topic Re: 9.9 % final value fees in Selling

9.9 % final value fees

diecastcarsvicki — Thu, 06 Feb 2014 13:24:37 GMT

honestly 9.9 % final value fees has killed off a lot of sellers as you just cant cover those cost on an item.

come on ebay at any one time there are millions of millions listings and even if only half of those listings sell wow what a great profit to ebay. please justify why final value fees are so high. because of high final value fees auctions are becoming a thing of the past. after all auctions are what kicked off ebay to what it is today. how can a seller sell an item cover the 9.9% final value fees plus if paid by paypal pay more fees and without free listings wow thats a lot to try an add onto an item then postage comes a factor on top of all this and to keep priced below b&m shops as to justify a buyer having to pay postage.

am i missing something here i cant sell items at a loss and thats what we are being forced to do to remain competive to others selling the same items. a fair final value % should be around 4 % max

Re: 9.9 % final value fees

bettyboopsadaisy — Thu, 06 Feb 2014 13:50:05 GMT

I do agree that the FVF's are quite a big chunk of the sale price at 9.9% but you nevertheless won't sell at a loss.

PayPal fees are a much smaller percentage of the sale price and if the seller doesn't wish to foot the bill for postage, they are not forced to. That cost can be passed on to the buyer. My impression is that very few sellers are offering free postage.

You are still going to make a profit of some sort on sold items, unless of course you make the opening bid or BIN price, a lot less than the item cost you in the first place. If you do that, then you have made the conscious decision to take the risk of possibly making a loss on the sale.

Of course, you may feel that the profit you are making after all the fees are paid, is simply not worth the effort that listing involves. That's a decision each seller will make for themselves.

Until ebay encounters some REAL competition from some other online auction site, they won't be changing their fee scales (other than possibly to raise them at some unspecified time in the future. . .perish the thought !!!!) There is STILL nothing to touch ebay in terms of the potential bidders / buyers it attracts and . . .that's the rub !!

Re: 9.9 % final value fees

clarry100 — Thu, 06 Feb 2014 20:59:08 GMT

We have been tracking fees (among things for tax reasons) since the beginning of this tax year.

Gross fees across 2x ebay stores between both ebay and PayPal is currently 15.7% overall of total sales. Apart from the cost of our stock this is the highest single cost element to us.

Postage is 10.8%

Overall we end up with about 25% of total sales in profits after all taxes, fees, stock costs and other expenses.

But... We are happy with that. We can make a living from it.

Re: 9.9 % final value fees

phorum_junkie* — Thu, 06 Feb 2014 23:58:21 GMT

I have 3 selling ids, one of them with a $49.99 store which has a very small decrease in fvfs. My other 2 are non store ids. That means I get 280 free listings a month and I can tell you that my overall fees across the 3 ids are considerably less than when I was paying 20c per store listing and 50c for non store items, I might add that the number of items I am selling and the price they are selling for at auction is about the same but my total profit is higher

Nobody forces you to use ebay so if you don't like their prices shop elsewhere just as you would if Coles sold things at double the price of Woolies...

Re: 9.9 % final value fees

diecastcarsvicki — Fri, 07 Feb 2014 02:09:45 GMT

never said im being forced to use ebay.

Re: 9.9 % final value fees

*crikey*mate* — Fri, 07 Feb 2014 04:52:52 GMT

If you are selling stuff, anywhere, the general guideline to set sale price is

1/3 net product costs including losses

1/3 operational expenditure such as overheads (rent/fees), wages, utilities, depreciation on equipment, stationery etc

1/3 profit

So, if you can't make your product fit into that criteria and sell at a price that the market will bear, then it is not a viable commodity to sell on that particular platform.

The answer - find a different platform or a different product

Re: 9.9 % final value fees

putney32 — Fri, 07 Feb 2014 04:57:43 GMT

B&M Auction houses charge Sellers anywhere from 17 to 27% final value fee AND charge the buyers a further 10-17% final value buyers premium, so eBay is still coming out ahead of local auction houses

Re: 9.9 % final value fees

*crikey*mate* — Fri, 07 Feb 2014 05:27:57 GMT

@diecastmodels2014 wrote:
honestly 9.9 % final value fees has killed off a lot of sellers as you just cant cover those cost on an item.

From what I understand, a regular auction house charges about 15%? (not saying that eBay is an auction house, or an auctioneer, as they aren't but, for comparative purposes)

come on ebay at any one time there are millions of millions listings and even if only half of those listings sell wow what a great profit to ebay.

