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Internet eBay Hikes Seller Fees Again
Brandon Hill (Blog) - January 4, 2007 12:47 AM
Print E-mail del.icio.us 34 comment(s) - last by SilverTrine.. on Jan 6 at 2:18 PM
eBay sellers cry out for a Google Checkout payment option

The cost of doing business on eBay just got a bit more expensive. Bill Cobb sent a message to eBay sellers earlier today which noted that increases in listing and final value fees will take place on January 30, 2007.

Insertion fees for regular auctions and fixed-priced listings starting between $1.00-$9.99 will increase from $0.35 to $0.40.

There are currently three "tranches" in play for Final Value Fees on eBay. In its current form, the first tranche charges 5.25% of the closing value for auctions ending between $0.01 and $25.00. For the second tranche, the charge is 5.25% of the initial $25.00 (maximum of $1.31) plus 3% of remaining closing value balance ($25.01 to $1,000). The third tranche charges 5.25% for the initial $25.00 (maximum $1.31) plus 3% of the initial $25.01 to $1,000 (maximum $29.25) plus 1.5% of the remaining closing value balance ($1000.01 to whatever your item sells for).

The latest fee increase raises the cut that eBay takes out of the remaining closing value balance for the second tranche from 3% to 3.25%. AuctionBytes details how this fee change would affect sellers:

Let's use an example of an item with a starting price of $5 that ends with a winning bid of $50. Under the existing fee structure, sellers would pay a total of $2.41 in eBay listing and commission fees. Under the new fee structure, sellers would pay $2.52, an increase of 4.56 percent. Take the same item, but assume it sells for $1500, and sellers would pay 6.48 percent higher fees ($40.90 instead of $38.41).

Likewise, eBay Motors is also seeing fee hikes. The Transaction Service Fee (TSF) for motorcycles and powersports has increased from $30 to $40 while the TSF for cars, trucks and trailers has increased from $40 to $50. The Motors Reserve Fee (MRF) has also increased from a flat $5 charge to 0.1% of the reserve price ($5 minimum, $10 maximum).

"Let me say that, while we believe these changes are modest, we consider any changes that may impact our sellers with great care. These adjustments are the result of careful analysis and we believe they're the right thing to do to keep the marketplace strong for our eBay.com and eBay Motors sellers," said Bill Cobb.

Some eBay PowerSellers aren't too happy about the new fee hikes and have expressed their disdain on the PowerSellers discussion forum. Many have expressed the wish to have a Google Checkout payment option available to buyers to save on PayPal transaction fees. Currently, eBay does not allow the use of Google Checkout and in the past has said that the payment service isn't mature enough for consideration.

Google Checkout gained a lot of attention and generated a lot of business for online retailers during the holiday season. Google provided $10 off $30 and $20 off $50 coupons that were available to use at such online retailers as Buy.com and RitzCamera. Not surprisingly, PayPal parroted Google's generosity by providing a $20 off $50 promotion of its own.

PayPal will face even stiffer competition this year when Google Checkout goes fee-less. PayPal currently charges merchants 30 cents plus 2.9% of the total value of a transaction.

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google checkout is going to crush paypal
By LumbergTech on 1/4/2007 1:37:21 AM , Rating: 5
google checkout is going to destroy paypal...the service isnt mature? i used it 4 times this holiday season and it worked perfectly, in fact it was more convenient than any shopping experience ive ever had online




By feelingshorter on 1/4/2007 1:59:17 AM , Rating: 2
I used Google checkout quite a bit also. If only Google would create their own auction site (which they said they dont plan on doing), then they can crush Paypal much harder. I just recently sold 3 items on ebay, a Canon Rebel XTi, Ipod, and another mp3 player. Cannot help it but there is no other place better to sell than eBay. All other auction sites wont get as much views and buyers. Google on the other hand have the clout to create an auction site, that can surpass yahoo/overstock.


By Brandon Hill (blog) on 1/4/2007 2:11:38 AM , Rating: 1
I don't think that Google needs to create its own auction site. eBay is already pretty darn good at that.

