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eBay Seller Release – Fee changes case study

By Chris Dawson July 31, 2013 - 9:19 am

Following the eBay UK Seller Release I met up with an eBay seller last night and over a couple of beers we did some “back of the fag packet” calculations to see how the changes announced yesterday would financially affect his business.

Postage Fees

The biggest item on the agenda was of eBay charging fees on postage. First up all of his UK items have free post anyway so he’s already paying fees on postage. For him at least, eBay charging fees on postage just levels the playing field against competitors who charge postage separately.

Top Tip – if you can offer free post and then when you qualify your item as a Top Rated item you’ll get 15% discount on final value fees charged on your postage – there’s no point charging postage separately unless you typically have multi-quantity or multi-SKU orders.

International Postage Fees

International shipping is of course something quite different. That’s where the big worry for sellers is as International Postage is significantly more expensive that domestic. So just how badly is he going to get stung?

Thankfully he loads international postage a little and makes about a £1 an item profit on overseas shipments which would pay eBay. He’d rather keep that extra profit for when he has to refund return postage though.

The fact remains however that with a cost of between £8 for Europe and £12 for Australia and typically a 200 cross border sales each month that’s a postage bill of around £2000/month that eBay will be gouging 10% in fees from – a bill increase of £200 per month with no additional benefit. Ouch!

eBay Shop downgrade makes sense

Now the good news – currently the account is run on an Anchor store at £349.99 per month. However with free listings in France, Italy and Spain as well as 200 listings in Australia and 500 on eBay.com, a Featured Shop looks like a money saver. The disappointment is eBay Germany, but with insertion fees down to €0.05 (about 4p a listing) he doesn’t mind paying those.

The thing is he’s only got about 200 eBay listings on eBay UK in total – although with multi-varitations that equates to approaching 1000 products. With 200 listings he has plenty of room for expansion before he has to worry about paying UK insertion fees – A Featured shop comes with 1200 free eBay UK fixed price listings. To put all 200 listings on eBay Germany will cost about £8 per month, as would insertion fees for any other EU sites he chose to expand to.

Because many of his products are on multi-variation listings, the number of listings on eBay Australia might creep over 200, but it looks well worth swallowing any additional insertion fees – cost works out around £2 per listing.

Now the really good news, by downgrading to a featured shop the cost drops from the current £349.99 down to £69.99 per month. That’s a massive saving of some £280 per month, more than balancing out the fees he’ll be paying on postage and eBay Germany insertion fees. Even if he decided to expand massively (he doesn’t need to with multi-variation listings, a couple of listings is a lot of product!), the cost of an Anchor Shop is being reduced to £249.99 per month with free insertion fees for the EU, Australia and eBay.com.

How do the numbers stack up?

Have you run the figures for your business? They will of course be totally different to the example above and the costs could easily swing either way. For instance if overseas sales tripled in the next year the savings would be swallowed up in the additional postage costs. If he had been charging UK postage, instead of including postage in the item price, then that again would have resulted in a fee increase rather than a decrease.

However for this seller at least, the overall seller release package is great news and he’s onto a winner. As soon as the new fees kick in he’ll downgrade his eBay shop and start saving money.

  • 4 years ago

    Hi Chris, how do you reckon they will stack up for sellers like myself who sell mainly on auction?

    I have tried adding postage into the starting price, but for porcelain and glass, the postage can be disproportionate, and it stops sales dead in their tracks. Also, it makes combining items very difficult, often my customers will buy several items just to keep the postage acceptable, including postage in the cost means they can be paying postage several times over. So I will continue to show the postage cost separately where I have to, and take the hit by not having TRS discount on those items.

    Disappointingly, I don’t see any of Tamebay’s comments recently applying to traditional smaller auction sellers.

    Have you given up on us?

  • 4 years ago

    Hi Lynne

    The big news was the massive savings in fees for auction sellers who have higher start prices.

    Anyone that’s been used to paying up to £1.30 insertion fees can get them down to 15p by just having a basic shop and even without a shop they’re capped at 30p.

    I know your products are typically lower cost but as you’ve already got an eBay shop you’ll save on anything with a start price over a fiver.

    • 4 years ago

      thanks Chris, shame about fees being levied on postage, we have only recently had to alter our postage prices due to the RM/MyHermes hike this Spring, looks like we might now have to increase yet again. Or just take the bite.

      Some categories haven’t suffered with the recession as much as others, we are one of the ones that have. We’ll keep on trying to make a small profit, but it is certainly getting harder, and eBay are giving with one hand (lower insertion fees) and taking with the other.

  • JD
    4 years ago

    ‘ … you’ll get 15% discount on your postage … ‘

    Where can I get 15% discount on my postage please?

    And as 75% of my stuff is currently going overseas this release is all plain nasty!

    • 4 years ago

      15% discount on final value fees charged on your postage… sorry wasn’t clear enough :-)

      If you charge postage the 15% TRS discount on fees is on the item only with no discount on postage.

      If you have postage cost included in item cost you get 15% TRS discount on fees for the lot.

      If you’re selling a lot overseas are you just listing on eBay UK with shipping to elsewhere or are you actively listing on other eBay sites?

  • JD
    4 years ago

    It is difficult to list ‘one-off’ items on multi International sites without an extra layer of management.

    I am thinking of a substantial reduction in the items listed on eBay based on how the detail works out in practice for me. The current drive to immediate payment is not helpful either and will also impact fees/costs.

    The first thing that I do is put all my prices up on 1st September and see what happens!

    As far as I am concerned buyers will pay more, I might stand still while eBay rakes it.

  • Bal Sanghera
    4 years ago

    I noticed your comments on being able to get 15% discount on TRS lines. But I’ll have to offer Free postage to qualify. I won’t always be able to add the postage cost to the item cost either, because the product will stop looking attractive in the market place. But the big thing that is missing here is that eBay are doing away with the power seller level discount. Currently I get 20% discount on my fees for being a titanium power seller….not from tomorrow.

    • Jimbo
      4 years ago

      Shhhh. You’re not meant to remember/notice that.

    • 4 years ago

      We know :-( However that was announced way back in the Spring Seller Release on TRS changes.

      This fee analysis was mainly to focus on fee changes announced this week.

  • Lee Pearce
    4 years ago

    Something that is stuck in my mind is that I am sure that you do not qualify for TRS FVF discount on sales listed directly on other ebay sites.

    I will dig around for where I saw this, but I am sure I heard right when I was speaking to ebay customer services about this!!

    Lee

  • Gerry007
    4 years ago

    .
    Sadly [and annoyingly] this is all bad for us.

    Ebay’s decision to charge fees on P&P is just horrible.
    Most of our item fall into the £1-8 bracket and charging another 10% postage just will be hard to implement and will not wash.

    Online platforms are always carrying on about low Postage charges keep the buyer happy, etc, and here they are taking a great big back hander out of it.

    We have a competitor who has 1000s of listing [hence they are bigger than us] but we have NOT seen any costs increase in their prices for a few years now, even though postage has gone up alot.

    I am afraid I am in business to make a living & a profit. This is now being reduced & we will have to subsidize our packing staff’s wages…..which was paid out of P&P charges.

    All not very good!!.

  • Toadlady
    4 years ago

    Top Tip – if you can offer free post and then when you qualify your item as a Top Rated item you’ll get 15% discount on final value fees charged on your postage – there’s no point charging postage separately unless you typically have multi-quantity or multi-SKU orders.

    And there’s the rub!

    Yet again sellers of low value/high postage price items, who rely on multiple item orders with excellent postage discounts – many where all additional items go post free – are penalised by eBay at every turn.

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