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Is The eBay Fee Increase Actually Good For Business?
Fee Increase Leaves Some Sellers Angry, Others Thrilled Much of my email from readers this month concerned the recent announcement from eBay that it will increase many seller fees on February 18, 2005. Since many business people use eBay's online store system as their primary ecommerce point of sale, it's no surprise that most of the emails I received were of the angry variety. One email in particular caught my attention because it urged me to visit a website to sign an online petition protesting the fee hike. The email directed me to http://www.petitiononline.com/ebayfee/petition.html and upon further investigation I found that 22,548 digital signatures had already been collected (as of this writing). Thank goodness not all of them had my email address. This will be the fifth rate hike in as many years for the auction giant and should really come as no surprise. Price hikes are a normal course of business. It was the size of the hike that has many sellers upset. The rate hike involved the following fees: ˇ A basic eBay Store will now cost sellers $15.95 a month, a 60% increase from the current $9.95 a month. ˇ Closing commissions on most items sold through eBay Stores will increase by 50 percent. ˇ Gallery photo fees will increase from 25 to 35 cents. ˇ The Buy It Now fee will jump from a flat fee of 5 cents to 10 cents for items priced over $10 and 25 cents for items over $50. ˇ Final value fees will rise from 5.25% to 8%. Many of the emails I received pointed out that small sellers are making very little profit as it is so the increase in fees will only serve to drive these sellers completely out of the eBay business. Some sellers accuse eBay of purposefully trying to run them off, but I doubt that's the case. eBay has no reason to drive away the small sellers, but that realization never occurs to those who feel they are being priced out of the market. Not everyone is too concerned over the fee increase. Jim Cockrum, eBay Powerseller, publisher of "Creative eBay Selling News," the world's largest newsletter on creative eBay selling, and author of one of the best selling eBay books of all time "The Silent Sales Machines Hiding On eBay" has other opinions. "I don't see the eBay fee increase as a bad thing," Cockrum said in a phone interview. "I actually see it as just the opposite - it's a good thing because eBay is eliminating my competition for me. Who leaves eBay when eBay increases seller fees? It's not the customers (or shoppers). They don't go anywhere since they aren't affected. Only a handful of the weaker sellers leave eBay when fees go up." Cockrum recommends that sellers use eBay in non-traditional ways to build their online businesses so that future fee hikes will not have an affect on their e-business. "Selling on eBay continues to be one of the more popular ways to make money online, though very few people are getting rich with an eBay business alone," Cockrum said. "Many Powersellers don't make enough profit to cover their costs. The key to really making money with eBay is not in selling items at auction, but to use eBay to drive customers to your other online ventures. If you do that, the rate hikes do not affect your bottomline nearly as much." Not everyone shares Cockrum's enthusiasm. Many small sellers think the government or a regulatory board of some kind should get involved to help keep eBay fees in line. This probably won't come to pass anytime soon, but who knows. I can remember when a little company called Microsoft had free rein before they killed off all comers and came to monopolize their market. eBay seems to be headed in the same direction. The threat of regulation may be the reason eBay is now attempting to smooth the ruffled feathers of the miffed masses. eBay announced this week that they would give a one-time $15.95 credit to eBay store owners and reduce minimum listing fees for inexpensive items from 30 cents to 25 cents, effective immediately. Too little, too late? Could be. Many sellers believe that eBay may be writing its own obituary with such stringent price increases and such little thought for the smaller merchant. The online petition predicted the long term effects of the fee increase to be: ˇ Smaller sellers will stop selling on eBay and try to sell somewhere else online. They will never have the chance to expand themselves