eBay announce UK fee changes

29/01/2008 at 15:03

Here you go, people – the UK details we’ve been waiting for.

Business registration required for PowerSellers

Firstly, the simple bit: as we expected, PowerSellers will be required to upgrade their accounts to business registration. It is a requirement under EU and UK law that anyone who is trading as a business must clearly indicate this to consumers. Expect to see more work from eBay over the coming months to ensure that buyers’ legal rights are respected.

Fee changes

The model here is to “reduce risk” for sellers by switching more of the fee to FVFs, so that fees are more in line with sales success. The changes will take effect from 20th February.

The new insertion fees range from 10p (down from 15p) for items starting at 99p or less, to £1.30 (down from £2.00) for items starting at £100 or more. The average is a 33% reduction in insertion fees.

Final value fees increase thusly:

  • Up to £29.99: 7.5% (increased from 5.25%)
  • £30 – £599.99: 4.5% (increased from 3.25%)
  • £600+ : 1.9% (increased from 1.75%)

Fees for Shop Inventory Format listings are not changing. Gallery fees are going to be free in the US but are apparently not changing in the UK.

Media, Technology and Vehicles categories have their own fee structures.

FVF reductions for good sellers

Here’s where it gets complicated :-D

High-volume business-registered sellers with a score of 4.6 or more on all DSRs over the last 30 days, will be entitled to a discount of 20% off their FVFs. Members of the PowerSeller program will receive higher rates of discount depending on PS level:

  • Bronze: 20% (sorry, Bronzies: no extra for you :-( )
  • Silver: 25%
  • Gold: 30%
  • Platinum: 35%
  • Titanium: 40%

In other words, Powerseller level now really is worth something. This is a change unique (as far as I know!) to the UK, and is not happening in the US.

And the question we all really care about: is it going to save us any money? The answer, apparently, is yes. eBay’s figures for an ordinary seller show savings across the board ranging from 21% to 4% on BIN items; they’re slightly less hot (6% – 1%) on auctions. And with the additional PowerSeller discounts, the figures start to be even better.

Thoughts

Me and my business are happy. I’m glad the insertion fees have stayed, because they *are* an incentive not to list rubbish, and should help to disincentivise flooding of categories by sellers with huge amounts of inventory to shift.

More than that, eBay have linked my success with theirs, not only with the tilt in fees towards final values, but with discounting based on PS level too. Finally, the PS scheme is no longer a marketing exercise: it’s taken the first crucial step towards upholding buyers’ legal rights, and at the same time, sellers have been given a real incentive to stay within the program, clean up their acts, and get a financial reward for doing so. 4.6 across the board is a reasonably high DSR requirement to have (compared e.g. with the 3.9 figure to be disadvantaged in search) so this really should promote excellence amongst sellers.

No doubt more details, thoughts and questions will emerge in the days to come, so please leave us a comment with your opinions. I’d be especially interested to know how the changes make you view your future with eBay: are you more or less likely to keep selling on the site than you were yesterday?