EBay plan to add fees for buyers - hurts businesses even further

[vintagefunk01]

From the sky news article here which is obviously a press release https://news.sky.com/story/ebay-selling-fees-are-scrapped-to-boost-to-reselling-13225638

It seems clear ebay is following in the footsteps of other selling marketplaces by adding fees for buyers in the early new year,  but since fees remain in place for business sellers adding another fee on top of this is another hit to our bottom line.

We will now be expected to absorb the buyers fee and our own business selling fee (and shop fees etc).

This seems crazy to me - although eBay say it'll be 'small' , if it's 8% like elsewhere that's a massive hit for us to take.  Yes it's for the buyers but we all know prices will drop because of it - for example a 350 item will now cost 379 to the buyer with an 8% fee that is currently used by another platform, so ofc sellers will drop the initial price so that the item actually sells and to offset this.

Fine for private sellers who have no fees to compensate, but insane for business sellers with hefty fvf and shop fees already 

[valueaddedresource]

@vintagefunk01 sellers are right to be skeptical/cynical in my opinion.

I don't know if you've followed what has been going on with Mercari in the US but their experiment with shifting fees to buyers has not gone well - to the point where they laid off ~45% of their US staff a few months later with the US CEO even saying in an internal memo that the fee change had "not yet delivered the short-term results that we had hoped for on the buyer / GMV side."

Obviously there are a lot of differences between Mercari and eBay but fundamentally, I believe eBay buyers are just as much if not more likely than Mercari buyers to balk at such a significant change to how shopping on this platform "works."

At the very least I think it's safe to say if eBay believed buyers would have an overwhelmingly positive reaction to the prospect of paying fees directly, they would have included it more prominently in all the press releases, interviews and big media push rather than bury it in an SEC disclosure likely only to be noticed by investors and financial media.

[amphibolous]

It would have made more sense for eBay to offer 30 free listings a month to private sellers (that's one item a day, which ought to be more than enough), and a reduced FVF, instead of finding ways to claw back more money by this proposal to charge buyers!

I know we live in a chaotic, topsy turvy world of late, where it seems all thinks crazy are presented as the new normal, but this move is pretty insane, even by eBay's standards! As someone who does buy from eBay on occasion, this would completely turn me off, out of principal alone.

[cooksongold]

This is similar to what Vinted do right?

Could it be that ebay will only levy this buyers fee on orders from Personal Accounts though? Without knowing more, I would say you can't get concerned about it yet.

[stormatic2015]

If it is a split in fees, so for the example given. We pay FVF and listing fees but the buyer pays the transaction fee for example. Then that wouldnt matter anyway because the price will still be the same for me. Either way if its a £5 item and I worked my profit as say £1 and thats the lowest I go, then if they remove fees Why am I going to lower my price? Only way is if compertition does and I stop selling them. But I wouldnt go below the £1 profit I had set, so if i did take out the transaction fees call it 50p. the sale price would be £4.50 but buyer pays 50p so its still £5.

eBay dont profit here as they are still getting the same fees, which now as im typing wouldnt make sense for them to split that. But it does  make sense for them to complicate a system which doesnt need to be.

Unless they plan to increase transaction fee for example and this is their way to say ... here you go sellers we did something for you. as its the buyers who get increased not you and then ebay increases its profit that way. But then alienates all the buyers which totally negates their actions today.

[behind.the.cellar.door]

So part of this is aligning with other platforms (nominally the market competition to ebay) and the way they charge fees to buyers. If sellers have been migrating from ebay to these other apps (or never signing up to ebay in the first place) then you can see why that alignment might make sense.

There are another two facets to this that seem relevant.

25 years ago, ebay and amazon were competing with the high street as the underdogs. The online shopping sites comprehensively won that battle (amazon especially). High street shopping is now dreary at best. The advantages have fallen to online shopping in a way that means ebay (or Vinted, Reverb etc.) are able to ask more and more from both buyers and sellers in terms of fees paid - simply because the brick and mortar alternatives either don't exist anymore or are vastly inferior to an online platform. Obviously, some of the newer apps managed to be a more attractive option than ebay for selling due to low or no fees, which explains why ebay has responded in the way it has.

The other interesting aspect is why fees will be applied to buyers (and removed, or significantly reduced, for selling). I suspect this might have more to do with wanting to disincentivise buyers on the whole without wanting to punish small private sellers: in other words, to limit buying purely to sell without hurting someone buying to get rid of a used/unwanted item for some cash instead of throwing it away. Private buying and selling of second hand goods generally doesn't add anything to the economy. It doesn't produce value, it isn't taxed. It's understandable why govts would look at this as potentially problematic - state and govt services still need to be paid for with revenue. At the same time, disallowing private sales of unwanted goods (e.g. old clothing, basic household goods) would be needlessly punitive on people who have become used to selling on ebay for up to the last 25 years. If those sales could be the difference between putting the heating on or not, it would be incredibly cruel to remove the national (and even international) marketplace that is ebay from small private sellers. But on the whole, I suspect this is a way of disincentivising a type of buying and selling on ebay and moving towards a different kind (the buyer now absorbs more of the responsibility where, previously, all the risk has been with the seller). Whenever there is alignment like this across nominally competitive businesses, it usually means there's agreement from the very top between public and private entities.

