Back in February, eBay decided to raise fees for all auctions. They didn’t outright tell us they were raising fees, they left that to fancy tables with percentages. What eBay did do, however; was convey the image that eBay was lowering insertion fees attempting to blind us from the obvious final value fee increase. See my post from January for more background information on this controversy.

Beginning on September 16, 2008, eBay is raising fees in the same manner, yet again! They attempt to blind you by first telling you that insertion fees are being lowered to $.35 and $.15 (depending on the category), but they left out the fact that final value fees are rising in the email they sent out to all sellers today. Nowhere in the email notification does it tell you that final value fees are rising. You have to do some digging to get to the charts. Here they are below:

You’ll notice that these fee changes are different from the changes in the past.  While eBay has somewhat decreased the final value fees by .5% for some categories, most categories are having their fees hiked up.  For example, look at the last row in the second table.  From 3.5% to 9% for the initial $50.01- $1,000!  That’s more than a 200% increase!

To dig even deeper, let’s take a look at exactly how much this will impact sellers.  For example, say I sell a digital camera on eBay with a price of $500.  Under the current fee scheme, the fees would be:

50 * .0875 = 4.375

450 * .0375 = 16.875

Total = $21.25

Now, if we sell the same $500 camera, the fees under the new scheme would be:

50 * .08 = 4

450 * .045 = 20.25

Total = $24.25

That’s a $3 increase between the new and old fee scheme.  $3 may not sound like a lot, but over time it all adds up.  Not only does it all add up, it adds up in eBay’s favor.  Even though they are losing a maximum of ~$.38 (cents) per auction closing under $50, they are making up for it with all of the higher priced listings.  Not only that, eBay also gets a second cut of the pie from Paypal, which is owned by eBay.  After Paypal and eBay fees, you’re looking at almost a 10% overhead just for fees!  When will the madness stop?

It’s only sometime until Google comes out with their own auction site and hopefully it is soon.  They already have Google Checkout, so hopefully they’re well on their way.  For now, I’m sticking to Craigslist and local social networking sites to get my stuff sold.  That way, I get cash in my hand and don’t have to worry about the outrageous fees from Paypal and eBay!

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