on eBay. ˇ Larger sellers may consider starting their own online store or sell elsewhere. ˇ Prices of auctions will increase. Buyers will turn back to retail stores. The idea of eBay is that you can find things cheaper there, even when adding shipping and handling together. ˇ Discourage new sellers, decreasing competition (which is what the eBay market thrives on for pricing). Only time will tell if the predictions come true, but for the short term many smaller sellers are closing down their eBay stores and moving up the street to Yahoo.com. Here's to your success! Tim Knox Small Business Q&A is written by veteran entrepreneurand syndicated columnist, Tim Knox.Tim's latest books include "Small Business Success Secrets"and "The 30 Day Blueprint For Success!"Related Links:http://www.smallbusinessqa.comhttp://www.dropshipwholesale.net
MORE RESOURCES: Long-Lost Klimt Painting Sells for $37 Million at Auction The New York Times Treasures From the Titanic Are Up for Auction, Exciting Collectors The New York Times Ukraine Auctions Off $200M Russian Yacht The Maritime Executive Womanâs car stolen twice, sold by police at auction WREG NewsChannel 3 BloodHorse MarketWatch: Classic Contenders at Auction BloodHorse.com Al Caponeâs pistol âSweetheartâ up for auction in Greenville Live 5 News WCSC Downtown Tucson high-rise building set to be auctioned Arizona Daily Star Friends of the Baxter County Library Auctions ongoing until Tuesday Mountain Home Observer Al Capone's Pistol Up for Auction Fox Carolina Chamberlain auction professional earns industry's top designation Tri-State Livestock News Real Estate Quarterly: Auctions On the Rise Los Angeles Business Journal Investors Flock to Two-Year U.S., German Bond Auctions but For Different Reasons The Wall Street Journal Portsmouth, NH moves to auction off three seized downtown properties Seacoastonline.com Sonja Morgan is auctioning her NYC townhouse after 11 years spent on and off the market New York Post A Castle Built for a Carnegie Will Sell at Auction Mansion Global âReal Housewives of New York Cityâ starâs Manhattan townhouse up for auction at $7.5M PIX11 New York News Pantera Buys Discounted SOL in FTX Auction Crypto Times Infamous Gangster Al Capone's Gun To Be Auctioned Daily Caller ViaBTC auctions 'epic sat' after mining Bitcoin's halving block and holding back rewards - The Block Portrait by Gustav Klimt sells for $32m at Vienna auction Al Jazeera English Twice the fun with Roncalli Pierside Auction Fox11online.com Al Capone's âSweetheartâ Colt .45 Pistol Announced for Auction by Richmond Auctions Chronicle-Tribune US unveils plan for up to 12 offshore wind auctions by 2028 Renewables Now Auction house opens for business in Utica The Central New York Business Journal Muhammad Aliâs former lawyer auctions off hundreds of items signed by âThe Greatestâ KTLA Los Angeles Stack's Bowers Galleries to Hold Islamic and Central Asian Focused Collectors Choice Online Auction Greysheet Daily News Al Capone's "Sweetheart" Colt .45 Pistol Announced for Auction by Richmond Auctions StreetInsider.com 2002 Ford Thunderbird With Just 54 Miles Up For Auction Ford Authority TAG to host annual Gala and Art Auction High Point Enterprise 46th Media Auction Magoffin County Rescue Squad Salyersville Independent John Lennonâs âHelp!â Guitar Headed to Auction After Spending the Last 50 Years in an Attic Rolling Stone U.S. Treasury auctions off $44 billion of the seven year notes at a high yield of 4.716% - ForexLive A lost guitar that belonged to John Lennon is going up for auction in NYC. Here's where to see it. CBS News Important Handwritten Issac Newton Manuscript on Alchemy to Auction Fine Books & Collections Magazine US sets plan for 12 offshore wind auctions over five years 1470 & 100.3 WMBD Long-lost portrait by Gustav Klimt fetches EUR 30 million at Viennese auction Prestige Online Malaysia âLovely girl â send anywhereâ â Princess Dianaâs first-ever job contract up for auction CNN Kentucky Fish and Wildlife spring auction set for May 6 - Kentucky Department of Fish & Wildlife Kentucky Fish and Wildlife Roncalli Pierside Auction turns 40 in 2024. It will be John Jagemann's last as emcee after 39 years. Herald Times Reporter A Buyerâs Guide to Wine Auctions SevenFifty Daily Britain Auction | World | hjnews.com The Herald Journal Britain Auction | World | hjnews.com The Herald Journal |
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