The fee schedules at eBay (Nasdaq: EBAY) are shuffling around again.
The company's namesake marketplace is introducing new rates that will give infrequent sellers more chances to move their wares, but it all comes at a price that has the eBay community up in arms.
In a dramatic move, eBay will begin charging its final value fees on successful listings based on the complete transaction cost. Sellers who charge additional fees for shipping, gift wrapping, and other add-ons will now have to pay eBay a cut of everything that a buyer will be shelling out.
Yesterday's announcement claims that the shift will "reward low-cost shipping for all sellers," but I can see it going the other way, too. Since sellers know that they won't be getting back the full amount of their fulfillment costs after eBay's 9% cut (in most cases), won't they just jack up shipping charges?
The timing's lousy, too. UPS (NYSE: UPS) and FedEx (NYSE: FDX) hiked their fuel surcharges last week in response to percolating oil prices.
Some will argue that this is a good way to smoke out new sellers. eBay will be offering sellers 50 listings a month without an insertion fee starting next month. This is a welcome shift from the 100 free monthly listing it's currently offering, but only on items with initial prices of $0.99 or less and no reserve requirements. These casual sellers being targeted are the same ones who may not even be aware of the difference between scraping 9% from the winning bid and 9% on the total transaction cost.
Regular sellers, on the other hand, appear to be miffed. Most of the posters on eBay's official forum aren't impressed. Many are threatening to bolt, but eBay's been hearing that for years. eBay's decision to also retire the 5% fee discount granted to PowerSellers is adding insult to injury, though the online marketplace will continue to honor the 20% discount it offers to its top-rated sellers.
It's easy to see why eBay is getting antsy. eBay's marketplace transaction revenue climbed just 3% during the holiday quarter when pitted against the previous year's fourth quarter. The year-over-year spurt was also 3% during the third quarter.
This isn't Latin America's MercadoLibre (Nasdaq: MELI) with its scintillating growth rate. Outside of PayPal, eBay's a bacon-topped chocolate funnel cake in search of a defibrillator.
Raising overall rates for most sellers seems like a lousy move if it's ultimate intention is to make eBay.com the hotbed of cottage industries and spring cleaning monetization that it used to be.
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