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EBAY MATH - WHEN A SIGNIFICANT FEE INCREASE IS CALLED A SIGNIFICANT FEE REDUCTION
 

ebaY raises fees by 4% to 55%
12 Feb 2008

ebaY said they are making, "three significant price reductions" effective 20 Feb 2008. ebaY is reducing listing fees, they are making galley free again, and they are changing the pricing on their featured plus option. It is almost needless for TAG to say that ebaY, as usual, is lying, as the new fee structure is a significant fee increase.

In addition ALL sellers will be required to offer PayPal as a payment option, or have a merchant account, if they have less than 100 feedback. Sellers who have " the worst rates of buyer dissatisfaction", will also have to offer PayPal or a merchant account. TAG has not yet found what a "worst rate" is. Also sellers who list in certain categories with higher rates of buyer complaints, will have to offer PayPal or a merchant account. TAG also has yet to find which categories are included in the requirement.

Auction - NOTE any item with the Buy It Now option must start at $1. or more
01-99 cents was 20 cents - now 15 cents
1.00 to 9.99 was 40 cents - now 35 cents
10-24.99 was 60 cents - now 55 cents
25-49.99 was 1.20 - now 1.00
50-199.99 was 2.40 - now 2.00
200-499.99 was 3.60 - now 3.00
500 or more was 4.80 - now 4.00

Fixed Price
No item can be listed for less than $1.00
1.00 to 9.99 was 40 cents - now 35 cents
10-24.99 was 60 cents - now 55 cents
25-49.99 was 1.20 - now 1.00
50-199.99 was 2.40 - now 2.00
200-499.99 was 3.60 - now 3.00
500 or more was 4.80 - now 4.00


Store Inventory
No item can be listed for less than $1.00
1.00 to 24.99 was 5 cents - now 3 cents
25-199.99 was 10 cents - now 5 cents
200 or more was 10 cents still 10 cents


Final Value Fees for Auction and Fixed Price
*01 - 25.00 was 5.25% - NOW 8.75%
*25 -1,000 was 5.25% of first $25. plus 3.25% or the remaining balance - NOW 8.75% of first $25. plus 3.50% or the remaining balance
*Over 1000.01 was 5.25% of first $25. ($1.31) plus 3.25% of $975.00 ($31.69) plus 1.5% of the remaining balance - NOW 8.75% of first $25. ($2.19) plus 3.50% of 975.00 ($34.13) plus 1.5% of the remaining balance

Final Value Fees for Store Listings
* $1. - $25. was 10% - NOW 12%
* $25.01 to $100. was 10% of first $25. ($2.50) plus 7% of the remaining balance - NOW 12% of first $25. plus 8% of the remaining balance
* $100.01 to $1000. was 10% of first $25. ($2.50) plus 7% of $75.($5.25)plus 5% of the remaining balance - NOW 12% of first $25. ($3.) plus 8% of $75. ($6.) plus 4% of the remaining balance
* Over 1000.01 was 10% of first $25. ($2.50) plus 7% of $75. ($5.25)plus 5% of 900.00 ($45.00) plus 3% of the remaining balance -
NOW 12% of first $25. ($3.) plus 8% of the next $75.00 ($6.) plus 4% of 900.00 ($36.) plus 2% of the remaining balance

Reserve Fee
0.01 cent to $49.99 was $1. NOW $2.00
50. to 199.99 unchanged at $2.00
$200 and up unchanged at 1% of reserve price with max of $50
Business and Industrial Capital cats - unchanged at $5.00
The BIG difference with reserve fees is that they are now no longer refundable, so you pay them if the item sells or not.

There are some fee reductions on ebaY frill features ALL of which are a net waste of money and immaterial to the majority of sellers.

Lets look at some examples of how these fees add up:

Auction or Fixed Price
An item starts at $24.99 and sells for $85.00
Listing fee was 60 cents and final value fee was $3.26 for a total fee of $3.86
Listing fee now is 55 cents and final value fee is $4.29 for a total fee of $4.84
The cost to sell an item under the new fee schedule is now 98 cents MORE than under the old schedule, a little over a 25% fee increase. No matter how you add and subtract something that cost more than it did before for the same service, is a fee INCREASE not a "significant price reduction". Even if we add in the value of the gallery feature - something NOT used by all sellers, the net result is STILL a fee INCREASE.

An item starts at 99 cents and sells for $25.00
Listing fee was 20 cents and final value fee was $1.31 for a total fee of $1.51
Listing fee now is 15 cents and final value fee is $2.19 for a total fee of $2.34 for a price increase of 55%

Store Item
Item lists for and sells at $180.
Listing fee was 10 cents and final value fee was $11.75 for a total of $11.85
Listing fee is now 5 cents and final value fee is $12.20 for a total of $12.25
Last time we looked $12.25 was 40 cents more than $11.85 for an approx 4% price increase. For items selling under $100 the fee increase is closer to 16% higher.

One thing that ebaY is doing that has been long overdue is giving large sellers a discount on their final value fees, if they also maintain a reasonable standard of detailed seller ratings (DSRs). It has always been a normal business practice for those who use the product in the largest quantities to get some discount for their bulk volume, and it is about time ebaY started to do the same. This applies to US or Canadian PowerSellers on ebaY.com, ebaY Motors and ebaY.ca sales.

08 Fee Update