What we need is for eBay to accept Google Checkout as a form of payment and we'd have the best of both worlds.


RE: google checkout is going to crush paypal
By dgatewood on 1/4/2007 3:16:54 AM , Rating: 3
Why would e-bay allow a free service on its site when it doesn't have to? E-bay owns Paypal. It wouldn't give up that kind of revenue until there is substantially more pressure or competition that would force them to do so.

As it stands now, e-bay can increase their rates on any service they provide and the users can either pay up or go to an auction site where they won't get nearly as many views/bids.


RE: google checkout is going to crush paypal
By jmunjr on 1/4/2007 3:31:30 AM , Rating: 5
They allowed paypal when they didn't own it. They allow checks. they allow cash. they allow money orders. How is google checkout any different? Fraud? What a joke. Ebay doesn't care if we are protected or not. Any concern they have about fraud is how many customers they lose because of it, not if we get hurt. So when they don't allow other payment options it is not because of fraud risk, it is because they don't want to lose customers because ebay runs a business where customers can get hosed.


By ScythedBlade on 1/4/2007 5:56:26 AM , Rating: 3
That's quite true ... I wished that google would open its own auction site.


RE: google checkout is going to crush paypal
By AlexWade on 1/4/2007 8:33:02 AM , Rating: 3
"FeeBay" allows checks and money orders because they have to. But as far as credit card payments. PayPal is a gold mine. The fees they charge for credit processing are outrageous.

PayPal doesn't protect from fraud. I bought something and it arrived damaged. This was a power-seller whose return policy stated they would take returns if it arrived damaged. Did they? No. In fact, they refused arbitration. I was stuck. Now, I avoid "FeeBay".

I do sell stuff rarely. How much more money do they need to make? "FeeBay" is getting too greedy, and it will cost them in the long run.

You can beat "FeeBay's" anti-Google thing by not allowing PayPal on your auction. Then, use Google Checkout to send an invoice by e-mail to the winner.


RE: google checkout is going to crush paypal
By DOSGuy on 1/4/2007 9:08:53 AM , Rating: 4
eBay definitely doesn't protect its customers. I bought a hockey card for $56 once, which seemed to be the going rate for that player, and it was so discolored that it was absolutely worthless. I complained to eBay that it was "significantly not as advertised", and the buyer, who had been 100% for years, suddenly received a flood of negative feedback, set his feedback to private, and closed his account. When he failed to respond to my complaint, eBay offered me a full refund, minus a $40 fee, if I could have an expert appraise the card. So now, if I can get an expert to appraise it for free, I can get $16 back. Professional certification costs more like $29 per card, so there was no way that I could get any money back. I learned my lesson and have never bought anything on eBay again. They have no interest in protecting their buyers.

Now I'm a seller, and I was making money at it, but eBay keeps raising their fees, and then I have to pay them again when I accept PayPal. Screw PayPal. I opened a Google Checkout account. My buyers are getting invoices from Google now, whether eBay likes it or not.


By Spartan Niner on 1/4/2007 2:46:24 PM , Rating: 2
A similar experience drove me away from eBay as well. Now I use FS/FT as well as an Amazon seller's account to sell off computer parts and textbooks. So far I haven't been burned by either, because the feedback system (heatware/Amazon feedback) is much better than eBay's system and better policed. Google may as well crush PayPal, because PP's high fees are making me think the USPS MO may be back in style... more competition is better!


By animedude on 1/4/2007 3:19:38 PM , Rating: 2
Did you know that eBay increased their store listing fee and fvf back in August last year? Now they are doing another an increase on normal listing. For me, as an eBay Powerseller, I wish Google would teach eBay a lesson. eBay gotten too greedy. Before this fee increase, they are already making 13.5% on average from every sales, and now they are getting 18%.


By carl0ski on 1/4/2007 4:59:30 PM , Rating: 2
I think its more logical that Google and Amazon create a partnership

As far as i'm concerned if Google truly had evil tendencies they would sue Ebay for
defamation (claiming Google Checkout is fraudulent without grounds)
and
abuse of market power (Monopolistic behaviours) by blocking competitors of PayPal.


