topic Are eBay losing fees? in Selling

Are eBay losing fees?

rocket2retro — Thu, 24 Nov 2016 05:18:01 GMT

As you can see by looking at this discussion board, the most common/repeating topic is how much sellers sales have slowed down in recent times.

Over the past 3 years my sales have dwindled considerably. Every year, in my previous 10 years of selling, I had an increase in sales.

Despite eBay finding creative ways to add new fees on top of other fees, the fees I now pay per annum are about 60% of what they were at my peak 4 years ago. I imagine I'm not alone.

In other words the fees I now pay, due to lack of sales, are not being counteracted by eBay adding/increasing fees.

The amount less I'm now paying is considerable (in the $1000s per year).

One possibily is that eBay have known about this downturn for some time and the addition of the FVF fee on postage was an attempt to bolster their profits and stop them from declining. This might have been an effective stop-gap but surely with sellers now paying 16%-17% (my estimate based on my own sales) there can't be much room left for additional/increased fees in the future.

As FVFs seem to be the biggest revenue earner for eBay, surely they are feeling the pinch, assuming my scenario is commonplace.

I realise there are probably more sellers every year & the 'big box' companies are getting on board etc (not to mention the Chinese sellers), but I'd still be surprised if this alone would make up for the shortfall.

I'm curious as to what others might think on this matter.

Re: Are eBay losing fees?

performance_parts_clearance_centre — Thu, 24 Nov 2016 05:28:27 GMT

The sheer sales volume of the major retailers may be reaping eBay a windfall - although they can't be on a 9.9% FVF, anyone who's moving literally thousands of items a month would still be forking over reams of cash into eBay's coffers.

They're certainly losing a fortune in small-seller FVF's from the lower sales we're all experiencing, but would surely recoup much of that from simply unthrottling small accounts. The higher our sales are, the more FVF's they get.

Re: Are eBay losing fees?

davidc4430 — Thu, 24 Nov 2016 05:51:20 GMT

only a tiny number of disgruntled sellers seem to find the boards to vent on low sales so without a decent numbers of sellers being canvessed it would difficult to say the boards are a true guage on success or failure of selling.

Re: Are eBay losing fees?

clarry100 — Thu, 24 Nov 2016 06:32:18 GMT

Certainly in our case the total amount we pay to them in fees is way down as indeed are our sales levels.

I think they must be getting it back from sheer volume of sales by the Chinese sellers tho.

And the big ticket retailers that are on here nowadays.

So I don't think they are huirting too much from the relatively low volume sellers like us.

If the loss of revenue was significant then you would see the share price drop like a stone as shareholders deserted ship.

But that's not happeneing as the share price is staying reasonably stable.

Re: Are eBay losing fees?

casbit33 — Thu, 24 Nov 2016 07:10:15 GMT

I agree that ebay must be losing money from fees.

The throttling on sellers and giving no promotion free listings has had a huge affect on sellers such as myself. I have over 3000 items sitting in my unsold sections for most of this month. They are not earning anything from me. It just makes no sense. Ebay are supposed to be in business to make money, but they continually do things to stop that.

All sellers want to do is list their items and have them visible.

Re: Are eBay losing fees?

digital*ghost — Thu, 24 Nov 2016 09:12:46 GMT

It's hard to say without doing some thorough research, and having a bit of inside knowledge I suspect.

The other ecommerce site I use makes the bulk of their profits from seller services, rather than listing and final value fees (however, the fees are much lower than eBay's, but they provide their own payment processing service which accounts for a big chunk of their profits, and eBay is contractually barred from setting up payment processing services after the split from PayPal). The other 'service' which they (and eBay) provide are promoted listings - I don't really like calling that a service, since it's really just paying more for prominence (visibility), I see that as less of a service and more of a bribe

Other revenue is gained via third party advertising - you don't need to sell items for eBay to get money out of that, you just need to list stuff. Bonus free listings may dry up at times, but ultimately they're a pretty common occurrence for a lot of members.

I do think they're in a more precarious position than some of the other, similar platforms - a lot of their policies have ultimately worked to actively encourage mistrust between buyers and sellers, which was great for PayPal, but in the long term, as more and more online options became available to buyers (but not sellers), other sites were more attractive by default. The MBG tried to combat some of that, but just IMHO, it was poorly implemented and again that just says "trust eBay" when what they really need to do is work on site function and safety (pre-sale, not post-sale) and support sellers (IMO it's sellers that need to be able to trust eBay, while buyers need to be able to trust their sellers).

Re: Are eBay losing fees?

collect247 — Thu, 24 Nov 2016 10:17:05 GMT

That is exactely what I argued with ebay when they suspended my selling account.

I thought that ebay were in business to make money and ebay made a **bleep** load from me when I was selling,

but it seems as they don't care to much about loosing a % on fees as they make it back from other sales.

To me a sale is a sale and every $ earned/made is better than $0.

So who ever runs ebay financially is a moron.

Re: Are eBay losing fees?

chameleon54 — Thu, 24 Nov 2016 11:12:02 GMT

The short answer is no ebay are not losing fees.

