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.