Thursday, February 18, 2010

Now A Look At The New eBay Store Fees

Last month we took a look at the new eBay fees for auction style listings - that wasn't too much fun...

Now we take a look at the new eBay store fees. But before we do that, let's first get a look at what an eBay store owner currently pays in store fees:

Subscription Fees per Month
Basic$15.95
Premium$49.95
Anchor$299.95

Now the only differences is increased exposure - banner ads I guess - as you go up in price level. That and you get Seller Manager Pro with the Premium and Anchor stores. However, the insertion and final value fees are the same per store level and they are:

Insertion Fees per Item
Listing Price
Fee
$0.00 - $24.99$0.03
$25.00 - $199.99$0.05
$200.00 and above$0.10

Got that - now here are the current final value fees for eBay Stores

Store Final Value Fees
Price
Final Value Fee
$1.00 - $25.0012.00% of the closing price
$25.01 - $100.0012.00% of the initial $25.00 ($3.00), plus 8.00% of the remaining closing value balance
$100.01 - $1,000.0012.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the remaining closing value balance $100.01 – $1,000.00
Over $1,000.0112.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the initial $100.01 – $1,000.00 ($36.00), plus 2.00% of the remaining closing value balance ($1,000.01-closing value)

Believe it or not - the above is not all that confusing....(don't despair, examples coming up soon...)

Now the new fees.... First of all, the store subscription fees have not changed at all - still the same whether or not you are Basic, Premium or Anchor. But the insertion fees sure have:

New Insertion Fees per Item
Basic$0.20
Premium$0.05
Anchor$0.03

If you don't have a store, the insertion fees for fixed priced items is $0.50

Well, the Final Value fees are still no picnic.....

New Store Final Value Fees
Price
Final value fee
$0.01 – $50.0012.0% of the closing value
$50.01–$1,000.0012.0% of the initial $50.00, plus 6.0% of the remaining closing value balance ($50.01–$1,000.00)
Equal to or over $1,000.0112.0% of the initial $50.00, plus 6.0% of the next $50.01– $1,000.00, plus 2% of the remaining to closing value balance ($1,000.01–closing value)

Ok, so what's the deal? Well.....it depends on how much you sell and how much carries over - i.e. if your item doesn't sell then it carries over to the next month. Remember, you are charged insertion fees for every item that does not sell on a monthly basis if you use GTC (Good Til Closing) items and just about all stores do it that way.

So if you have a Basic Store and you have around 100 items in inventory at $20.00 a piece, you will pay $15.95 + $0.20 per item so you are out $35.95 before selling your first item. Under the old system, you would be out $15.95 + $0.03 an item or $17.45 - Now if you sell 50 of those $20.00 items, your final value fee does not change. However, say you have 50 items that didn't sell so you are going to be charged $10.00 worth of insertion fees the very next month if they are GTC items. The bottom line is that if you have a small inventory and you don't turn it over regularly, you are going to be out a ton of cash over a year's time. The insertion fees will eat you up. You better have your stuff priced right - that's for sure

Here's the final breakdown:

Old System: 50 items sold at $20 per item = $1000.00 gross - ($0.03 per item listing fee = $1.50 + 12% x $20.00 x $1000 for the final value fee) - $15.95 Monthly Subscription Fee - $1.50 for 50 items carry over at $0.03 per item = Adjusted Gross Profit

$1000.00 - $1.50  - $120 - $15.95 - 1.50 = $861.05 Gross Profit not including cost of goods sold so if you bought the goods at 50% of retail (Yeah, we know you collector types would get better margins than that but for the sake of argument...), then the Net Profit would be $861.05 - $500.00 = $361.05 - not so hot but lets see what it would be under the new system.

New System: Still 50 items sold at $20.00 per item = $1000.00 grosss - ($0.20 per item listing fee = $10.00 + 12% x $1000 gross for the final value fee - $15.95 Monthly Subscription Fee - $10.00 for 50 items carry over at $0.20 per item = Adjusted Gross Profit

$1000.00 - $10.00 - $120.00 - $15.95 - 10.00 = $844.05 or $344.05 Net Profit so it costs you $17.00

I won't go through the example but if you are an Anchor Store that sell a thousand items a month that are worth $1000 each, but a) your insertion fees and store subscription fees did not change but b) your final value fees did increase.

Oh nevermind, let's do an example.....

Under the old system, if you listed a 1000 items at $1000.00 each and sold them all, you would be charged the following for Final Value Fees:

Old Fee System: 1000 items @ $1000.00 ea. x $51.00 per item or $51,000 out of a gross of $1,000,000

New Fee System: 1000 items @ $1000.00 ea. x $63.00 per item or $63,000 out of a gross of $1,000,000

So if you are a big fat anchor store, your insertion fees didn't change but you are paying an extra $12,000 for every $1,000,0000 sold under this example.

Now eBay has thrown a few bones in there by saying that fixed priced items will enjoy full search exposure - remains to be seen how all that works out.

The bottom line is that you better watch what the heck you are doing. Study the fee changes carefully and see how they will affect you.

What are we doing at Walkin' Willie's Comix? Well if you don't have a store, you are permitted up to 100 free (i.e. no insertion fee) listings a month if you start them at $0.99 or less. Almost all of our auctions start at $0.99 and - except for event tickets - usually end at less $25.00 so we really won't see much change. We use eBay to help us market our other two websites - http://www.wwillie.com/ for trades and CGC books and http://www.walkinwilliescomix.com/ for discount comic books. When someone wins one of our auctions, we are permitted to contact them once after the sale to tell them things like your "payment was received" or "your item shipped" - things like that. And we also include links and descriptions of our other two websites.

A recent example: One customer from California won one of our auction items on eBay and it went for around $5.00 - we then sent him our "Your Item Has Shipped" e-mail. Well, that customer has since placed a $75.00 order and a $45.00 order from our discount site. Gotta love that....

So here is the REAL bottom line: We used to use eBay as a primary sales channel but now - because of the skyrocketing fees - we use eBay as a way to attract customers to our other websites.

We still love eBay - we just love eBay on OUR terms now.
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