Fri 29 Jul 2011
EBAY TO SLUG SELLERS WITH HIGHER FEES
eBay Australia has revealed plans to more than double its fees on some auction listings, effectively penalising non-professional sellers.
The days of eBay as largely an online garage sale are finished as the company pushes sellers away from second-hand auctions towards listing new items in the fixed price format and on eBay Stores.
But as consumers and mum and dad sellers typically run one-off auctions as opposed to opening their own stores or setting a fixed price, they appear to be left worse off by the upcoming changes.
From September 22, eBay Australia will scrap insertion fees for the first 30 items listed for auction in a month. Insertion fees currently range from $0.30 to $3.50 for most items (excluding vehicles).
However, final value fees will increase from 5.25 per cent to 7.9 per cent, capped at $49.95 for each of the first 30 listings per month. This is now the same as the final value fee paid by professional sellers with eBay Stores.
Today, on a $600 item with a starting price of $400, users pay a $3.50 insertion fee plus an $18.40 final value fee (5.25 per cent of the first $75 then 2.75 per cent of the next $525). This gives a total of nearly $22 in fees.
Under the changes, on a $600 item, there will be no insertion fee but a 7.9 per cent final value fee of $47.40 will be levied.
For lower value listings such as a $20 item with a starting price of $0.99, fees will rise from $1.35 to $1.58.
“In recognition of the changing Australian retail landscape, the fee changes are aimed at encouraging professional and business sellers to list more Buy It Now items in Stores,” eBay said in announcing the changes.
It said online shoppers were predominantly interested in fixed price sales and that it expected future growth in e-commerce would primarily come from fixed price formats such as Buy It Now, which is now the most common format on the site.
eBay said the new fees would be run on a trial basis with a view to making them permanent if they “meet sellers’ needs”.
Angus Kidman, technology writer and blogger at Lifehacker.com.au, said it may be time for sellers to protest.
“This feels a little like unfair exploitation of power to me,” he said.
eBay Australia spokesman Daniel Feiler said the changes were not a revenue raising exercise and would in fact be a zero sum game for eBay considering that the insertion fees had been scrapped.
He said that while the fee increases were pronounced for high value auctions, people who sell stuff from around their homes are generally selling items that are of much lower value.
“We’ve got an issue on eBay and that is simply that most people associate us with auctions and second hand when actually the majority of our business in 2011 is fixed price buy-it-now items from retail or business sellers,” Feiler said.
“On the consumer side the big issue that the consumer has when they sell on eBay, the biggest barrier to them listing, are the insertion fees, so we’re getting rid of the insertion fees.
“But to afford us to do that we have to increase the final value fees. We net out neutral on this one.”
A spokeswoman for consumer group Choice said she did not know whether the changes would be beneficial for consumers on balance because it depended on whether the money they saved on insertion fees was more or less than the increase in the final value fee.
The Australian branch of the Professional eBay Sellers Alliance said “changes like these can be difficult to digest” but, from the Alliance’s perspective, eBay changes were generally positive.
PeSA spokesman Shaun O’Brien said eBay “tend to skew their changes to guide sellers to list in formats that buyers want, in this case heavily biased to encourage fixed price, which our sales data agrees with eBay’s in suggesting it’s the most popular format”.
Sydneysider Franco Lagudi, founder of a new eBay competitor The SOC Exchange, said the price changes showed eBay had forgotten about the individual and novice sellers that were the heart or engine room of the site.
He criticised the various fees charged by eBay including insertion fees, final value fees, listing upgrade fees, picture service fees, seller tool fees, optional feature fees and reserve price fees. The company also double dips on fees with extra charges for use of its PayPal service.
Lagudi’s business model is to charge a flat rate membership fee of $10 a year with no added fees.
“eBay’s move to professional sellers appears to be a move to exploit its dominant position and profits in the space and I urge people to fight back,” he said.
There are a number of other eBay competitors in Australia, including Gumtree, Quicksales and Craigslist, but eBay is by far the dominant player.