How will the fee changes affect your business?
I’ve been talking to a number of sellers today. Some are pretty pleased with the eBay fee changes, some sanguine, and others who are facing steep rises are upset to say the least.
One seller I spoke to, Alistair of Ultimate Styling, added up in his head that with 25,000 listings he’ll immediately save £3,000.00 a year on insertion fees (those pennies all add up) and as he sells motor accessories he’ll also be saving around 2% on most sales.
Another motor’s trader I spoke to initially was pretty peeved at the loss of PowerSeller discount and an increase in prices. In reality though he’s confident of hitting Top Rated Seller status before May and hadn’t realised he’d also be saving 1.9% on the majority of his sales, as most of his items are sub £30.00.
Other sellers really are facing steep price increases on Final Value Fees. John Pemberton of GMDC was pretty annoyed at a 50% increase in fees, especially in the current economic climate, with VAT increases, rising fuel costs and suppliers edging up prices.
His comment was interesting as he said the fee increases will simply leave less free cash to reinvest in stock, thus slowing the overall growth of his business. His frustration is that putting prices up takes up more of his operating capital which leaves less for inventory to list on eBay. However he feels he’s in a better position than much of his competition to absorb the increased costs and is still positive for the future.
Some of the comments I had today were unprintable, there’s a fair amount of anger out there at the increased fees which a lot of sellers are facing.
There’s also been some comparison to Amazon seller fees with several sellers mentioning the closing gap between eBay and Paypal costs and the cost of selling on Amazon. Whilst the gap has closed overall eBay is still a lower overall cost.
Trevor Ginn an eBay vereran with his own website Hello Baby told me that, given that there’s not an awful lot of competition and Amazon charge more than eBay, it’s annoying but there’s not a lot he can do about it… other than sell more on his website. Even then 10% fees for selling on eBay compared to using Google Adwords, which is variable and quite hard to control, means that the new eBay fees aren’t too bad, in his opinion.
The one thing that eBay does have is traffic, and it has that in abundance and all the time they’re making money most sellers will ultimately live with the fee changes. In the last quarter of 2010, business sellers grew their sales 20% (compared to the same period in 2009) and that’s not to shabby a growth rate in a recession.
So what is your take on fees? Will you carry on selling the same amount of inventory on eBay? Are you one of the lucky sellers who’s fees have reduced or if you’re one of the sellers facing a 50% hike in fees how will it affect your business?