EBay Users Angry Over Fee Change

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Irate eBay (EBAY) users are slamming the giant auctioneer's recent fee change, saying it will drive up costs for many of the site's sellers.

Last week, eBay declared that sellers will be able to list up to 100 items every month for free -- as long as those items have a starting bid of 99 cents or lower. But many sellers claim that the change will result ultimately in higher fees to the company as eBay tries to wring more profit out of each sale.EBay will now take 9% of the final sale price, but no more than $50. Previously, the company had taken 8.75% of the sale price up to $20, and then 3.75% beyond that. As a result, while eBay is accurate in saying that "upfront" costs for sellers are going down, eBay is taking more on the back end, and many users aren't happy about it.

"Ebay just put me out of business and I didn't even get a good start at it," a user named littlemisskw wrote on eBay's community forum. "Store has been open for 2 1/2 months. I am done . . . Shame on you Ebay for screwing all your sellers. I hope everybody closes their store." The user was one among many pledging to stop doing business on the auction and retail site.

Many users said selling items in the $50 - $500 range could result in a fee increase of up to 200% thanks to the new policies.

EBay Acknowledges Fee Hike For Some

An eBay representative acknowledged that some users would be hurt be the new fee structure.

"There are cases in which this new fee structure is actually more expensive than what they were paying before," Todd Lutwak, eBay's senior director of seller experience, told CNET, "but the fact is, what (the sellers) asked us for is they want the lower risk associated with lower fees on the front end, and that they were willing to pay the final fees."

Many eBay sellers seem to disagree. "Using the Ebay fee calculator for the new rates, I took my average monthly sales in 2009 and figured up how much the cost would be with the new rates," wrote a user named remembrancesofil. "It will cost me over $6,000 in fees which does not even include Paypal fees. That is a 800% increase from what I paid in 2009. If you are a serious Ebay seller, you need to run the numbers; you will be shocked and appalled."

This is only the latest fee change eBay has implemented as it tries to wring more profit out of each sale. Users have expressed frustration that every time they get comfortable with a pricing strategy, the company changes the rules. The new fees begin on March 30, 2010.

"EBay is driving small sellers to either set up a storefront in which they pay a monthly subscription fee, or list in the auction format," Ina Steiner, an eBay expert at AuctionBytes.com, wrote in an email. "While there are advantages to eBay in doing this, some low-volume sellers in certain product categories will be adversely affected."
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