Today eBay announced that fees for sellers will be rising from the 3rd May 2012 in Technology Categories and the discounts for Top Rated Sellers will be reduced for transactions dated from the 1st May 2012.
Technology Categories Fee Increase
Technology fees have for the past year been the lowest in any category on eBay at just 3% and for low value items at the new rate of 5% will still be the lowest that they’ve ever been. However as soon as you get to higher value items the cost starts to kick in and for sellers of high value items (in all categories) eBay fees are the highest that they’ve ever been.
eBay explain that the Tech fees are still lower than industry competitors (Amazon!), and that the increase in Tech fees will enable them to make further improvements to retain their position as one of the top three technology online retailers.
eBay Motors
There will be a rise in the insertion fee for selling motors on eBay which is balanced by making Gallery Plus free for all business sellers. Insertion fees will rise from £8 to £10 but you’ll no longer have to pay the £2 for Gallery Plus.
Gallery itself was already free on eBay Motors. Gallery Plus displays a larger picture when you hover over the item in search results and if you have multiple images they will all be accessible through the search results page. This changes is simply making Gallery Plus compulsory for all sellers.
eBay made this change for Private Sellers back in September 2011 but it will also now apply to Business Sellers.
Top Rated Seller Discounts
The Top Rated Seller (TRS) final value fee discounts will be reduced by 10%, so the new discount rates will be 10%, 15% and 20% instead of the current 20%, 25% and 30% (depending on your level of business).
Relying on fee discounts to fund your business is never a good move, it’s too easy to drop a level or to lose TRS status. However eBay have introduced new benefits for TRS including protecting TRS status with a grace period, the opportunity to appear in the Value Box on product pages and the opportunity to buy Featured First. eBay say that an average 15% increase in sales for TRS results from a roughly 20-25% boost in Best Match which comes from TRS status.
Future Fee Increases
Fee increases are never good news, but for what it’s worth I can’t see how eBay can ever increase fees much more than their current levels.
In Clothing fees are now approaching 15% if you include PayPal fees so any more significant rises would put fees up towards the 20% mark and that’s just not sustainable for most businesses.
eBay has traditionally been a place to support and launch new Internet enterprises but if they price themselves out of the market that just won’t happen. Also as fees increase it become much more attractive to invest in your own website and take your business off eBay. However eBay is still the fastest growing eBay territory worldwide so to ignore eBay is to lose a big chunk of business, but if you can’t make the figures add up to a profit for your business than that’s an option you seriously need to consider.
An alternative of course is to list directly on overseas eBay sites and to pay the fees for the site you list on. Whilst that attracts a different set of buyers in a different country it’s definitely worth considering as an alternative to list on eBay UK but make sure you also check the insertion fees you’ll be paying.
37 Responses
This is indeed a bad news from greedy ebay
Great move– reducing the discount for top rated sellers ??
Why punish those sellers who are making E-Bay a reputable place to sell when business turnover is at the slowest it has ever been. Increasing fees and reducing discounts will force people to re-consider the viability of an E-Bay business.
Some great moves with other changes but then ebay always give you a blow to the head with reduced discounts for TRS!
We have worked our nuts off this year to keep it on five accounts, so it doesn’t fill me with love for ebay when they reduce this.
In some cat’s yes TRS is very important, but if your from Hong Kong and can offer 10’s of thousands of listings then it makes no difference.
Disappointed with this one ebay!
It strikes me as a bit perverse to punish eBay’s best sellers by reducing the FVF discount, particularly after the recent increase in the FVF fee to 10%.
However, this is eBay we are talking about so no real surprise.
If ebay were a growth business as they claim they would not need to cream off even more from their existing best customers.
If you want to improve surely what you do is cream off more from those sellers who perform poorly?
Not very nice on top of the Royal Mail increases.
Fees in collectables have increased to 10% in the past year and now my TRS discount is reduced to 10% as well… I hope eBay can offer some justification for all this… having read through their blurb, I really can’t see any though.
Actually if you reel back in time when service levels were bad on eBay, they had to do something to keep eBay in the marketplace. It was obvious to me that eBay offered these discounts as a dangling carrot to get sellers to improve their offerings. I always anticipating that the discounts will reduce or be eleminated entirely once the system reached quality standard. And to be fair how else would eBay have done this? I feel it was a good move to get the masses to offer a good service, and because of this we are still able to have a growing marketplace on eBay.
An ebay pink has said this. I would simply say that the investment mentioned below surely should be part of normal budgeting and not additional investment that can be actioned sooner as a result of a fee increase:-
Morning
One could argue you should never rely on a discount as part of your business model It’s not guaranteed.
