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The evolution of higher and higher and higher eBay fees
Summary: baz000000 expressed concerns over increasing fees on eBay, noting a significant rise from an average of 12.6% in 2020 to 19.4%, affecting their business profitability. They've drastically reduced their product offerings due to unsustainable costs. 4_bathrooms detailed historical changes in eBay's fee structure since 2015, highlighting how it impacted both VAT and non-VAT registered business sellers. They noted a decline in sales and the increasing challenges faced by business sellers due to high fees, leading them to move sales to their own website to reduce costs.
We have been on eBay for over 2 decades and almost 6 years as a business seller. As a business owner I appreciate the eBay business has plateaued so the only means to boost corporate profits is to squeeze more and more out of sellers and buyers, their customers. This evolution has been dramatic, we monitor costs of selling. Pretty basic stuff for a business to monitor margins and GP. We have seen over the last 6 years:
eBay Seller costs that ranged from 11% to 14% and averaged 12.6% in 2020 now range from 17% to 22% and average 19.4%. There are several factors adding to this dramatic increase in costs:
Introduction of the regulatory rip off 2% surcharge
Doubling of the minimum 'advertising' rate to 2%
Increasing of insertion fee from £0.22 to £0.48 per item
Easing returns at the sellers expense
We used to manage 32% margin on eBay sales but now eke out 21% meaning we only manage now to make as much as eBay. Every new charge or every increased charge get that double eBay charge of the line item plus the final sale price. Every time eBay raised their charges by 20p we, the seller, need to increase the sales price by 23p to pay eBay the full 23p; their 20p increase plus added sale commission on the charge cost hike
We were selling £6k a week through eBay at one stage. Now we typically sell £500 a week and have £100 in eBay fees. So is eBay shooting itself in the foot. We have cut the product offering by 70% and continue to cull the offerings as items sell out. On other platforms the charges run at 3%. Our days with eBay are numbered, it has become too rich to accommodate our low cost items.
At one point eBay was earning £750 a week on our account, now it is £100 a week. Is that a good sustainable business? Not with our continued involvement anyway.
4_bathrooms
·3 weeks ago · EditedeBay's shafting of business sellers started in 2015. Up until 2015 private and business sellers paid the same fees although business sellers with a high enough turnover benefited from fee discounts on eBay and reduced payment processing fees with (then eBay-owned) PayPal.
In 2015 - when the UK was still a member of the EU - there was a change to how VAT would be treated when a VAT registered business in one EU country provided a service to a VAT registered business in another EU country. The business providing the service would not charge VAT on their supply with their customer treating it as a reverse charge for VAT purposes. Curiously eBay obtained a special dispensation from HMRC that allowed (Luxembourg-based) eBay Europe S.A.R.L. - who UK sellers were contracted to at the time - to charge all UK business sellers net of VAT including businesses that were not VAT registered. Where VAT registered business sellers were concerned nothing had really changed but where non-VAT registered business sellers were concerned their fees were lower due to no VAT being charged on them. Shortly afterwards (about three months from memory) eBay increased their (net) fees by 20% - non-VAT registered business sellers barely noticed as their fees had simply returned to what they had been before. However, for VAT-registered business sellers this was a fee increase they were unable to offset.
2015 also saw the start of the drawn-out eBay/PayPal divorce that eventually culminated in the introduction of Managed Payments; more on that later. In 2016 the UK voted to leave the EU and in circa 2018 eBay announced that its UK sellers would be contracted to a new entity - eBay Commerce UK Ltd (ECUK). When sellers were contracted to ECUK in circa 2019 eBay kept its net fees the same but 20% VAT became applicable on business sellers' already inflated fees. This time it was non-VAT registered business sellers who were affected as they saw their fees increase by 20%.
Then in 2020 managed payments was introduced following the divorce of eBay and PayPal. Under managed payments private and business sellers still had distinct fee structures but overall business sellers' fees had a slight increase and the discounts businesses with high eBay turnovers enjoyed disappeared (along with one of eBay's top UK sellers who seemingly abandoned ship).
I'll leave what happened from 2020 onwards as you've pretty much covered it except for the now enormous disparity between private "buyer protection" and business seller fees which encourages illegal behaviour which eBay is seemingly uninterested in policing.
My eBay turnover is virtually nothing compared to what it used to be. eBay has always mostly been a clearance outlet for old stock or customer returns but I used to stock and sell some items that were stocked specifically for eBay. This has now stopped because eBay's fees are simply too high and clearance stock can be sold via our website which receives much more traffic than our eBay shop at a fraction of the cost even when Google Ads' fees are taken into account.
The same items I used to sell are still available from other eBay sellers so I doubt eBay even noticed when our eBay store was being run down; it isn't as though it would have affected eBay's bottom line. However, there will come a point when eBay starts milking its shrinking herd of cash cows more than they can tolerate but as long as Amazon's FBM offering remains the less attractive option eBay will be staying around.
the_book_seekers
·3 weeks agoI wish ebay would put as much effort and imagination into increasing profits by increasing sales as they do in squeezing as much as possible from business sellers.