Six Ways From Sunday: How eBay Is Screwing SellersPosted on by Tiffany Spatz (Cobanerd)
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Whether you buy or sell on eBay, you've probably seen some of the auction site's many enthusiastic notices about the 2011 Spring Seller Update. If you're a seller that's totally disregarded said notices, then you might get a rude awakening from the big changes that rolled in on April 19. That's because eBay is gearing up to screw you...again. Below are the biggest new and ongoing ways that eBay is sticking it to their sellers.
The "Unprotected Screw": No Negative Feedback for Buyers
One of eBay sellers' oldest gripes is the inability to give bad buyers negative feedback. The site removed the option back in 2008 as part of their amped up Buyer Protection measures. At the time, eBay North America President Bill Cobb explained that retaliatory feedback from angry sellers was making buyers "afraid."
With no protection for the sellers, the one-sided feedback system has become vulnerable to buyer-initiated blackmail. Several seller complaint sites and petitions have cropped up as a result, but to no avail (as evidenced by the new Seller Performance Standards mentioned below).
The "Getting Pimped Out By eBay": Store Subscriptions
While eBay cheerfully assures sellers that an eBay Store subscription will make their fees "lower than they are today," a more in-depth Fee Illustrator than the one provided by the site suggests otherwise. To add insult to injury, in anticipation of increased store subscriptions, eBay has also increased the basic monthly rate from $9.95 to $15.95.
Plugging my own rather puny seller statistics into the fee illustrator shows that eBay will be earning 16.19% more from my sales after the fee changes if I remain a non-subscription seller and 11.61% more even if I do subscribe. The kicker? It will still cost me $3 less per month to be a non-store member because of the low volume of my sales. In other words, if you're a casual seller then they're going after your back end either way.
The "Tantric Screw": Increasing Final Value Fees
While the current 9% commission rate won't change this month, eBay will now be calculating final value fees based on the combined total of the selling price and shipping. eBay's rationale for this fun little update is that it will encourage sellers to reduce their shipping rates. Obviously USPS, UPS, and FedEx won't be reducing their rates to compensate. In fact, I had a little chat with my postman today (also an eBayer), and it was his opinion that this new policy is only going to encourage sellers to pad their shipping charges even more to offset eBay's steeper commission. After all, who's really going to reduce their shipping costs by $5 just to save $.45 in fees?
And that's just the foreplay! As soon as eBay can be sure that sellers will
submit to accept this new formula, they'll start raising the fees assessed on items in certain categories. Starting in July, you can subscribe to a store to keep your final value fees at 7.5%, but then you'll be paying listing fees again. Non-store sellers will now get 50 free listings every month, but not subscribing could mean final value fees of as high as 13%. Oh yeah, and they're also going to increase the cap on the final value fee charged per item from $50 to $100.
The "(No) Money Shot": Seller Performance Standards
The seller performance standards sound good in theory, especially if you're an eBay seller that's also an eBay buyer, but a closer look at the standards should make some sellers leery. eBay's got some pretty high expectations when it comes to their beloved five-star rating system, and now not meeting those expectations could result in account limitations or even a selling suspension. All sellers know that some paranoid buyers are a little too trigger-happy when it comes to their use of the Resolution Center, cracking open a case any time a box is a day past estimated delivery or even if their new pants make their ass look big.
Unfortunately, even if a courteous eBay seller quickly and effectively remedies the situation - be it with the appropriate tracking information or a rapid refund - eBay will now count these incidences against the seller. Three open cases in one year, regardless of how they are resolved, will put you Below Standard, which could result in eBay holding payments for anywhere from 3 to 21 days. Small-time sellers, regardless of their feedback rating or resolution history, will be similarly limited if their account is less than 90 days old, they've sold fewer than 25 items, or they've sold less than $250 in merchandise.
The "Gang Bang" (aka PayPal)
Let's not forget that once eBay has thoroughly turned you out, they're going to double dip and hit you again if you take your payment through PayPal (which they own). While PayPal's fees will not be affected by the Spring Seller Update, potential eBay users that are calculating the cost of selling on the site should remember to tack on at least another 3% in fees if they plan to use PayPal.