We introduced discounts for eBay Top Rated Sellers in 2009 in order to incentivise sellers to achieve this status. And the results have been exceptional, with a large % of sellers now Top-rated representing 60% (UK) or 50% (DE) of all sold items.
These discounts are now being reduced; however sellers tell us that it’s the boost in search for Top-rated sellers that is the most important benefit, and that will continue with an average 20% boost in visibility in Best Match search, giving an increase of sales of 10-15% in addition to:
– the eBay Top-rated seller badge which signposts Top-rated sellers to buyers.
– Opportunity to appear in the Value Box when listing with a matching product from the eBay catalogue in Technology.
– Opportunity to buy Featured First.
Discounts of up to 20% on final value fees will still continue to be an important part of the programme and we have recently added greater stability for Top-rated sellers in terms of allowing them to remain in the programme in the case of one-off issues in the last seller update
The money being taken out of the discount program is going back into the Company in terms of:
– Marketing – major brand campaigns in terms of magazines/billboards/online and TV . All of this drives traffic to the site
– Mobile – £1 in every £10 on eBay UK comes through mobile because of the investments we have made and continue to make in mobile as a platform to buy (and sell). This provides new buyers and new buying opportunities
– Search – We are making major investments in new search technology so buyers find what they want more of the time. This improves conversion for sellers
– International Selling/Cross border trade – We are making major investments into simplifying and improving the experience of selling products across Europe – and the world. This adds to the number of buyers who may buy from a seller
– Search front end – We have made improvements to how products are presented to buyers to enable them to find what they want easier and quicker – this improves conversion for sellers
– We are investing in catalogues – structuring data in listings helps drive external searches to eBay
– We are investing greater amounts in Google and how that drives searches to eBay
– In the motors category we have created ‘find a part’ and ‘my garage’ to help buyers find the exact part they need
– In fashion we have made major improvements to the search experience for buyers to help them find what they are looking for
– We are investing in seller policies that enable sellers to edit and manage their listings more easily
Regards,
James
For large sellers their costs are nearing amazons. I dont think this is a good move as ebay dont have anything else to offer.
I personally think they are being greedy. At least wait till they have some of their market share and stability back before they p*ss off their biggest sellers who control the majority of their sales.
eBay will keep squeezing fees, a little at a time, for as long as they think they can. If you rely largely on eBay for your living then it could be time to diversify before you are locked in to dwindling margins. It is becoming more and more achievable, profitable and enjoyable to concentrate your selling on your own website, and to then use eBay as a supplementary channel.
Ebay do make reference to an examination of the fees set by competitors as part justification for their own rate setting and claim that they remain competitive. To be honest all things considered there ain’t a lot in it!
Why not make the fees even more competitive, attract more sellers, draw in more buyers from other marketplaces, and grow the business through offering even greater choice?
The only real advantage that ebay have is that they do offer a global marketplace. Those who do not require this must surely now be questioning the advantages of using ebay over other sites.
Hi all
I very much understand the issues raised here and the fact that fee increases are painful but just want to re-iterate what James posted on the boards around our investment in the site.
In addition to what James mentioned we are also making a major multi million pound investment in a UK nationwide television campaign to run from from next month. Our objective is to position eBay as a one-stop retail destination for all online shoppers and we hope that this investment, as well as many others, will drive more traffic to your listings and continue the strong growth that business sellers are achieving already on eBay.co.uk
More details on the upcoming campaign to follow.
Regards
Patrick Munden
The eBay Team
I hope the campaign won’t be focused just on ‘Outlet’ sellers and normal sellers are paying for this???
Good to hear about investment in the site, but it seems like poor form to apply fee increases now for improvements that are yet to be implemented. That looks more like a monopoly supplier exploiting their position. I’d also question whether some of the ‘improvements’ aren’t just fixes for existing flaws. sounds a bit like ‘we need to fix Best Match’.
If I were still selling exclusively on eBay then the fees I pay would now be in excess of £25k per annum. My website costs me less than a 10th of that and I can choose to re-invest the surplus in the site design, functionality and marketing, and still have a very sizeable chunk of the surplus left over :-). I can see a direct, tangible return on my investment. Sure, it takes time to grow sales on your own website. There’s hard work involved, too, but then I save lots of time elsewhere by not listing on eBay.
On my own website, every penny I invest is on my own business. On eBay I have the ‘satisfaction’ of seeing Outlets promoted on TV?
No contest.
I have just uploaded my first listings onto Amazon. Ebay are very silly.
Imagine if you went into Tesco today and they said they had put all the prices up as there is an advert on TV tonight.
To be honest I have been with ebay a long time and do have a soft spot for ebay. I just wish that sometimes they would look after their longer term sellers a little bit better. Special terms for length of service or something like that.
After 5 years you get 50% discount on listing fees or something like that as a thank you.
