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I'm more concerned with PayPal fees. If you haven't heard, BidPay, once a popular free online payment service and probably PayPal's biggest competitor, has just gone under.
Given the pattern of eBay's business practices, now that eBay has the only competitor for free online payment service out of the way, it will take the opportunity to raise the fees for PayPal. Just wait and see.
In fact, I think eBay has used unfair business practices to get rid of PayPal. I had a BidPay account and let BidPay add a button and link to my listings. Then eBay, for whatever reason, started blocking BidPay's ad insertion. eBay kept rejected BidPay's attempt to put its button into my listings. That seems to be a very anti-competitive practice, so of course BidPay would go under. Why doesn't BidPay go after eBay in court for that? Beats me.
Given the pattern of eBay's business practices, now that eBay has the only competitor for free online payment service out of the way, it will take the opportunity to raise the fees for PayPal. Just wait and see.
In fact, I think eBay has used unfair business practices to get rid of PayPal. I had a BidPay account and let BidPay add a button and link to my listings. Then eBay, for whatever reason, started blocking BidPay's ad insertion. eBay kept rejected BidPay's attempt to put its button into my listings. That seems to be a very anti-competitive practice, so of course BidPay would go under. Why doesn't BidPay go after eBay in court for that? Beats me.
quote:Originally posted by ktchong:
I'm more concerned with PayPal fees. If you haven't heard, BidPay, once a popular free online payment service and probably PayPal's biggest competitor, has just gone under.
Given the pattern of eBay's business practices, now that eBay has the only competitor for free online payment service out of the way, it will take the opportunity to raise the fees for PayPal. Just wait and see.
In fact, I think eBay has used unfair business practices to get rid of PayPal. I had a BidPay account and let BidPay add a button and link to my listings. Then eBay, for whatever reason, started blocking BidPay's ad insertion. eBay kept rejected BidPay's attempt to put its button into my listings. That seems to be a very anti-competitive practice, so of course BidPay would go under. Why doesn't BidPay go after eBay in court for that? Beats me.
Because eBay is a monopoly and has billions of play dollars to play with -- BidPay doesn't.
I hate the fees as well. Still at the end of the day, I'm pleased I can sell something I paid $1.00 for, for $99.95 or whatever.
I agree, this year PayPal fees may go up. At some point, they will have to get creative with their fee hikes. They can't continue to raise them every year. They'll knock out their small sellers. Don't think for a second eBay wants to rid themselves of their smaller sellers. They don't. I was thinking they might do a tierd fee structure or something. I'm not sure how it would work.
This today in AuctionBytes NewsFlash:
eBay is set to announce earnings on Wednesday, and some are also expecting
an announcement of some changes to its fee structure. Last year, sellers
protested the increases eBay made to some of its fees that took effect in
February 2005, including the raising of commission fees for eBay Store
items. eBay had announced the fee changes a week before announcing fourth
quarter earnings for 2004. This year, rumors have eBay announcing fee
changes the same day it announces earnings.
eBay is set to announce earnings on Wednesday, and some are also expecting
an announcement of some changes to its fee structure. Last year, sellers
protested the increases eBay made to some of its fees that took effect in
February 2005, including the raising of commission fees for eBay Store
items. eBay had announced the fee changes a week before announcing fourth
quarter earnings for 2004. This year, rumors have eBay announcing fee
changes the same day it announces earnings.
Maybe it is time to boycott ebay again, but for a longer period. The little guys banded together to make eBay what it is and we can band together to make our voices heard.
Well folks, there WILL be a fee adjustment again this year, it's just been announced. Basically, it is:
For core insertion fees for auction-style and Fixed Price listings on eBay.com, we're again lowering the lowest tranche fee (i.e. for items with a starting price of $0.01 to $0.99) - from a quarter to twenty cents. This is a price reduction.
For final value fees for auction-style and Fixed Price listings on eBay.com, we are increasing one fee this year - the final value fee for the middle tranche, which will increase from 2.75 to 3%. For a $100 final value, this will increase the $75 portion of the fee from $2.06 to $2.25.
There are no changes for eBay Stores fees.
For feature fees --
* We're making Picture Show and Sales Reports Plus free for everyone.
* We're reducing the fees for the second and third tiers of Picture Manager and increasing the storage you get at these higher levels.
