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eBay's Fee Structure and Final Value Fees

Tuesday, April 15 2008
fross_80
Frank Ross

Yesterday's post talked about eBay's fee structure change with respect to reduced insertion (listing) fees. The other side of eBay's fee structure change is the final value fee. The final value fee (FVF) is the part that eBay takes out when the item sells. The biggest change in those fees occurred for the first $25 of the final amount.

For that category, the FVF went from 5.25% to a whopping 8.75%! FVF for sales in the amount from $25 to $1000 went up only slightly (a quarter of a percent) and FVF for sales above that did not change. So obviously the biggest area of concern on the FVF increase is the portion for $25 or less.

Sellers whose average sales are in that low range are probably feeling this pinch the most. Sellers with average sales in higher price points will better be able to absorb this extra 3 and half percent. This is one reason to go with items that have higher price points on eBay. However, most sellers may have to look at their pricing structure if the margins are tight.

The biggest challenge with determining profit on eBay is that the seller doesn't always know what the ending price will be - at least in auction format listings. That means the seller should be aware of the average selling price of an item over several listings in order to determine when the item is profitable or not. If the seller is selling uniques, well that's a different story.

And if the items can be sold with "Buy It Now" or a reserved price, those prices should be adjusted to absorb the additional FVF.

What about you? How has the increased FVF affected your eBay business? Leave comments and share your ideas.

eBay Fee Table

Latest Comments in  posts

Meg Whitman made a bad deal or two when running Ebay. Now the sellers who built Ebay have to pay for it. With postage and all the other expenses associated with doing Ebay for small sellers this is what is going to be the straw that breaks the camel?s back and it may even break Ebay. Allot of people have left Ebay over the past year and thousands more are expected to leave this year. The upper level executives at Ebay failed Econ in college, or just never went. Ask them to draw a supply and demand curve or tell you what an equilibrium is and they would ask you, what?s that? The people who built Ebay the sellers will also be the ones who destroy Ebay. How you might ask, they will stop selling. Why because Ebay is no longer Ebay. It is now called fee bay a market place that acts like a parasite that sucks the life out of you until you are dead, but needs you to live. Check out my Ebay store at www.primeonly27.com while it is still around. I pay about $1 to $5 an add or more just to sell an item. If it does not sell I am out the $1 to $5 I paid for the add. If it sells then I pay 8.75% plus about 3% to pay pal then the tax man, the internet company, Intel to make me a Cpu, a web hosting service, the post office, and rent for some hole in the wall. The only people who will continue to do Ebay will be the thieves and people who have no business skills that can afford to pay someone to take their stuff away while wasting all their time programming the Ebay site with stuff that they bought in the 50?s or before and paid about nothing for the item hoping that someone still wants it and will pay them a few bucks so that they have gas to go to the post office with nothing left over. If you get a monthly government entitlements you can make Ebay work for you. All you need to do is pick up your entitlement check at the same time as you take your packages in once a month. Please don?t talk to bad or nasty about Ebay on their website go to a communist country and learn about state run media corp. In life if you get greedy you get burned, some people never learn. Ebay will get burned at the stake by their sellers if they keep their fee?s up and up. Ebay will go up in smoke, short term their stock may be a good buy before it goes bye bye. Amazon is a better trade. It is better to sell Ebay on a short sale. Meg Whitman is a _____ bag.
By: Frank on 4/30/08 at 2:27 AM
eBay's Fee Structure and Final Value Fees
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