction.
I will NEVER use ebay to sell again.
FYI: I sell on both Amazon and eBay. On ebay I pay for "Buy it Now" listings ($0.50 insertion) and 11% final value fee. So for me the cost is going to drop by 1% and .50 cents.
eBay is doing this to compete and catch up to Amazon. Auctions are a fad on their way out, and "buy it now" is where it's all at. Store style.
Amazon fees are MUCH worse than ebay + paypal fees combined, btw. Plus on Amazon you can't have calculated shipping so you have to buffer your shipping. I had to lie about my calendar weighing 4lbs just so I can force Amazon to calculate shipping more fairly. So sometimes you lose some money and sometimes you win. While on eBay calculated shipping charges buyers based on dimensions, weight, and destination so you charge your buyer the exact shipping cost down to the penny.
The problem with the OLD ebay rates is that they discouraged people from posting "Buy It Now" items. There's a barrier to entry. If you wanted to sell, lets say, 10 products on ebay with a "buy it now" price you had to pay 0.50/listing (not per item or sale) and they would be on there for a month /or/ until that item's quantity reached Zero and sold out. Now, you can put up to 50 items on ebay for free.
Ebay's old prices favored Auctions, ebay's new prices favor store style listings. It's now cheaper to start a store on ebay.
I actually prefer Buy It Now to auctions, but I don't agree that they're a fad on their way out. Perhaps that's because I tend to trade high value rather than commodity items. I don't sell on Amazon and have no opinion about their fee structure; looking at at my own sales history it seems like eBay was about the same or very slightly more up to now, but Amazon will be significantly cheaper going forward, at least for anything over about $100.
EDIT: for my items, the fees are higher than eBay. YMMV. http://www.amazon.com/gp/help/customer/display.html?nodeId=1...
It in the Fixed price listings—basic fees, under "All other categories". It's 11%.
Also, my first time on Amazon, someone from a US military base in a foreign country ordered my product. Crap. I have never had to ship anything out of the US.
With eBay I can specify no returns + US shipping only. My experiment with Amazon is probably over. I like how fast things sell, but I think eBay makes more business sense for small timers.
While it does probably amount to an increase overall, there are certainly plenty of situations where the fees will be lower. And without doubt, they are now far simpler than before, which is important. Being able to quickly determine what it will cost to sell an item on eBay may well make casual sellers more likely to do so, even if they end up paying slightly more on average than with the complex rules.
For the larger stuff, they don't have as strong a competitor (outside local options like craigslist), so they probably figure they can afford to boost their margins, and bundling it in with a 'simplification' and cuts elsewhere is a convenient time to do it.
I wonder what they are going to do when all the bigger ticket items start disappearing from listings, except for those with $250 a year stores of course.
Don't you know that this is a simplification of the fees for casual sellers, where before, there were multiple tranches for listing an item, and if it sold successfully, you also paid a final value fee.
The new fees represent a simpler and better to understand system, where the first 50 items per month for casual sellers are free to list, and easy to understand final value fee.
This is in fact a decline in % of what you would pay!
[1] http://en.wikipedia.org/wiki/List_of_acquisitions_by_eBay
"Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose — but if we fight in the river, we win." --Jack Ma.
Seriously, classifieds and auctions of niche items is precisely where I'm headed and the more that eBay taint their product in the eyes of sellers and buyers, the better.
So, ebay is actually giving great price to sellers who sell at scale (now they can open an ebay store, which is definitely a good deal!). They are just trying to promote the adoption of eBay Stores which helps their business and sellers! What's wrong with that?
When Mr. SellSimple reaches the scale at which eBay does their business, we will see how "good" they play and we start critizing them when they actually try to make money (4% cut won't help you in scaling the business).
For casual sellers (the guy who sells his iphone once in 2yrs): They will need to pay 1% extra, which is frankly not much. I sold my iphone4 after 2yrs for $240 + $6 shipping on eBay. I don't mind paying 1% extra.
This is not true. It was pretty much the same as the store owner structure with a range of fees for different categories. Don't you think that I checked my facts before posting?
You can verify this for yourself using the link below; for example, on a musical instrument selling for $1000 you save $0.50 in insertion fees but your final value goes from $63 to $100. For cameras and consumer electronics, including phones, the increase is greater, from $51.50 to $100. I trade several pieces of quality pro audio gear a year; these changes would cost me hundreds $ in either final value fees or monthly store fees.
http://pages.ebay.com/sellerinformation/news/Feecalculator.h...
The news to me is that other countries used to get lower fees. I wonder why.
Now it's all $1.00 items with $16.00 shipping fees.
I've been using Craigslist to buy/sell. I would prefer a place that was targeted specifically at casual sellers.
No fees whatsoever for all HN affiliated sellers. hit us up at support@shoply.com and we will upgrade your account for free forever.
Edit: then I went back to double check and saw the little "sign up with email" link. Hurrah!
Edit2: it would be nice to view things near me. How do I search by geographic location?
This entity encompasses Paypal too, another very terrible service that simply won't ever go away.
Allow my distain for other people to show through. People will continue to use ebay and paypal, as they have been for far far too long regardless of any fee increase. It is the same reason people still use Facebook. Because the synapses in their brain get configured one time, set and forget. Use facebook forever.
Use ebay forever, use paypal non stop. Buy EA products. Keep paying your cable tv bills. Oppose change when it is ever actually finally suggested and put fourth by congress.
God this world is stupid.
If your whole business is pointing to eBay, or all your friends and photos are currently on Facebook, you've got to tell everyone that you've just changed URL.
There's a lot of cost in changing. Sometimes the cost of staying with a service outweighs the cost of changing. You shouldn't assume otherwise.
My Nan has never changed her gas or electric provider in the UK ever since energy utilities were privatised 20 years ago. Sure, she's probably wasted thousands of pounds and she knows that, but she's happy. Meanwhile, we've changed provider about 10 times - and I honestly can't say that the savings have brought extra happiness.
Challenge: Find me a Runco LJR-II Laserdisc Player for sale outside of eBay.
If you do, then I'll delete my eBay account and learn to live without it.
Disclosure: Founder, together with Idealab
Do you guys agree? Are there other good alternatives?
with 0 fees, its up to buyers and sellers to deal between themselves, making money on related advertising instead and maybe seller verification
what do people think of that idea?
Also, no chargebacks on bitcoin. So, there is going to be a huge amount of scams. You need to at the very least set up an intermediary between all parties. This will effectively double shipping cost and delivery time on all sales.
www.bitmit.net