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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.