The Implications of eBay’s No-Fee Policy for Private Sellers: A Threat to Business Sellers?

[johnsonfamilytrading]

eBay has long been a popular platform for both casual and professional sellers, allowing individuals to turn their clutter into cash and businesses to reach a broader audience. Recently, eBay announced a no-fee policy for private sellers, a move that many view as a strategic effort to attract more casual users to the platform. However, while this may seem like a boon for private sellers, it could have dire consequences for business sellers who still bear the full burden of fees and subscription costs.

The No-Fee Advantage

For private sellers, the elimination of fees represents an exciting opportunity. It lowers the barrier to entry, allowing anyone with a few items to sell to start turning a profit without worrying about upfront costs. This could encourage more people to try selling on eBay, leading to an influx of new listings and potentially more buyers on the platform.

While this sounds positive, the reality is more nuanced.

The Burden on Business Sellers

Business sellers, those who rely on eBay as a significant revenue source, still face the full suite of fees, including listing fees, final value fees, and often, subscription fees for a shop account. These costs can quickly add up, squeezing profit margins and making it challenging for them to compete.

With the no-fee model attracting more casual sellers—many of whom may be pricing their items to move quickly, perhaps even undercutting established business sellers—competition becomes fiercer. Private sellers often lack the overhead that businesses manage, enabling them to offer lower prices without the same pressure to maintain a sustainable profit margin.

The Risk of Price Undercutting

As more private sellers flood the market with no fees, the likelihood of price undercutting increases. For example, if a private seller lists a similar item for a significantly lower price—say, due to a lack of associated costs—business sellers might find themselves compelled to lower their prices to remain competitive. This creates a race to the bottom, ultimately eroding profit margins and threatening the viability of businesses that have invested in inventory, branding, and customer service.

Quality vs. Quantity

Another aspect of this dynamic is quality. Business sellers often invest time and resources into providing excellent customer service, high-quality listings, and reliable shipping. While casual sellers may not always prioritize these elements, buyers may begin to favor the lowest price over service quality. This shift could diminish the overall customer experience on eBay, pushing buyers away from the platform in the long run.

Long-Term Sustainability

The introduction of a no-fee model for private sellers may seem beneficial for boosting engagement and activity on eBay in the short term. However, in the long run, it threatens to create a less sustainable ecosystem for business sellers. If these sellers can no longer make a living from their eBay operations due to increased competition and diminished margins, we could see a significant drop in the quality and variety of products available.

In the worst-case scenario, some business sellers may be forced to leave the platform altogether, which could ultimately drive buyers away as well. The loss of trusted sellers and quality products could tarnish eBay’s reputation, leading to a diminished user base and reduced overall transactions.

[british-ceramics-and-paintings]

Ebay isn't a charity, in simple logical terms it isn't beneficial for them to provide a place to sell for free regardless of the sellers are buyers viewpoint.

It is going to have to clean the platform up considerably, it's just a question of how long it takes, months or years ?

[ett1954]

"...it's just a question of how long it takes, months or years ?" - they don't have years, many of us will be gone long before then; either voluntarily or involuntarily.  As a business you cannot compete with business sellers operating on a fee-free system so your choice is join them or go.

Just tried to report one of my 'private' seller competitors, multiple items on many of his thousands of listings some of which are new (he is manufacturing them).  Tried to report but the new system doesn't recognise his username! (which in itself indicates he is a business).  Farcical.

[british-ceramics-and-paintings]

I agree, they don't have years if they want to keep enough businesses on board however as we both know the issues that need cleaning up have been ongoing for many many years so I'm not overly confident they can move quickly enough unless there is a radical change in approach, perhaps there will be.