For me that would be the human thing to do.
I have been approached several times by amazon to start selling with a minimun of 400 items, this increase just makes it seem more and more attractive.You work harder and harder to hit all the goals that ebay want then they just knock you down again. I agree with Ryan, ebay are just becoming more and more greedy
I’m a big advocate of eBay, but this latest seller release isn’t especially inspiring.
I know plenty of sellers for whom the fee rises and the announced lowering of Top Rated discounts will present real challenges, and questions as to whether they can afford to be competitive on eBay.
Prices will only rise as a result, to cover the lower margins (aside from the cheap rubbish, of which there’s a surfeit on eBay) and that can’t be a good thing for buyers, either.
To top it off, the latest DSR and feedback protections aren’t applicable to a wide range of sellers (e.g. those who take longer than a day to ship – simply impossible if you’re selling a dishwasher or a weight set) and offer local pick-up.
Surprisingly, latest seller release isn’t especially pleasing. I really did expect more. It’s one squeeze after another. Sadly, sellers who rely on eBay, have little choice than to adapt and struggle.
And there’s no announcement about – for example – improvements to postage tables and clarification to buyers who wish to change their delivery address after paying with PayPal (invalidate buyer/ seller protection?) …and the ability to select the P&P to special domestic areas PER listing …and the scrapping of eCheques (about time!) – things that will help sellers massively, I believe.
Why have I worked hard over the last three years to achieve firstly power seller silver status so i could reduce my business running costs (fees), then had to do it all again when ebay moved the goal posts to achieve top rated seller status to reduce my fees.
Whats next super super seller status ?
Too be honest I don’t care now looking after your customers and giving good service counts for nothing, I am going to increase my postal charges and reduce the cost of my items just so ebay earn less from me in fees, there will be a explanation given to my customers why, and i am going to encourage more cash, cheque, and postal order payments to reduce my paypal charges, because as we all know paypal is owned by ebay so we pay twice anyway.
9 out of 10 buyers want to use Paypal and that is probably going to rise come April. Buyers are not going to thank you for requesting that you increase their payment costs when 1st class stamps rise to 80p (or whatever) in April.
When you look at listings that contain a lot of waffle and give visitors a whole list of instructions taking the form of “guidence” shall we say what do you think?
But it is your business…
(I simply show photographs, include a description, and advise customers when their purchase will be shipped. I ship worldwide so keep the words to a minimum and use simple English. There are several links to the ebay shop top middle and bottom, and a single link to terms and conditions if buyers wish to click through but 99% don’t. Nothing else and no waffle. ebay then do their bit to make my listing look untidy but that is another story!)
What a lot of ranting but scarcely any action planned. There should be a union of business sellers so that if ebay mess us about too much we can threaten to move en masse to ebid. This uncoordinated venting is getting us nowhere.
Who said anything about strikes? The point of a union is to avoid action by touting its threat. And if action were to be taken, as per the above I wouldn’t advocate strikes but simply moving. Because of the way ebid is structured, you could move to ebid for almost nothing AND retain your position on ebay. That way the move has time to gain traction. Failure would not be a problem since sellers would retain their positions on ebay (who would not wish to spitefully evict its core customers under any circumstances).
By the way, whatever ‘action’ was taken in the past can’t have been done in a very organised way, because I never even heard about it.
@22.2: A lot of people would have heard of ebid if half the merchandise on ebay uk suddenly appeared on it. I think it’s a credible threat.
There should be an independent forum specifically for ebay business sellers at the very least, to discuss issues like this.
This is really not the right time to be increasing our costs EBay!! We have quite a large increase in Royal Mail packets to contend with this year, I know we are all in the same boat so its going to lead to some quite hefty increases in Retail prices across the site to maintain our margins at a time when the UK is still pretty much in a recession. Whilst we never ever count our chickens by including our TRS discount when calculating our selling prices, it still means we will have an increase in our costs this year of about £2500 just from losing this 10% discount.
The footfall on ebid at the moment pales in comparison with ebay. It wouldn’t be a viable alternative for ebay sellers unless a movement en masse occurred (which is what I proposed). However, as with the situation with financial services, it appears that the great british public is generally too apathetic to do anything about it when they’re being ripped off. So I expect to see, and have seen, a bit of aimless moaning, and then life will continue as previously planned.
I am an ebay business seller, although I do have an account on ebid. I’ve bought a few things from there and never been scammed, but I have no doubt that, like all walks of life, it will have its scammers. As for the issues raised by Chris Dawson, I (and I suspect he also) have my doubts that anybody is doing 4-figure monthly profits on ebid at the moment.
Genuine competitors to ebay will not dribble into existence: they would require a significant movement of people and/or a significant investment of resources to get them quickly up to speed.