I read a great article on eBay’s shipping fees and feedback at this blog.   

As we have just opened an eBay store to add another sales channel for UpStart Batteries, eBay’s policy changes have a direct impact on us.  It is interesting to me to watch ebay dick around with their product in ways that ultimately damage their company without fixing the problems they are trying to resolve.

There are three reasons that sellers charge 1 cent for the product and $10 for shipping.  One is the final value fees.  Ebay could easily fix this by lumping all receipts from the buyer together and charging final value fees on that.

Another factor is that ebay stupidly charges higher fees for higher initial value prices.  A related third issue is that ebay will recharge the fees (after one free second attempt) to relist the item.

Combine these three issues and there is a clear economic incentive for sellers to give the “product” away and offer expensive shipping.    The net is that in a competitive category, it can be extremely expensive for sellers to keep listing a high cost item.  Furthermore, in a highly competitive space, such as batteries, it is not uncommon for product not to sell.  Some of our products are selling very well on eBay, and others do not.  For those that sell more slowly, I am especially  motivated to control costs and ensure that listing prices don’t get out of control.

I am hoping eBay will experience a significant change in corporate culture now that Meg is gone.  So far, though, it doesn’t look good.  eBay’s success depends upon buyers and sellers.  If they let the equation get too far out of balance, too many sellers of unique merchandise will disappear… leaving only the dollar store junk that fills the site now. 

In spite of our good sales to date, the margins are nowhere near what I would like.  Perhaps it was a mistake to open a “Tiffany’s” store in a flea market.

If eBay thinks that sellers are “avoiding” fees, then they should make the fees balanced and reasonable.  They might discover that sellers are happy - even grateful - to pay them.

Recommendations:  combine final value and shipping charges and take a cut of the total.  That gives us sellers the right to experiment as we see fit without being penalized or crammed into a specific business model.  Secondly, charge a flat rate to list a new auction.  This rate could be different by catagory, if necessary, but remove the disincentive to skew price vs shipping.  They should also drop fees for scheduling auctions.  10 cents each is pretty rich when you think that we might run 9000 listings a month.  Autiva doesn’t charge $900.  They do it for free. 

Instead of treating us sellers like we are “lucky” that eBay exists, the company should treat us as the valued partners we are.  Good luck.