The new eBay fees

Many sellers are saying that the fee changes are a fee increase rather than a decrease, and in fact for some that may be true. If previously you had a 100% or close to 100% sell through rate than the higher FVF may outweigh the lower Insertion Fee. For the majority of sellers however, especially those that rely heavily on fixed price format, total fees will decrease. Back end rebates of up to 40% are on new higher FVFs and so more generous than might be realised at first glance.

Final Value Fees

Examination of the FVF rebates reveals that for silver and bronze PowerSellers FVF rise slightly, for Platinum and Titanium PowerSellers FVF decrease slightly. For Gold PowerSellers FVF there is little change. The higher the selling price of your item the larger the FVF increase or decrease will be.

In other words if you’re a Gold Power Seller or above and qualify for discounts you’re better off and will make savings on your FVF. If you’re Bronze, Silver or not a PowerSeller you’ll pay more on FVF. The question that needs answering for those facing a FVF increase is “Do the lower Insertion fees balance the higher FVF?”

Insertion Fees

Insertion fees are down about 33% which is good news for everyone. As most sellers list more inventory than actually sells, even Bronze and Silver PowerSellers will benefit with higher FVF being balanced by lower Insertion fees. The following graph shows the cost per sale in eBay fees (Insertion plus FVF) before and after the changes but excluding any discounts.

As can be seen all sellers of fixed price items, regardless of price and sell through rate will make savings. An interesting effect of the fee changes is that sellers with the lowest sell through rates will make the greatest savings in comparison to the old fee schedule. The fee changes are weighted in favour of sellers with poorer success rates.

99p No Reserve Auction Fees

The only fees that will actually increase under the new fee schedule will be for sellers who use low start no reserve auctions. For sellers who use 99p start auctions exclusively the changes will result in slightly higher (combined Insertion and Final Value) Fees.

Discounts for Gold, Platinum and Titanium sellers, will reduce fees for 99p no reserve auctions and they will still see net fee savings.

Conclusions

There are very few sellers who will receive higher eBay invoices. Most sellers will make significant savings on Insertion Fees, which more than balance the higher FVF. The only sellers that won’t see a benefit are some using the auction format with low starts and high final values.

For Media and Technology sellers the news is even better. Insertion fees are down in these categories but FVF are not rising, back end discounts still apply for qualifying sellers.

Those worried that the new eBay UK fee structure will increase their eBay bill can rest easy. It’s almost a certainty you’ll save money unless you’re one of the small minority. Even for those sellers an increase in the volume sold and qualification for discounts will still result in savings.