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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: A basic eBay Store will now cost sellers $15.95 a month, a 60% increase from the current $9.95 a month. Closing commissions on most items sold through eBay Stores will increase by 50 percent. Gallery photo fees will increase from 25 to 35 cents. 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. 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: 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. Larger sellers may consider starting their own online store or sell elsewhere. 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. 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: A Ten Commandments Tablet Sells for More Than $5 Million at Auction The New York Times Rip and replace funds AND an auction: Happy New Year! Fierce Network Junior Caminero MLB Debut Patch Sells For $66,000 At Auction Baseball America Unclaimed treasures find new homes at Oklahoma auction KFOR Oklahoma City Shelby Cobra replica from “Bad Boys” heads to auction Motor Authority Sharing the Shared Rides Through Double Auctions – Lubar College of Business University of Wisconsin-Milwaukee The Most Expensive Diamond Jewelry Auctions of 2024 Only Natural Diamonds Selected Western livestock auctions Capital Press Christie’s Wine Department Final Auctions of the Season Achieved $2.6 Million wineindustryadvisor.com 9 of the Most Exceptional Jewels Sold at Auction in New York Galerie Magazine Ancient Ten Commandments tablet sells for $5 million at Sotheby's auction The Jerusalem Post 2010 Ford F-150 Lariat With 14K Miles Up For Auction Ford Authority Ken Paxton Hits the Brakes on Biden’s Plans for Border Wall Auctions The Dallas Express Pagani Huayra R for sale at RM Sotheby’s Paris auction in 2025 The Supercar Blog Stuttgart Rotary Club hosts record-breaking 74th Annual Radio Auction on Country 97.3 Stuttgart Daily Leader Longtime director of Starlight Auction honored North Fort Myers Neighbor Trump blasted Biden administration's auction of border wall surplus. Can sales be stopped? The Arizona Republic Last bids for 2024, please: collector car auction market in review Magneto magazine Romania declares winners of its wind, solar power CfD auctions Balkan Green Energy News Deal Dash: Historic Second Avenue building heads to auction next month The Business Journals The Auction of a Legend! The 1989 Ferrari F40 Fetches Millions queerfeed.com.br 2002 Lincoln Blackwood With 44K Miles Heading To Auction Ford Authority 2022 Cadillac XT4 Sits in Auction Yard, Full of Pink Marker Circles. What's Wrong With It? autoevolution With repeal measure rejected, WA carbon auction prices surge Washington State Standard Need a car lift, or a dozen of them? Contents of former Erie Toyota dealership to be sold GoErie.com GOP senator moves to block feds from disposing of border wall materials amid auction backlash Fox News Going Into Year 3 Without FCC Spectrum Auction Authority BroadbandBreakfast.com Arizona’s unused border wall materials were ordered to be pulled from auction site Washington Examiner Kaufman's office building at Gravity II in Franklinton appears to sell at auction The Business Journals Here's why the Biden administration is selling border wall materials The Arizona Republic Bob Dylan Instruments, Handwritten Lyrics, Photos, & More Going Up For Auction - Live for Live Music Bob Dylan Instruments, Handwritten Lyrics, Photos, & More Going Up For Auction Live for Live Music Gravity office auction: What the sale could mean for the Columbus office market The Business Journals GOP hysterics over border wall auction are actually hysterical | Opinion The Arizona Republic Ten Commandments tablet, said to be 1,500 years old, goes up for auction America: The Jesuit Review Brazil to add four more pre-salt areas to future oil auctions Upstream Online 1998 Ford Contour SVT With 36K Miles Up For Auction Ford Authority Ten Commandments tablet surpasses estimates at Sotheby’s despite authenticity questions Catholic News Agency |
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