eBay makes fundamental changes – enough?

Massive changes today announced for eBay’s economic model, in response, I take, to the increasing power of Amazon and Google.

  • Listing fees down 25 to 50%, especially for bigger sellers

  • Gallery is free

  • final value fees (commissions) are up – 8.25% under $25, which is up from 5.25% and huge. Most sales are in this range, and it forms part of the commison for sales greater than $25. For the next range, $25 to $1000, commission rises from 3.25% to 3.5% – a very big increase in revenue terms for eBay. (US figures)

  • Big sellers that have high buyer feedback ratios get 5 to 15% commission fee discount.

Those four changes take apart the existing economic model and put it back together. Reducing listing fees increases items listed (Trade me already has zero listing fees).

Zero Gallery cost means every item can have a photo displayed in search, and this will natualy increase sell through rate anyway.

Final value fees are where the bulk of revenue should come from – after all when you’ve just sold something you are more likely to understand the value of paying a fee. Increasing these can make eBay a fortune, and they have covered concerns of big sellers (who look hard at these fees) by offering discounts.

These changes aim, therefore, at increasing listing numbers, sell through rates and final value fees. I’d expect eBay are anticipating a decent overall lift in revenue from this.

They have also played with the feedback system:

  • Sellers can’t make negative  comments about buyers

  • Buyers that are suspended/kicked out have their negative comments removed

  • Time to write feedback reduced to 60 days from 90

  • Sellers can block certain members  from buying

  • Order in search results is adjusted for buyer feedback ratio

  • Feedback percentages will include repeat buyers –  currently only one from each unique buyer counts.

Overall this helps big sellers (they don’t leave negative feedback anyway) and should makes eBay a friendlier place – i.e. a higher positive/negative feedback ratio. Again, these are fundamental changes to a foundation of eBay’s success.

Overall? Send as much money as you can to the USA and buy eBay stock. It is stupidly low right now, they have a globaly diversified income stream and these changes should do it well.

Published by Lance Wiggs


3 replies on “eBay makes fundamental changes – enough?”

  1. I think the changes are good, and I’m probably one of the few people who would prefer it if Trademe charged listing fees. The reason for this, is that it would get rid of a lot of the crap that is currently listed on Trademe and it would also encourage sellers not to put on high reserves. I also think that $1 reserves should have zero fees to encourage sellers to use this feature.


  2. Well, what will make the eBay stock go back up? Are people not buying from eBay Sellers because they are worried they will get a negative feedback or is it the depressed overall economy making people cautious. I think people are tired of the Scams. I seriously doubt that these new rules promote more honest communication. Allowing only customers to leave negative feedback is not going to cure this problem. Buyer and Sellers are often the same person. I know these changes have caused a lot of concern for the bigger sellers as well. If you get time I invite you to check out my auctiva store and eBay auctions. Prices are low, Items are Fabulous. Thanks and have a great week.


  3. Seller fees good – Negative feedback for sellers? Bad

    It’s not that the sellers are retalliating – it’s that they are trying to nuetralize their feedback score. If a buyer leaves a BS negative feedback for an Item that the seller has sold a Ka-gillion times never having a neg on that item then the seller leaves neg too. The reason is because the customer will get upset and the chances of a mutual feedback with-drawal are greater for both parties. This expells the negs. It’s the logical way to resolve the negative feedback. Hope I made sense of the mess.


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