I suspect an additional concern has to do with topics already mentioned: fraud, identity, and digital currencies. It sounds like many of these new policies are designed to address these.

[lucy_farmer]

'............The advantages have fallen to online shopping in a way that means ebay (or Vinted, Reverb etc.) are able to ask more and more from both buyers and sellers in terms of fees paid - simply because the brick and mortar alternatives either don't exist anymore or are vastly inferior to an online platform.  .............'

Ah, rather in the way that Uber hope to undercut taxi services until they've all gone under (the way the high street shopping is going) then once Uber are the only option, they'll put prices up and finally make a profit...

[signs_and_vintage]

Round our way there is no meaningful Uber coverage (and had a bad experience the one time I used it), meanwhile the taxi service has sacked Maureen and all requests go via a 'universal' overseas call centre. They have zero local knowledge and cannot cope with e.g. two Station Roads in the area or the three train stations we have, if you don't have a postcode ready. When my partner booked a taxi that never turned up, there was simply no record of the booking, and virtually no way of seeing what went wrong - who knows which dynamic call centre and pooled operator mistook the booking. Progress, aint it brilliant?

[moldosgifts]

Same principle at the auction house, both buyer and seller pay a % for the sale. 

Wait for the announcment to draw any conclision, unless its as wooly as the free to sell for private .

[theelench]

I've related on here that the two small electric items I looked for on ebay I eventually bought at the local supermarket because they were cheaper.   Because of ebays high fees to businesses (?)

I did buy an out of season diary, also more than I paid for an identical one a few months earlier, even when the seller sent me an offer reducing their price.

That leaves a couple of items I bought for my collection, so I'm not what you'd call a big shopper on ebay !

Would I pay a monthly subscription to buy 3 items in a year?  I don't think so.

Would I pay a buyers fee to buy something that's probably already over-priced (because of high fees) ?  Again I don't think so, unless it's something very special for my collection.

I genuinely can't see any good coming from ebay trying to get fees out of buyers unless it reduces fees to business sellers to help them be competitive.  Trying to keep all their current fees from businesses and adding any fee to the buyer just makes ebay look even more uncompetitive.

[robbtyke132010]

Please read the post properly...

[medealady]

Isnt this like the River's Prime or hiking shipping charges to cover fees? One reason I rarely use it unless desperate then use a family member with an account to get it. The ebay model has obviously changed from the old auction regime and as a buyer the platform is swamped by 'overseas' sellers all offering the same. What has gone under the radar however is a certain site selling the same oriental stock at a fraction of the price with free shipping over £15 and delivery around a week or so not the 3+ weeks on ebay.  It isnt in profit as yet but is aiming at hitting Rivers bottom line and in turn ebay. Orders of 15 items with an average cost of £1.70 each and this includes clothing, bags and gadgets this cant last long. The site should however make ebay et al sit up and take notice. We all know we live in a 'made in China' world  but why would ebay punish their buyers with fees when going elsewhere is so simpleand much cheaper?

[behind.the.cellar.door]

Yes, exactly that.

[4_bathrooms]

Calling it a "buyer-facing fee" suggests it is a fee charged per transaction rather than some sort of subscription model for buyers. That makes me wonder whether business sellers' FVFs will be based on the total paid by the buyer including the "buyer-facing fee".

An interesting observation is this will only apply to eBay UK. I say interesting because eBay UK is rarely the guinea pig for something eBay plans to roll out across other eBay sites. 

[behind.the.cellar.door]

Yes, that's almost certainly what it will be, in line with similar apps/websites that charge the buyer a fee based on sale price. Subscription charges may well come later down the line.

[pg_kicks]

Sorry I stole your picture and posted in the weekly chat, I just wanted to highlight it to the ebay community team and make sure eBay knew their communications were terrible.

[signs_and_vintage]

eBay - "Everybody hates us, we don't care"

[valueaddedresource]

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@pg_kicks wrote:

Sorry I stole your picture and posted in the weekly chat, I just wanted to highlight it to the ebay community team and make sure eBay knew their communications were terrible.

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@pg_kicks  no need to apologize - it's publicly available info via eBay's SEC filings...I just added a little highlighting. 😂

[vinylscot]

I would imagine there will be all sorts of get-outs for the big sellers upon which eBay depends heavily now.

Why should I pay an extra fee to buy an item from eBay, when I can buy it without the additional surcharge, direct from the seller's website (or on the high street)? Expect larger sellers to be awarded a "badge" indicating there is no buyer's fee to be paid in their transactions.

Taking that one step further, I would expect a buyers' fee to hit BIN listings far harder than auctions. At least an auction has an uncertain end price, so a buyer may be more likely to accept he has to pay a little more. (So perhaps BINs may have a fee of 3% and auctions, say 7%?)

If any B&M (or simply non-eBay based) retailers are watching, this is the time to sort out your advertising and marketing to cash in when you can offer your wares without this extra charge.

eBay must be relying on their ongoing market dominance in some sectors to be enough to see them through this.

[switch-it-on]

Ebay have never innovated. They copy and follow and always have.

[tr3asurep0rium]

Amazon has Amazon Prime. And you can choose to sign up for it, or not. That's entirely up to the buyer. I think this is the model they've rolled out in eBay Australia and soon will roll out here too. Makes perfect sense. If buyers will get the new subscription model or not, let us see.