[cabletie555]

As a private seller I was being given 1000 free listings a month on which I paid fees but about every 2 weeks there would be a 100 free listings with 80% off fees. In past years the regular 100 free listing bonus offers were 100% fee free, so this isn't something new. Now I am given a lot less than before - 300 instead of 1000 plus 200 at 80% off, although all 300 are fee free. I had over 100 auction listings lasting 10 days and now I can't even relist all those existing ones every month, so I have to convert some of those to buy it nows to stay under the new monthly limit. So it's not that big a change really, but it does mean I can reduce some prices and perhaps shift a few old items where the postage and fees made up a large proportion of the price, some of which have been on sale for years. Historically it was said that private sellers were better off using auction listings as they would get better visibility on the site as their buy it now ads would not be promoted as much as those of business sellers. If you look at sold items there are always a wide variety of prices for the same items, which I think shows that people do take into account things like a good service. Often I've seen business sellers able to post things at prices that are unavailable to me. While keeping a lookout for various things to buy on eBay it seems there are less new ads appearing in the few days since this has been introduced, perhaps it has temporarily confused people.

[ett1954]

@cabletie555   Please note: no one here is being critical of genuine private sellers receiving this free listing offer.  The dissatisfaction is purely with eBay and business sellers registering their business as a private seller to evade eBay fees and gain a significant competitive advantage over correctly registered business sellers who receive no free listing or reduced Final Value Fee offers, with every listing being paid for individually or via a shop subscription.  These private business sellers are not only receiving no-fee sales but many will also gaining their VAT being paid by eBay.  All fees paid by a non-VAT registered business seller has to pay an extra 20% VAT on their fees which is not recoverable.

A business trading as a private seller is not only breaking eBay rules but is also trading illegally under the UK Consumer Rights Act 2015.  eBay have been aware of this issue for years and rather than tackle the problem have, arguably, encouraged it.  They do not even have an effective way to report these sellers.

Please be assured that comments on this and associated threads is not directed at genuine private sellers.  In your particular circumstance, are you aware, that as a private seller you can add a further 300 listings free of any fees each month if your listings are on an automatic relist?  Whilst this may cause some inconvenience at the moment you should be able to build up your listing total at no cost over 3-4 months.

[cabletie555]

Thank you for the tip, the buy it now listings are good till cancelled so do automatically relist, and if I only used that format I could add 300 new ones per month. But for auctions, I relist these myself to so they finish at certain times and days which experience has shown might be more likely to result in a sale, or days when I am likely to have more time to package things. I was responding more to the subject in the initial post, illegal trading is another topic being discussed here alongside that.

[auctiongabble]

Business sellers should have a qty of free listings and reduced fees.  I quested ebays change with the CS and complete waste of time, them saying well private sellers have had free listings reduced from 1000 to 300.....you still give them free listings and now no fees! CAN EBAY NOT SEE THE PROBLEM.....

Im getting offers from people wanting upto 55% discounts, they just get blocked straight out.  It's ridiculous and with buyer mentality like this, no business will survive on here.

[mrob7487]

I think eBay could be about to face the consequences of their actions. The first thing I do when I log in is check the new listings from my saved sellers and 99% of the time around 50+ have new items to look at but ever since eBay made the 'fee free for private sellers' announcement that number has dropped significantly. Today only 9 sellers, out of 200, on my saved sellers list have new items listed. If it continues like this then eBay UK are going to find themselves in serious trouble.

[john8150_0]

I'd love to be proven wrong and undertake said task but I'll bare my backside in Durham Cathedral if this change spells anything other than disaster for sellers like me who obtain most stock from bricks and mortar auction houses.

I already compete with "private" sellers on here who outbid me in salerooms (very easy to ID some items/lots) and if they had to pay 3% sellers fees on the old 80% FVF discount and could outbid me they now have an even bigger advantage.

Sales are up and down like Katie Prices kecks as it is. I'm sorely tempted to send my entire stock to auction and see if I can survive the 4 years I need to wait until my old works pension kicks in. 

Ebay bleed me for around £1200/month in fees and in return all I get is an increase in "me not got my coin my friend" and ebay asking if I fancy shelling out to promote my listings so I can sell a few more for less profit whilst increasing theirs considerably.

When you factor in good old Royal Mail whcking whatever percentage they feel like on delivery charges every 6 months the future looks pretty bleak.

As a longer term business seller all I can compare the current situation to is the predicament the U-boat commanders found themselves in after the enigma machine was cracked. The Happy Times have gone and now you're frantically scooting around trying to find a sale and dodge a scammer like they sought targets and feared Destroyers...what was that about trying it in the German market?