Imagine if Microsoft Patched windows so that all porducts that compete with their products were completely blocked from installing.
MS Office - Open/Star Office
WMP - Real - Quicktime - iTunes


By davegraham (blog) on 1/4/2007 9:47:12 AM , Rating: 1
as a merchant, Google Payments isn't nearly as flexible as Paypal. Sorry...I run my merchant accounts through them etc. and for ease of use, it's hard to top. Google Payments is good, mind you, but it's still got a long way to go before I'll ever consider it as a viable alternative to Paypal.


By Brandon Hill (blog) on 1/4/2007 9:53:33 AM , Rating: 2
Look at the model Buy.com used during the holiday season with Google Checkout. If they can handle the increased traffic/transactions (due to the $20 off $50 coupons), I think that there is hope for us all.

I would REALLY like to see what Buy.com's year to year increases were for the October - December '06 period.


By LoneWolf15 on 1/4/2007 8:56:51 AM , Rating: 3
PayPal got to be too much for me on Ebay when Ebay required that I accept all forms of PayPal (credit cards included). I didn't know of the change, until someone went vigilante on me and reported several auctions which got yanked. Whereupon I was told that I couldn't say "I will not take credit card PayPal" in an auction (I never used the PayPal symbols, not wanting to mislead people about credit cards) and that if someone did pay via CC, I'd be required to upgrade my account, and pay transaction fees on ALL transactions, regardless of whether they're made with credit card or not, and regardless of whether they're Ebay transactions or not.

In essence, Ebay is hoping to force everyone to upgrade their PayPal accounts to fee-based ones, so they can triple-dip people for auctions (listing fee, final value fee, PayPal fee). I'm not willing to stand for that, so I've found ways to cut costs whenever I can. Even if it means a few less dollars on an Ebay auction, that's probably less than what Ebay charges me in the end, and I have a 100% rep so people still buy from me.

I can't wait until another alternative to Ebay is available. Ebay isn't likely to allow Google Checkout anytime soon, and while their site setup is pretty good, their policies continue to become more restrictive and draconian. Don't bother complaining on Ebay's forums either; there are plenty of people who are so "love-it-or-leave-it" that they'll take offense, and start watching your transaction histories for mistakes to report you on(it's sad and paranoid, but true). For those that think that we don't need an auction alternative, I'd say that if Google offered one, people would flock to it. Many sellers are tired of the 900-lb gorilla that is Ebay/PayPal. And being able to use an alternative to PayPal such as Google checkout would make it that much sweeter.




By xKelemvor on 1/4/2007 9:35:10 AM , Rating: 3
That's why I have 2 Paypal accounts. I tell people that if they pay through their Bank Account, to send to one address and if they have to pay with a CC, then to send to the other. I also tell them that if they pay with a CC it will incur a 1 week shipping delay to try to get them to use their Bank Account.


By Polynikes on 1/4/2007 1:37:28 PM , Rating: 2
That's an interesting approach. Do you get less buys than you used to now because of it?


Paypal rates....
By davegraham (blog) on 1/4/2007 9:45:46 AM , Rating: 1
quote:
PayPal currently charges merchants 30 cents plus 2.9% of the total value of a transaction.


This isn't accurate at all. If you're even remotely savvy, Paypal will scale your fees downward. This is based on volume of sales per month. I currently enjoy a 1.9% rate (+.30 per sale) from Paypal for direct paypal payments and a 2.1% + .30 for any directly billed credit card payments using WPP or VT.

*shrug*

Their average rates are among the BEST in the industry with no swing on Discover/Amex (usually 3.x% or greater charged to merchant) and reasonable rates. Additionally, their merchant support system is incredible, with direct access phone #'s, technical support, etc. Why people bitch about this is beyond me. For what it's worth, Google Payments, while a decent solution, still suffers from disbursement caps, etc. that I just cannot flex with right now. give them time, I'm sure they'll work out ok.

dave




RE: Paypal rates....
By animedude on 1/4/2007 3:24:20 PM , Rating: 2
If PayPal is so great, then it shouldn't charge any fee for receiving paypal fund and only charge for credit card. Have you try calling them? Their phone service sucks big time and same goes eBay which doesn't even have a phone #.


