EBay announced yesterday that they are cutting the listing fees and making the shopping experience simpler and safer! Awesome huh?

EBay unveiled changes to its online marketplace Tuesday that the company characterizes as sweeping and historic and that are aimed at boosting sales by making the shopping experience simpler and safer.

The changes, which include lowering some fees and raising merchant standards, were announced at the company’s eCommerce Forum by John Donahoe, who will succeed Meg Whitman as president and CEO in March.

The changes, which will be implemented at different points in the coming weeks and months, come at a time when eBay is struggling to boost growth of transaction volume and revenue amidst increased competition from the likes of Amazon.com, which in recent years has attracted many merchants away from eBay.

Too bad their “fee cuts” are anything but that. What? You don’t believe me?

For the sake of argument, let’s pretend we’re listing and selling an item for $25.00. The fee changes are as follows:

The current listing fee is $1.20. The new listing fee will be $1.00.
The current gallery fee is $0.35. The new gallery fee will be $0.00.
The current final value fee is 5.25%. The new final value fee will be 8.75%.

Sounds nice and puffy doesn’t it? Well, let’s take a closer look.

Before the cuts:

Sale Total: $25.00

Listing fee: $1.20
Gallery fee: $0.35
Final Value fee: $1.31

Net Sale Amount: $22.14 (aka your profit)

After the cuts:

Sale Total: $25.00

Listing fee: $1.00
Gallery fee: $0.00
Final Value fee: $2.19

Net Sale Amount: $21.81 (aka your profit)

$22.14 vs. $21.81. Is sure doesn’t sound like much of a cut in fees to me. If it was up to me, I would much rather make $22.14 from my item than $21.81. Imagine if you are a high volume seller and you have to pay 33 cents more for every item you sell. If you sell 100 items you’ve made $33 less than you used too.

All hail the fee cuts!

1. I crunched some more numbers on my blog -> http://www.russellheimlich.com/blog/ebay-updates-fees-with-mixed-results/

   Surprisingly if your item sells for less than a dollar than you will actually benefit. I guess that is right where eBay wants you so you go over.

   Comment by Russell Heimlich on Jan 30th, 2008 @ 00:28

   
   

2. [...] at Slobokan’s Site O’ Schtuff. Technorati Tags: EBay, fees, cuts, liars Posted in Da ‘Net | Sphere It [...]

   Pingback by The Alligator Pit » Blog Archive » EBay Accounces Lower Fees, It’s Not True on Jan 30th, 2008 @ 06:38

   
   

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