eBay Fee Increases Announced

I must give eBay credit, the fee changes they made this year were a wise business move. First they decreased the insertion fee for 0.01 - 0.99 start price. Previously there was only a 10 cent spread between this tier and the 1.00 - 9.99 range. If you look at it from a percentages point of view, the cost to list in the 1.00 - 9.99, just increased 33% over the first tier, so eBay is hoping this will influence more people to start auctions in the lowest tier. Auctions that start at 0.99 or less draw more attention and a lot of times this will increase the final value due to watchers. Also eBay will more than make up for this and increase the company's income and growth for the next year by the increase in the final value fee on the second tier (25.00 - 1000.00).

I believe that most people who are making a living by selling on eBay (ie full time selling on eBay without supplemental income) typically sell products that fall in this range. Sure there are those who may sell for less, but they either have to push a lot of volume, or have a very large profit margin to make money soley on items that sell for less than $25.

By increasing the fee on this tier only, eBay has effectively decreased the cost for all recreational sellers (those who are selling stuff around the house) if they start their auctions at 99 cents or less, since typically these auctions won't close for over $25.