posted on January 18, 2005 02:12:09 PM newAfter the eBay Fee increases does it cost more to sell an item on the eBay Store than on auction?
Let us see:
We have Meg’s Shop a hypothetical eBay store that on the average it contains about 200 items. This number of items is larger than the typical eBay store. If you have fewer items, this direct cost fee will be higher, if you only have 100 items, it would be $0.16 per month.
Under the new fee structure $15.95 per month, it costs on direct costs
to list $15.95 / 200 = $0.08
The listing fees for this item are still $0.02 listing fee for 30 days and
$0.01 Gallery, total listing fee $0.03
We have selected a hypothetical item selling for $49.99 at the store,
The FVF will be: $25.00 x 0.08 = $2.00 and the balance ($24.99 x 02.75
= $0.69, total FVF fee $2.69
Total fees eBay Store to sell $49.99 item $2.80
That is assuming that the item will sell on the first 30 days of listing at the eBay store, unfortunately that has not being our experience. If not you may need to add at least $0.11 per month for each month you keep the item listed, or $0.19, if you have only 100 items listed on the store.
Same item sold at eBay auction:
Listing fee $1.20
FVF Fee is: $25.0 x 0.0525 = $ $1.31 and the balance ($24.99 x 0.0275
= $0.78, total FVF fee for this item at auction $1.09
Total fees eBay Auction to sell $49.99 item $2.29
This assumes that the item is sold the first time is listed and there are no for pay options used.
To sell Meg’s hypothetical item at her eBay Store, it cost $2.80 and at auction $2.29, that is 22.3% more to sell that hypothetical item through the eBay Store.
On February 17, 2005 what will Meg do? She would cancel all her store listings, it just does not make economic sense to list there and pay a 22.3% premium for her eBay Store listings not to appear on the eBay search. It looks to me that eBay just killed the eBay Store listings format.
Let us see how many store remain open after the 17th of February. When eBay realize their mistake, the heads of many eBay MBA that made these calculations and recommendations will roll. . . What a blander!
As I said before on my previous analysis, this fee increase will be revenue negative to eBay and consequently the price of their stock will fall. Here again there is the opportunity to make some money, by selling eBay stock short. Behind every dark cloud there is always light and opportunity, if only one bothers to look.
As my friend the old economics professor wrote, "only eBay can defeat eBay, it seems that they are going a good job dismantling eBay."
[ edited by usmarines on Jan 18, 2005 02:16 PM ]
posted on January 18, 2005 02:21:29 PM new
What it seems that you have not figured into your calculations is that it is only more expensive to sell the item in the store if the item is over $25 or if it is an item that absolutely will sell on the first listing. I believe that in a former threadyou stated that the sell thru rate dictates that the average item sells on the fourth listing therefore it would be much less to sell the item thru your store as opposed to in an auction.
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
posted on January 18, 2005 02:48:06 PM new
Dear Fenix03:
You are absolutely right, that is assuming that the item on the eBay store sell the first month is listed and at the auction the first time is listed.
On my previous posting, the Sales Thru Rate I used was 29% which reflected at that time the latest Sale Thru Rate as indicated by Medvet.
As I have said before, on the average it takes about 3.45 listings to sell an item at auction and that is the larger part of the hidden fee increase on our case over 16%.
I have seen items at eBay Store that remain there for a year or more, before they are sold. I too, have many items that took months and month to sell. You go and figure the additional fees.
Let us analyze again Meg's store while she sell a $24.99 item:
We have Meg’s Shop a hypothetical eBay store that on the average it contains about 200 items. This number of items is larger than the typical eBay store. If you have fewer items, this direct cost fee will be higher, if you only have 100 items, it would be $0.16 per month.
Under the new fee structure $15.95 per month, it costs on direct costs
to list $15.95 / 200 = $0.08
The listing fees for this item are still $0.02 listing fee for 30 days and
$0.01 Gallery, total listing fee $0.03
We have selected a hypothetical item selling for $24.99 at the store,
The FVF will be: $24.99 x 0.08 = $2.00, total FVF fee $2.00
Total fees eBay Store to sell $24.99 item $2.11
That is assuming that the item will sell on the first 30 days of listing at the eBay store, unfortunately that has not being our experience. If not you may need to add at least $0.11 per month for each month you keep the item listed, or $0.19, if you have only 100 items listed on the store.
Same item sold at eBay auction:
Listing fee $0.60
FVF Fee is: $24.99 x 0.0525 = $1.31, total FVF fee for this item at auction $1.31
Total fees eBay Auction to sell $24.99 item $1.91
This assumes that the item is sold the first time is listed and there are no for pay options used, unfortunately that has not being our experience.
To sell Meg’s hypothetical item at her eBay Store, it cost $2.11 and at auction $1.91, that is 10.5% more to sell that hypothetical item through the eBay Store. You are paying a 10.5% premium for your eBay Store listings not to appear on the eBay search.
posted on January 18, 2005 02:52:02 PM new
You didn't mention the sellers who carrying a large quantity of the same item. I can list 1000 of the same item for $.03. If I sell one dog for $30, I have paid my store fees for the month.
On some of the items I may sell 100 in a month. The listing fee was $.03. If I had listed that item as fixed price the fee would have been $3.85 or 100 times on auction the fees would have been $65. I have tried listing this item as fixed price and they didn't sell as well as they do out of the store. So, my choice is between $.03 and $65.
I think I will keep my store. Every seller will have to break down their seller fees based on what they sell.
Be kind. Everyone is fighting their own secret battles.
...Author Unknown
[ edited by Gtootie on Jan 18, 2005 03:03 PM ]
posted on January 18, 2005 02:59:03 PM new
Some of us have ebay stores with many more than 200 items. Mine has about 4500 items - making the 15.99 store fee cost about a third of a cent/month.