RE: Paypal rates....
By TheDoc9 on 1/4/2007 4:04:32 PM , Rating: 2
Your right, they are the amoung the best in the industry. Since the industry is composed of well, paypal - 3% is the best you can get. No we're not counting other shady no name payment processors and google will soon be free if they even have rates now.

My friend, saying they are the best in the industry makes you sound like you work for them. It's a coporate propaganda line.

There are also ways around these rates for coporations, and differen't rate caps and amounts per charge and volume of charges that none of us have access to. What it all comes down to is that these companies are charging people as much as they can.

'Good' modern businesses charge the max a customer is willing to pay to maximize profit for WHATEVER reason they choose so that they can justify it. They do not charge the least just to be nice to the customer nor give them some kind of break. This is considered 'Bad' business in today's world.


RE: Paypal rates....
By animedude on 1/5/2007 10:08:21 AM , Rating: 2
The problem is charging non credit card payment fees for premium and business account. For just altering a few record in their system, they are charging us 2%-3%! That guy on the top probably work for eBay or PayPal.


Why?
By Kuroyama on 1/4/2007 1:39:21 AM , Rating: 4
How can they justify these fee increases? This is not about inflation, because when there's inflation then the cost of the items for sale increases which already increases the EBay's commission by the appropriate amount.




Where's the competition?
By Kuroyama on 1/4/2007 1:40:19 AM , Rating: 2
It is clear that EBay knows they have a virtual monopoly and hence are willing to milk the customers for money as long as it doesn't seem to be causing any mass defection. Same reason they reject Google Checkout, because they know sellers have no better markets to sell at. It is unfortunate that none of the competing attempts at auction sites in the US seem to have gained much traction. Once Google Checkout goes fee free then perhaps the savings for the sellers will warrant shifting some of their sales to another site, even though fewer customers may translate into somewhat lower sale prices at least in the short term.




RE: Where's the competition?
By Pheebay on 1/4/2007 4:31:01 AM , Rating: 2
You can find a list of alternatives to Ebay here:

http://pheebay.com/forums/viewforum.php?f=10

You can also vote for your favourite.


By xKelemvor on 1/4/2007 8:37:01 AM , Rating: 2
I know it's not built into eBay but couldn't you just direct people to a Google Checkout link after the auction is completed. Could just invoice the users and say if you are paying through Paypal and NOT using a credit card, then go through the normal process, but if paying with a CC, click "here" and direct them to a Google Checkout page for them?




By therealnickdanger on 1/4/2007 8:47:56 AM , Rating: 2
I can't say with authority since I haven't done it, but I've *heard* that your eBay auction can be cancelled and your account frozen if you're caught offering Google Checkout... due to "security reasons". Take this with a grain of salt, since I haven't used eBay in so long, I wouldn't even want to try to confirm it.


Dont give in
By crystal clear on 1/4/2007 7:09:46 AM , Rating: 1
"eBay sellers cry out for a Google Checkout payment option"

Simple-instead of crying out loud-JUST DUMP eBay en mass for
a few weeks, & eBay will come crying to you.

Hey buyer/seller/user become a bit shrewd & do some arm twisting.
Attack is the best form of self defence-in this case.

eBay needs you more than you do-find a alternative site.





RE: Dont give in
By jimmys on 1/4/2007 3:51:05 PM , Rating: 2
All of you sellers that complain about Ebay/Paypal fees, please just buy some Ebay shares and you will realize gains that far exceed any loss from a small fee increase. It may be in your best interest to join the big, ugly monster to take some of the pain away....that's what I decided to do years ago and it has paid off handsomely.


eBay/PayPal are full of it
By Spartan Niner on 1/4/2007 2:41:10 PM , Rating: 3
eBay is just full of it. When in essence they are already triple-dipping by taking listing fees, sale fees, AND PayPal fees, they have the nerve to insult Google's Checkout program. I closed my eBay account over a month ago because eBay's heyday is over - high fees, rampant fraud, and the could-care-less attitude of eBay/PayPal drove me away. If Google is going to bring out an auctions system, I say do it. If it's anything like Google Checkout it'll be slick, easy-to-use, and secure. Not to mention cheaper.