* And we're trying something that has worked well for us on eBay Motors. For the first time, we're offering two new Feature Packs of optional listing features that can save you up to 39% per listing.
For core insertion fees for auction-style and Fixed Price listings on eBay.com, we're again lowering the lowest tranche fee (i.e. for items with a starting price of $0.01 to $0.99) - from a quarter to twenty cents. This is a price reduction.
For final value fees for auction-style and Fixed Price listings on eBay.com, we are increasing one fee this year - the final value fee for the middle tranche, which will increase from 2.75 to 3%. For a $100 final value, this will increase the $75 portion of the fee from $2.06 to $2.25.
There are no changes for eBay Stores fees.
For feature fees --
* We're making Picture Show and Sales Reports Plus free for everyone.
* We're reducing the fees for the second and third tiers of Picture Manager and increasing the storage you get at these higher levels.
* And we're trying something that has worked well for us on eBay Motors. For the first time, we're offering two new Feature Packs of optional listing features that can save you up to 39% per listing.
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. eBay knows this and has decided this is where they can make an increase without a lot of complaints. These sellers are not going away over a .25% increase unless they were selling on razor thin margins already.
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.
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. eBay knows this and has decided this is where they can make an increase without a lot of complaints. These sellers are not going away over a .25% increase unless they were selling on razor thin margins already.
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.
Oh yes, and lest we forget:
eBay reported record consolidated Q4-05 net revenues of $1.329 billion,
representing a growth rate of 42% year over year. For the full year, eBay
generated consolidated net revenues of $4.552 billion, a 39% increase over
the $3.271 billion in 2004.
By the way, lowering the entry price of the 99 cent item by a nickel certainly won't put more money in my pocket. Especially if that item sells over $25 where they take it away again. Also, if you sell a 99 cent item for 99 cents and then the buyer pays via Paypal, in which YOU bear the burden of the fees for the additional costs of postage - which are now more, you are basically left with almost nothing. It makes no sense to see 99 cent items paid for by Paypal.
I'm not crying sour grapes because the fee increase won't kill me, it's actually insiginifcant, but like every other year they announce record growth and raise fees.
eBay reported record consolidated Q4-05 net revenues of $1.329 billion,
representing a growth rate of 42% year over year. For the full year, eBay
generated consolidated net revenues of $4.552 billion, a 39% increase over
the $3.271 billion in 2004.
By the way, lowering the entry price of the 99 cent item by a nickel certainly won't put more money in my pocket. Especially if that item sells over $25 where they take it away again. Also, if you sell a 99 cent item for 99 cents and then the buyer pays via Paypal, in which YOU bear the burden of the fees for the additional costs of postage - which are now more, you are basically left with almost nothing. It makes no sense to see 99 cent items paid for by Paypal.
I'm not crying sour grapes because the fee increase won't kill me, it's actually insiginifcant, but like every other year they announce record growth and raise fees.
I have no problem with eBay reporting record growth, I own the stock in my retirement portfolio, so their growth is good for me.
Every company has to increase revenue from year to year to keep up with inflation and provide value for share holders. I would guess given the Consumer Price Index from the last year, the fee increase eBay made this year aren't enough to compensate for inflation from the past year.
Every company has to increase revenue from year to year to keep up with inflation and provide value for share holders. I would guess given the Consumer Price Index from the last year, the fee increase eBay made this year aren't enough to compensate for inflation from the past year.
quote:Originally posted by Magie Noire:
Because eBay is a monopoly and has billions of play dollars to play with -- BidPay doesn't.
I hate the fees as well. Still at the end of the day, I'm pleased I can sell something I paid $1.00 for, for $99.95 or whatever.
I agree, this year PayPal fees may go up. At some point, they will have to get creative with their fee hikes. They can't continue to raise them every year. They'll knock out their small sellers. Don't think for a second eBay wants to rid themselves of their smaller sellers. They don't. I was thinking they might do a tierd fee structure or something. I'm not sure how it would work.
Given the way eBay has increased their fees, I wouldn't be surprised if Paypal increased the fees on their Merchant Rates for monthly sales over $3000. This would keep the fee increase from hitting the little guy. I would guess something along the line of a .25% increase per Merchant tier.