The fee schedules at eBay
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
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
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.
What do you think of eBay's new fee schedule? Share your thoughts in the comment box below, and add eBay to your watchlist for further Foolish coverage and tracking.
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Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 178 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.