eBay Pricing Changes Are Bad for Sellers Like Me

As someone who sells items on eBay periodically, I found it surprising that eBay has announced a new fee structure that gives sellers like me less of an incentive to sell items through their site.

The new fee schedule (basic fees and feature fees) will take effect on Feb 20, 2008 that reduces insertion fees, increases final value fees and does not refund reserve fees. According to an announcement from Bill Cobb, President of eBay North America, their goal in making these changes was to "improve the overall experience for our customers."

However, the new fee structure will have the opposite effect on me. Here is a comparison of fees before and after the change for a typical auction that I would run on their site with a starting price of $0.99, a reserve price of $24.99, and a final value price of $75.00.

Fee before the change: $3.89 ($0.60 insertion fee, plus $0.35 gallery picture fee, plus $2.94 final value fee, plus $0.00 reserve fee [$1.00 reserve fee refunded if item sells])

Fee after the change: $5.49 ($0.55 insertion fee, plus $0.00 gallery picture fee, plus $3.94 final value fee, plus $1.00 reserve fee [reserve fee not refunded if item sells])

There would be a $1.60 increase in cost for a typical item that I would sell on eBay. If the item doesn't sell, my fee would be $1.95 before the change vs. $1.55 after the change, which is a $0.40 decrease in cost compared with the old fee structure.

But, my goal is to sell the item, not to have it listed and then expire unsold meanwhile paying eBay just for the privilege. Because my items sell virtually every time, I don't feel that the risk of having an unsold item needs to be mitigated. The benefit of a $0.40 savings for having an unsold item does not offset a $1.60 increase in cost to sell the item.

Needless to say, this new fee structure doesn't quite satisfy their goal of improving my overall experience and encouraging me to list more items on eBay.