[hudsonsclothes]

I must have joined eBay as a business seller at probably the worst time in it's history 🤣 about a month before all this carry on, now I find myself trying to build something up from nothing against these "private" sellers trying to compete price-wise factoring in the selling fees for myself against their listings with none. I was very enthusiastic when I started putting in all my spare time around working full time in the military its really demoralising tryong to find your feet and learn everything from scratch then having a massive hurdle thrown in your way. Gonna have to power on through and hope something changes in new year.

[Anonymous]

I think that business sellers who pose as private sellers are likely to be greedy and start listing a lot more in order to take advantage of the free fees.

That will make them stand out and they will be much easier to spot, report and force off the site unless they upgrade to business accounts.

With the new tax thing coming later this year, could eBay earn some good karma by passing the details of sellers like that on to the tax people?

[auctiongabble]

We will never no the triggar points / amounts on ebay system that will cause this data to be sent to HMRC, likewise we will never know whether what links there are with ebay and hmrc systems if any.

The whole £1700 amount from ebay is nonsense as it's not on any legal requirement set by HMRC.

There are alot of grey areas with what ebay say and what hmrc say, personally i go by hmrc site and not ebay.

HMRC just want any tax paid thats rightly due, they don't care about personal or business accounts on ebay.  There is no rule set out by hmrc saying  that self employed / sole traders must have business accounts, 

The £1700 a year or 30 items sold in a year is easily achievable and will create more work for both ebay and hmrc, someone will pay for it at the end of the day and as it appears ebay think the business sellers should be by giving private sellers free reign

[nutrafituk]

In addition to everything has been said so far here, ebay but not acting on those quasi-business sellers registered as private, they also deny their customer legal rights they would have had if purchased from a genuine business seller:

https://pages.ebay.co.uk/safetycentre/rights.html

Note that ebay are fully aware of those account practices, turnover, and stats so they do know whether they operate as actual business or not. In my opinion, it is just a matter of time when ebay will get hold responsible for turning a blind-eye.

[ett1954]

"The whole £1700 amount from ebay is nonsense as it's not on any legal requirement set by HMRC." - Correct however it is an OECD requirement under which the British government and the other 35 or so countries of the OECD have signed up to in order to track money trails connected with criminal activity from drugs, people trafficking, etc.  Obviously tax evasion is just one of those criminal activities.  Every country of the OECD will be following the same procedure and will work closely together so cross-border criminality can be identified.

"There is no rule set out by hmrc saying  that self employed / sole traders must have business accounts," - Correct again, but there is a legal requirement under the Consumer Rights Act 2015 for a business to provide certain information and have a compliant returns policy.  The former of these can only be done through an eBay business account. 

[ali402363]

100 items??? private sellers are only allowed to sell 30 items or upto £1500 a year

[pg_kicks]

Private sellers can sell as many and upto any value they wish, just if they have over those amounts you say then eBay are legally obliged to notify HMRC about it. HMRC may then send a letter asking if they are trading or just selling unwanted items and then the fun may begin.

[ali402363]

not true if you sell list to much ebey steps in, and ask you to open a business account or they will add restrictions  etc to your your account .

[pg_kicks]

What you posted was incorrect, there are accounts that have sold thousands of items and still private accounts, the figures you quoted at for online markets to give HMRC the figures, its not got anything to do with eBay and changing to business accounts. 

[the_book_seekers]

The figures you've quoted relate to the new OECD regulations that HMRC has signed up to. On line sites (ebay, amazon, vinted, etsy etc) are now required to send sales figures to HMRC when a person sells 30 items or hits 2000 euros (or the pound equivalent) in sales. HMRC has a seperate trading allowance of £1000 for business sellers. Genuine private sellers are not bound by these limits but may have to answer questions from HMRC if they have high sales. The tax private sellers may be caught by is capital gains tax if selling an item for more than £3000. There are exemptions  - at the moment - but watch the next budget as we have a money hungry government. 

[nutrafituk]

Precisely.