Let's say I keep an item in my store for a YEAR with gallery before I sell it - total cost to list $.40. Let's just say my average store sale is $10 making me pay .80 FVF when the item is sold. TOtal fees to sell item in store: $1.20.
At auction I have a 30% sell through rate - meaning on average I would have to list 3 items for every one that sells or for continuity sake lets say that I list this item 3 x's on ebay before it sells: Listing fee= $1.05 FVF .53 Total fees to sell at auction = $1.68.
The ebay store is still the best way for me to sell but, as you pointed out. not for everyone.
**********************************
"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting "...holy sh@#...what a ride!"
posted on January 18, 2005 03:24:56 PM new
Right Neglus, it totally depends. I am approaching 4000 items and will probably be up to 5000 in the next few months, the monthly increase per item is negligible. I don't use gallery, so my listing fees are the same. It is the FVF which I am not thrilled about, but I can live with that increase. I am more concerned that the next raise will make the store not profitable for me, by raising the listing fee per item, or adding a GTC fee which for me is the same thing. The more I look at it, opening up a yahoo store is starting to make sense - Not right now because I will keep my ebay inventory full, but when the next increase comes around I believe I will be priced out of the ebay store market with my current business plan. If it goes up to 5 or 10 cents, I would probably keep a couple of hundred items on ebay, and move the rest to a different platform. We'll see, the sky isn't falling, but I will be prepared when it does.
posted on January 18, 2005 03:32:46 PM new
I agree ebayvet and Tom - this rate hike was not nearly as bad as a listing fee hike would be. I guess I will have to scamble when and if it happens cuz I don't see where I will find the time to explore new possibliites much less transfer everything over. My plate is about as full as it can be right now.
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"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting "...holy sh@#...what a ride!"
posted on January 18, 2005 03:35:18 PM new
I majored in English and minored in sit-ins LOL I was just down the road from you, Tom in Aurora NY
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"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting "...holy sh@#...what a ride!"
posted on January 18, 2005 03:41:12 PM new
Dear Gtootie EbayVet and Neglus:
If you are fortunate enough to have a Sale Thru Rate of 10% at your eBay Store, count yourself among the lucky ones. You are not the average eBay seller!
What you need is to calculate the Sale Thru Rate at your eBay store. Total eBay Store listing for the month / eBay Store items sold that month.
Whatever type of merchandises your sell, it must be hot! We wish you all the luck in the world that it continues.
We sell coins which is one of the highest Sale Thru Rate among all types of items sold on eBay, and still does not make economic sense to for us, to pay a premium for not having our eBay store items appear on the eBay search.
As I point out on my previous posting, the fee increase on our eBay stores is negligible on our case 0.52%, however the hidden fee due to the low Sales Thru Rate was an increase of 16%.
Every situation is different, and our analysis heavily emphasizes our experience as coin dealers selling very few items under $25.00; most of our items are over $25.00 and under $1,000.00. See our prior posting Analysis of the proposed price increases http://www.vendio.com/mesg/read.html?num=2&thread=595559&id=595642
Also coins have an establish wholesale value and are almost liquid.
EbayVet, you have the right idea, be prepared for the next round of price increases, because they are coming, since the fee increases this time, will have a negative effect on eBay revenues.
We are redesigning and expanding our website, modeling after one ot the busiest coin websites. Up to now, the bulk of our business was wholesale and dealer to dealer sales.
On our website, we will be using dynamic pages powered by Apache Server, MySql, PHP and Perl, all open source software that does not cost us anything. Our two website have 2 GB storage and 30 GB bandwidth each. It is not difficult to program any of that software.
posted on January 18, 2005 03:43:54 PM new
Marine: Why do I have to have a sell through rate of 10%/month in my ebay store?
I am always adding new items - in the procass of moving my unsolds from the quase-FLD to the store boosting numbers from 3800 to 4800. I guess I average about a 8% sell through when I run auctions to draw buyers into store.
Comparing stores like yours to mine is like apples to oranges though. I only have 1 item priced over $25.00 and postcards are NOT a liquid asset!!
**********************************
At good ole Hardly Normal, I took up Space! After graduating in the upper 99% of my class, I discovered the splendor of UPSTATE NY (=SNOW+SNOW+THRUWAY CLOSED+SNOW+SNOW+THRUWAY CLOSED...) at SYRACUSE, where I majored in BEER and minored in TEAR-GAS AVOIDANCE...
VISIT: Ralphie's Eclectic Garden of Earthly Delights & Swedish Marital Aids here: http://tinyurl.com/3rd5a
posted on January 18, 2005 03:58:17 PM new
Tom - I raised a glass or two (or siz pack) myself in those days. I specialized in shooting beers but that's another story.
After two years of merriment in NY the 'rents closed the purse strings and brought me home to MN (where there was no less snow but drinking age was 21 )
**********************************
"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting "...holy sh@#...what a ride!"
posted on January 18, 2005 07:21:39 PM new
Very interesting. As expected everyone has a different approach and business model. In my case I have shut down, and I will spend a few months figuring my best approach when I begin selling again. It is obvious to me that the higher your profit/item the less impact an auction's cost or store cost has on the bottom line. I still prefer to sell at auction since I average an additional 25-35% profit through the bidding wars. Stores for me are a fire sale venue for items that don't sell. Unless new items are added sell through rate decreases over time and at some point the store venue becomes unprofitable. eBays new fees are driving us toward that unprofitable point. Some are already there and others are getting close. I hope Yahoo gets serious and offers more favorable pricing. Why else are they hanging around and not pushing things ???
LOL I was just down the road from you, Tom in Aurora NY
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