To be fair, most people enter into business to make money/profit, eBay is no different. And eBay is only worth the price their shareholders are prepared to pay. This is determined by the dividends that they earn. So, decrease their profits and eBay's worth decreases creating a catch 22 and vicious circle. Eventually, their business model becomes unsustainable, they lose market share and create new competition for their market as the entry "price" just made it easier to compete.

please justify why final value fees are so high.

They own the business, why do they need to justify anything? Clearly, the current fees are what the market will bear, otherwise people would leave/stop selling and no new sellers would enter the market to replace them.

This is the price that eBay are prepared to offer their services for, it is up to the "customer" to decide if they want to pay those prices.

The goal of business is to maximize profit. eBay are not a community servioce or obl;iged to sacrifice their profit to increase that of another. They have shareholders and stock value to satisfy

because of high final value fees auctions are becoming a thing of the past.

are they?

after all auctions are what kicked off ebay to what it is today.

and my milk factory used to deliver goods in a horse and cart in bottles, and car manufacturers didn't have electric tools and equipment - businesses and industries evolve.There is no obligation to stay with a previous business model as new and progressive aslternatives become available.

They how can a seller sell an item cover the 9.9% final value fees plus if paid by paypal pay more fees and without free listings wow thats a lot to try an add onto an item then postage comes a factor on top of all this and to keep priced below b&m shops as to justify a buyer having to pay postage.

you need a different product or business model.

Maybe focus on not competing with B&M, but the convenience factor or country wide availability for those without access to specific items from their location that they wouldn't otherwise have. For clothes etc, maybe the local store sold out of your preferred size or other variation.

There is also the time factor - people are busy (and lazy) online shopping is certainly a growing trend even for things they can buy up the road. For example, I bought a sticky tape dispenser off eBay. Now I live in a major city, 5 minutes from a major shopping centre with K mart, office works, newsagents etc.... but everytime I go to the store, I forget I need a new tape dispenser, so I don't buy one. Now a year down the track, I finally got impatient enough with the old one that I went "stuff it, I'm ordering one now!"

am i missing something here i cant sell items at a loss and thats what we are being forced to do to remain competive to others selling the same items. a fair final value % should be around 4 % max

My suggestions are as above, change your platform or your product.

I know I am supposed to offer some kind of condolences here or insincere platitudes or something, so I'm sorry that this frustrates you and you are struggling to create the profits that you desire from your current business plan.

But this is how business works and every trader has to make these kinds of decisions. "Is it viable for me to set up a Catholic School in a Muslim community. Is it viable for me to set up a Greek Restaurant in an area where there are 50 other restaurants, 30 of them Greek." I want to sell this product, at this price, is it viable. Do I set up an air conditioning business in a snowfield"?

Those and similar decisions are ones businesses have to make every day. Does their product suit the platform and product. If not, they need to change something to make it viable.

The fees are your agreed upon "rent" for your place of business. The simple answer is that eBay don't want to or can't charge lower whilst keeping their shareholders happy, and the market is saying, they don't need to.

it seems that for every person who this business plan doesn't work for, there are sufficient for who it does, making this a viable level for eBay to operate.

also remember, they have costs and overheads too, Those commissions on sales don't equate to total money in their pocket.

They have staff, buildings etc etc all the things other businesses have as well (tax obligations? head office is in switzerland)legal costs, administrative costs etc etc etc

Re: 9.9 % final value fees

diecastcarsvicki — Fri, 07 Feb 2014 07:27:03 GMT

thanks for the reply.

your answer gives me something to work with cheers vicki

Re: 9.9 % final value fees

*crikey*mate* — Fri, 07 Feb 2014 08:13:51 GMT

Yopu're welcome.

Now, I have no idea how many people eBay employ, but I am guessing a fair few, yes?

Just look here at eBay Australia.

This chat board is serviced by Lithium software. So there is a fee for the software.

I don't know if that inckludes the wages for the moderators of these boards, so either the software costs enough to cover their wages and provide the other services (data mining etc) or eBay pays the moderators.

There are 6 of those that I know of (there might be more.)

There is joanna the eBay rep who comes to the boards

There is at least one person who answers the phiones in the phillipines when we ring the servixce centre.

That's 8 there at lets say $50,000 p/a each in wages, => $400,000 just in that.