Revenue for the last financial quater was 2.22 billion $$$ up 5.6 % on the previous quater and beating market anylists expectations of 2.19 billiion $$ expected revenue.

Net income ( profit ) for the past 12 months ( rolling financial quater basis ) is $413,000,000 down from $539,000,000 the previous year, but this does not take into account the spin off of Paypal which was a major earner for the company.

Revenue for the coming christmas quater is expected to be $2.36 billion - $2.41 Billion, again up on the previous quater, but slightly below anylists forecasts.

Having said that, these figures are not brilliant for an internet business like ebay. If you compare ebays profit of $413 million to our Australian based banks earning Billions of $$$$ profit it puts the figures into perspective. Ebay is struggling to make signifigant profits and share price is still trading in the same $25-$30 price range that it has been stuck on for the past 3 years. ( currently just over $28.00 ) Profit per share ranges from around 35 to 50 cents per share, again not big returns to investors who own the company.

Re: Are eBay losing fees?

collect247 — Thu, 24 Nov 2016 11:30:49 GMT

Of course ebay aren't losing on fees but they could be making more money and as a business that should be their number 1 priority.

Re: Are eBay losing fees?

chameleon54 — Thu, 24 Nov 2016 11:55:43 GMT

@didawaywith wrote:
Of course ebay aren't losing on fees but they could be making more money and as a business that should be their number 1 priority.

I couldn't agree more. Unfortunately ebay seems to have lost its way and identity. The company is not sure if it is a Chinese dollar shop, a garage sale, a mega mall of brand name retailers or a crafts, antiques and collectibles market. This lack of a clearly defined identity makes it difficult to target a particular market and buyer and results in buyers for specific items looking elsewhere.

Personally I think ebay was in its glory days 4 or 5 years ago when it encouraged millions of private sellers to sell private items and build small businesses, often selling unique items. Since moving away from this business model, ebay has struggled to remain relevant in the face of increasing specialised online competition.

Without having access to internal ebay business data it is hard to draw any conclusions about which way the company should go, but what it is doing now is clearly not really working for anyone.

Re: Are eBay losing fees?

4green2000 — Thu, 24 Nov 2016 22:30:39 GMT

@chameleon54 wrote:
@didawaywith wrote:
Of course ebay aren't losing on fees but they could be making more money and as a business that should be their number 1 priority.

I couldn't agree more. Unfortunately ebay seems to have lost its way and identity. The company is not sure if it is a Chinese dollar shop, a garage sale, a mega mall of brand name retailers or a crafts, antiques and collectibles market. This lack of a clearly defined identity makes it difficult to target a particular market and buyer and results in buyers for specific items looking elsewhere.

Personally I think ebay was in its glory days 4 or 5 years ago when it encouraged millions of private sellers to sell private items and build small businesses, often selling unique items. Since moving away from this business model, ebay has struggled to remain relevant in the face of increasing specialised online competition.

Without having access to internal ebay business data it is hard to draw any conclusions about which way the company should go, but what it is doing now is clearly not really working for anyone.

thumbs up on that.

Re: Are eBay losing fees?

englishrosegardens — Thu, 24 Nov 2016 23:11:17 GMT

For every seller with reduced sales this year there's probably another seller with increased sales - and those sellers are too busy selling to come to the boards complaining.

Some categories have more listings than ever before but the number of buyers hasn't increased, so each seller gets a smaller piece of the pie. Take jewellery, for example. There are half a million listings under Fashion Jewellery, so a seller would have to have either a very special product or a LOT of listings to even be seen. Yet I see some jewellery sellers constantly complaining of poor sales. This is just one example of a category that's extremely competitive, and not everyone selling there can have good sales.

A lot of sellers see something else that's selling well so they decide to sell it too, but if everyone else gets the same idea then the same thing will happen because the market will be over-saturated. Also, some things just go out of fashion and sales dwindle. Over the last few years 'collecting' has been popular, but everyone I know has filled their garages, sheds, spare rooms and everywhere else, and they've got nowhere else to put anything so they're forced to stop buying. Also, some people realise their buying has got out of hand so they start to sell off a few things themselves, and this makes more competition for those who've been selling the same items for years.

Re: Are eBay losing fees?

padi*0409 — Thu, 24 Nov 2016 23:57:40 GMT

After I'd been buying on eBay for a while, I started to toy with the idea of selling some of my collectables and rationalising my collection a bit.

However when eBay brought in the MBG and Paypal brought in their 180 day return limit (amongst other things), that plan was quickly abandoned, hence I'm certainly buying less through them and am certainly not considering selling on their platform until I see a more level playing field brought in for sellers.

So eBay, in reality, is losing out in 2 ways with me as I'm not buying nearly as much as I used to, and I'm not going to be selling through them any time soon.

I suspect other buyers are in the same boat as me and this could be part of the reason for decreased sales and/or lower prices being achieved on those items that do sell at auction.

Regarding the allegations of "throttling" it would seem to me to be counter productive to both buyers and sellers in that if I can't see an item unless I go into one of my "saved sellers" then obviously I'm not going to buy that item if it doesn't show on "followed searches".

"Catch 22"................................