Friday, February 01, 2008


Lose your CEO, and what happens?

Having just been in the news for a turnover at the top — Meg Whitman, eBay CEO for the last ten years and through its entire growth period, is leaving — eBay is changing its fees, in the U.S., at least. And they’re making a Big Deal about how they have “listened” to their customers by reducing insertion fees.

The insertion fee is the charge one incurs by listing something for sale, and the fee depends upon the asking price — the starting price, for items up for auction. The insertion fee for an auction item with a starting price of less than a dollar will go down from 20 cents to 15. Insertion fees for other starting-price ranges up to 25 dollars have also gone down by 5 cents, and by somewhat more for higher prices.

In compensation to eBay, though, they have raised their final-value fees. If your item sells, you pay them a percentage of what the item sold for, as a final-value fee. The fee will go up from 5.25% to 8.75% for the first 25 dollars of the final value. That’s quite an increase, which

  1. far outweighs the reduction in the insertion fee, and
  2. has a much greater impact on smaller-valued items.

Sample eBay fee changes.
 Starting PriceFinal PriceInsertion FeeFinal Value FeeTotal FeePercentage of SaleFee Increase

Look at the jump in the fee for an item that sells for $20! Yes, indeed, they’re listening....

Another change that I wonder about (this is from their page summarizing the changes):

Buyers will only be able to receive positive Feedback.
How does that serve as a benefit? It means that if a buyer isn’t communicative, is argumentative, delays paying his bill, makes false or unreasonable complaints, or the like... the sellers have no direct way to show their difficulties with him. I suppose they can still say negative things in the verbal part of the Feedback (why is this capitalized, anyway?), but they can’t mark it as “negative” so it shows up directly when people check.

And, just from a language point of view, there’s this:

Buyers will be held more accountable when sellers report an unpaid item or commit other policy violations.
Hmmmmm. I don’t think that’s quite what they meant. Though if I were a seller, I might like the buyer to be held accountable for my policy violations....


Ray said...

Ah, the magic of the "free market". Together, of course, with a healthy dose of sleight-of-hand and the knowledge that 99% of your victims won't bother to do the sums.

lidija said...

Maggie said...

I used to buy things on ebay from time to time, and I know my sister sells quite a lot of her used horsey stuff there very cheaply, but lately when I look on ebay I see a lot of people selling multiple copies of the same new item -- I assume they're businesses that also sell over ebay.

I like ebay as a sort of international yard sale, and having to wade through businesses selling new items annoys me to the point that I doubt I'll visit the site anymore. It's definitely transformed. We waste so much, and we consume so much, that I really like the idea of buying people's old stuff cheaply -- they get rid of it, and you get something you want, and it doesn't go to the land fill -- it's a win/win/win, as it is for my sister, getting rid of her horse items that she doesn't need any more (sadly, because one of her horses died).

And ebay just keeps raising their fees (and spinning it like they're lowering them -- I love it), so now it's just businesses making money off of other businesses now -- more of the same. No thanks.

Barry Leiba said...

Maggie: Yes, eBay is largely stores, these days, including things that look like "auctions" but are really stores. It's depressing. I've had very good experiences there with selling things, as you say, that I didn't want any more. But they've continually changed their rules with the effect of making things worse on the casual user who just wants to sell the occasional item.

As Lidija points out, there are alternatives. I haven't used Craig's List yet, but I peobably will. eBay was there first, but they've turned into something else.