Wednesday, January 30, 2008

eBay's new Final Value Fees (FVF) and Insertion Fees

An open letter to eBay:

Hello eBay,

Today I received an e-mail from you with the subject - "Important seller pricing changes". In it, you write "You asked, we listened. We're reducing Insertion Fees and adjusting Final Value Fees to lower your up-front cost to sell on eBay." Wow, I thought; that's so nice. eBay is making so much money, they finally realized that they're charging too much commission and fees, and decided to lower it so that their users will be happier. So I clicked on the link to learn more, and noticed that when you say that you are "adjusting" the Final Value Fees, it actually means that you are "increasing" them. But of course you can't write that in the e-mail, it would be bad marketing.

I decided to open an Excel spreadsheet and see how exactly this would affect your sellers. Imagine my surprise when I realized that in every situation (where an item sells for above $1.30), whether it be an auction style listing or a Buy It Now, in the end, you - eBay - end up with more of our money. Let's see how this works:

Will ya look at that! eBay wins every time. But that's with Buy It Now auctions. Let's take a look at what happens with regular auctions:

Wow eBay, you're making even more money when I use the auction format! So again, let me ask you... When you say "You asked, we listened", what exactly did we ask - for you to take more of our money? I don't recall asking for that. I'm pretty sure if I ask the other thousands of sellers on eBay they would also tell me that they never asked for such a thing.

I would like to finish off by saying that I still like eBay, and I will continue to come to eBay to buy and sell. But if you start seeing serious eBay sellers moving to Amazon, don't be surprised. And next time you want to raise your rates, be honest; don't make us think we're gaining when we're really losing.

Thank you. Have a wonderful day.

Digg this story


Anonymous said...

2 things you missed.

1) $0.35 saved for each listing since gallery is free. Just about everyone uses gallery.

2) You are assuming that everything sells. What if you only sell half or a quarter of the items you list? That is when you start saving.

As a huge ebay seller, my average bill will be going down at least 12%.

The Geek said...

1) This is true, however, if your items sell for more than $11.50, you lose because of the increase in the FVF.

2) I agree with you that if you only sell a portion of your items then you end up gaining, however many powersellers sell upwards of 90% of their inventory, and in this case they are losing big time.

My biggest issue with eBay is that in the e-mail they made it seem like they were listening to the fact that we wanted lower fees and they gave it to us, but in essence they are hiding the fact they they're gonna be making more money.

Anonymous said...

Don't worry follow ebay sellers. A new way is coming to internet town. I have develop a new ebay that will change the world. So, in 2008 brace yourself and enjoy. Lower listing fee, final fee, NO charge backs. So, ebay users why bid when you can ...... Well, thats the thing you have to wait until the website is finish.

Wack-job said...

As far as my mined tells me, that if for just 1 whole day (24hours) almost no-1 will list any thing, Ebay will go bunkers. The point is that if some site like, and such will be willing to pass out a note to the public, then we can get alot of people not to list. I'm a huge Ebay seller, from all that i sell in 1-Day Ebay gets about $160, now thats alot for them.