By sonicDivx on 1/4/2007 7:44:08 AM , Rating: 2
Hmm, gotta wonder is this in line with Wall Street's revenue forecast. Yup its nice to be the major game in town, LOL.





Google
By PlasmaBomb on 1/4/2007 8:11:32 AM , Rating: 2
Surely all google has to do is get some employees to make a mock up of Gbay and accidentally let it leak out to Ebay/the net in general?

Then just tell ebay they plan to go ahead unless google checkout gets recognised by ebay.




One other note...
By LoneWolf15 on 1/4/2007 9:03:24 AM , Rating: 2
What with Yahoo! having their issues, I'm surprised they don't decide to work harder on making Yahoo! auctions more public and prominent. Currently they lag far behind Ebay, but part of that is due to their presence being relatively unknown.

Of course, partnering with Google Checkout is probably something Yahoo! wouldn't be willing to do.




google come say us
By rika13 on 1/4/2007 2:15:34 PM , Rating: 2
google can file a lawsuit because ebay only allowing their own pay service is blatantly an abuse of monopoly power (monopolies arent defined by being the only, but by the ability to use monopoly power, hence m$ is a monopoly) and as such a violation of anti-trust law




The greedy shall perish
By androticus on 1/5/2007 2:16:03 AM , Rating: 2
If anything, eBay should be *lowering* fees as they gain more customers and develop ever larger economies of scale. That would generate huge goodwill, keep potential competitors increasingly at bay, and insure eBay's long term survival.

Although I like the convenience of buying and selling on eBay, I have to say I resent a lot of their policies--there is an overall theme of doing the minimum they think necessary to make it seem like they give a damn about you, and lots of effort on padding their own pockets even if it sucks for you. Simple example: people get burned all the time selling big ticket items when newbies bid then don't pay. This has happened to me most times I sold something expensive (computer, game console, etc.) I bet it happens all the time. But there is no mechanism to prevent this (no *practical* mechanism.) You can demand new bidders contact you, but many don't even if you say, and you can't really cancel bids in the last few minutes of an auction (particularly last-second "snipes"), even assuming you are going to be there. They offer a "no negative bidders" option, but that is totally useless and merely exists to make it look like they care -- no one keeps a negative rated account on eBay, they just open a new one. The fees that PayPal charges are ridiculous, like having to "upgrade" to the premium service to accept one credit card payment or such, then they charge you a sizable commission on EVERY transaction thereafter! Same pattern: a fake appearance of offering a convenient, customer-friendly option or solution, but in practice, ends up being not practical.

Despite eBay's convenience compared to a 4x6" card on your local supermarket bboard, I have to say that a company that engenders widespread resentment against it cannot last over the long term. And look, for instance, how they failed so abysmally in China -- they are probably so devoid of original, *pro-customer* ideas at this point, that they didn't even think they actually had to develop a product for China -- "let them eat eBay West!"

Yeah, well, Meg, you remember what happened to the last chick that had that attitude, right?

It is depressing sometimes the way that billion$ CEOs are sometimes confused with competent, innovative businessmen.
(Like that other poster boy of executive mediocrity, Steve Ballmer of Microsoft.)




By SilverTrine on 1/6/2007 2:18:13 PM , Rating: 2
If they were smart they would create a very customer orientated eBay that made a good profit but wasnt unreasonable.
Instead they maul their sellers who are the heart of eBay and create millions of people who have ill will towards them.
In doing so they leave the door wide open for a more reasonable company to swoop in and destroy their business. Most eBay sellers will joyously leave eBay if given the chance, not only that but they'll make sure everyone knows that leaving eBay is the thing to do.
Its just a matter of time till a company makes a run at eBay. Obviously Google wouldnt announce they were planning to take on eBay till the product was out the door.
I think Google checkout is the beginning step in them taking on eBay however.




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