With the new FVF on postage, ebay could potentially lose 30% of its sales ( by number ) and still come way out in front. I dont know what the average sale price of an item on ebay is but if we take a stab and guess $35.00 and average post cost is $7.00 heres how it works.
1) The current commision on $35.00 at 8% avarage is $2.80
2) The FVF commission on $7.00 postage at 8 % is 0.56 cents. ( or 20% of the current commision on a $35.00 sale )
3) We can assume that there is many more individual items for sale under the average price than above it ( ie more clothes, kids toys, books etc. by number than cameras and ipods )
4) It is the cheap end of the market that will hurt most from the FVF on postage, as postage makes up a greater % of the item value and FVF, in many cases equelling the vale of items for sale. ( therefore doubling commisions payed to ebay )
With all of this in mind we can see if ebay loses the bottom 30% ( approximatly ) of sales by number, ( ie cheapies ) it will be at the break even point for recieving the same income. ( as before the FVF on postage ) On top of this it will need 30% less staff, 30% less office space, 30% less server space, pay 30% less tax ( JOKE THERE FOLKS ) etc. so recieving the same income BUT reduces expenses by 30%. We can argue about what the average sale price and postage cost is, but the principle holds, just the numbers change slightly............EBAY IS PI*SING ITSELF LAUGHING AT US RIGHT NOW PEOPLE !!!!!!!!!!!!!!
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