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Ebay Puts Another Nail In Their Own Coffin

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Ebay Auction.jpegFirst off, this is not going to be a whine fest about ebay, or feebay as some call it. I want to tell you about their newest, and most covert yet, attempt to increase their revenue while repeating their mantra "The change is to benefit the ebay users." Here is an exact quote from the ebay spring newsletter:

We know that online buyers pay attention to the total cost of an item--including shipping--when deciding what and where to buy. That's why, to encourage low-cost shipping, starting July 6 Final Value Fee rates for Store sellers--Fixed Price and Auction-style--will be reduced and then applied to the total amount of the sale--including shipping.

Read More Here: eBay Fee Changes Hit Auction Sellers Hard

What will happen now is that the fee you pay ebay when you sell an item will also be applied to the shipping cost as well. For example, if you sell an item for $20 and shipping is $10 you will now pay an additional $1 (10% of the shipping) for having the extreme privilege of selling on ebay. Ebay claims they are trying to get sellers to lower or even eliminate the shipping charged for each item they sell. If you're a buyer, this sounds like a awesome idea. What's better than free shipping right? Well, it's not going to be that simple.

So now, ebay sellers have 2 choices. Leave their shipping cost the same and pay an additional 10% or sell their items with "Free Shipping". If they don't sell their items with free shipping, their listings will be pushed to the bottom of the page as ebay gives preference to listings that have free shipping. They will sell less due to decreased visibility and when they do sell it will cost them more -- ebay Profits and Sellers lose money. And if sellers absorb the cost of shipping and list their items with free shipping -- ebay Profits (free shipping sells more items) and Sellers lose money.

But I think something else will happen. I sell on ebay and I will certainly not be absorbing any shipping costs. So after much consideration, the only solution I can come up with is to raise the price of my items the amount of the shipping cost and sell the item as "Free Shipping". But here's the problem. Shipping cost varies depending on the distance an item is shipped. So an item shipped from the West Coast to the East Coast would cost more than an item shipped from the West Coast to the middle of the U.S.

So what I have to do is add the highest possible shipping charge to all of my items. The net cost will rise for all buyers with those who would normally pay the least for shipping (those closest to me) will now be paying the highest shipping rate. Now add to this the fact that I can't use this method on international sales. The shipping cost for international orders is to high to add into the price of the item. So for international shipping, I have to add an additional handling charge to make up for the extra fees I will be paying on the shipping.

Now I'm not saying I have decided upon the best way to deal with ebay's newest fees but after 3 years of increasing fees, I can't come up with an alternative that will make selling on ebay worth the trouble. So what happens when all sellers on ebay either leave because they can't make a profit or raise their prices so high that it's cheaper to shop on Amazon? Ironically, shoppers will flock to Amazon.... the exact company ebay is trying emulate.



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