That's not counting the staff at their sydney office, or all the other legals, accountants, site technicians, PA's, account managers, trust and safety, managers of programs like Vero etc...

so even though they probably earn billions, there are a fair few wage costs alone.

Re: 9.9 % final value fees

amber-eyed-girl — Fri, 07 Feb 2014 09:13:54 GMT

Crikey, the moderators may well be having a giggle at your estimation of their wages.

If they are Australian contractors working for Lithium, but not employees.

Re: 9.9 % final value fees

*crikey*mate* — Fri, 07 Feb 2014 12:27:34 GMT

They get bonuses for danger money and groin guards and other protective clothing

but surely they wouldn't do it for much less than that?????

forum mod would be a shocking job.

reading all the mindless dribble of every single poster about topics that they probably have absolutely no interest in????

Isn't minimum wage $45,000? (I just rounded iot up to $50 cos it was easier number to work with.)

Re: 9.9 % final value fees

amber-eyed-girl — Fri, 07 Feb 2014 12:46:50 GMT

Crikey, a contractor for an international IT concern could get anywhere from 800 to 1800 a day...

Depending on their precise job and experience.

Re: 9.9 % final value fees

*crikey*mate* — Fri, 07 Feb 2014 13:54:47 GMT

oh, so you are implying they might earn more?

NFI.

Re: 9.9 % final value fees

tawtak — Sun, 09 Feb 2014 03:30:46 GMT

These fees seem to be geared at people with a business, which is fair enough,, but for those that want to sell things here and there its just plain discouraging,, it would seem that if I sell something for $550.00 ( that is perhaps a one off thing, an item bought and then not needed) I am out of pocket on this quite a bit, now you cannot say " well price the item to cover this" when that item cost you this or more in the first place, I know Ebay is a business and not a community free service,, but 9.9 % ????? People buying on Ebay are not buying from your local Woolies or target with all the services offered at these store so therefore they want items to be cheaper than the are in thier local shops and on top of this they the buyer are paying postage which adds to the final price for them. I do agree that well if you don't like it go elsewhere not Ebay,,,,, but hey, they have this forum so why not voice my thoughts.

Re: 9.9 % final value fees

amber-eyed-girl — Sun, 09 Feb 2014 04:12:24 GMT

It depends on what you want to sell, and what other avenues you have that are convenient for you; that is a factor when deciding if eBay is cost effective.

For sellers who have built up a good reputation and have a regular buyers list, there is the option to investigate the costs involved in starting up their own website, at first alongside eBay sales, then a shift to independent selling.

Just a thought.

It is an option as eBay sales become more expensive.

The forums are a place where sellers (and buyers) should feel comfortable discussing their eBay thoughts and experiences 🙂

But the reality is, concerns about selling (or buying) and ideas as to how eBay can be improved, need to be mentioned to eBay directly, for any chance of change.

Whenever I see the "let us know what you think" tabs, if I have something to say or request, I use it.

eBay does have the 40 free listings for the casual seller, and the odd promotion for list for free (no final value fees).

If they wanted to encourage more sellers to begin, they could reduce the % fee on sales for say, a month or two. Then that would give people an idea as to whether eBay would work for them in terms of getting buyers, then take it from there.

Re: 9.9 % final value fees

green-teas — Wed, 05 Mar 2014 19:21:38 GMT

so you have posted 11k post and 69 feedbacks, are you getting paid to answer questions here?

Re: 9.9 % final value fees

davewil1964 — Wed, 05 Mar 2014 20:30:03 GMT

A lot of posters, me included, have more than one ID, and don't use our primary selling one to post on the boards. Did you need to bump a month old thread to add that pearl of wisdom?

Nobody gets paid to answer questions here; we are just public spirited members trying to help out. Generally.

Re: 9.9 % final value fees

pentney97 — Wed, 05 Mar 2014 22:14:34 GMT

I would have thought a high trading feedback score visible on the forum posting pages would give greater credibility to the poster.

Re: 9.9 % final value fees

kobies_costume_jewelry — Thu, 06 Mar 2014 03:01:05 GMT

No they dont get paid but they should.

If it wasnt for people like Crikey and Dave just to name a few, giving good advice from years of selling I would of quit about 2 weeks after I started.

But Im still here learning new stuff everyday and we are having fun selling because of helpful sellers who take the time to answer questions they have no doubt heard before.

Keep it up people some of us really appreciate the time and effort you have given.