by John Cane

Created on: March 05, 2010   Last Updated: March 06, 2010

Since eBay burst onto the scene as an online auction site, it has slowly been morphing from everyone's garage sale into an e-commerce site for small business.  The advent of the fixed price listing has pushed this even further, but eBay is starting to push back.  On March 30, 2010, eBay will be changing its fee structure again.

Their stated goal for this change is to lower the up front costs of online selling. The unstated, but correctly assumed, flipside to this is that the back end costs will increase.

Below we will look what these changes are and how they will affect individuals, small business and eBay giants. If you just want the summary, skip to the bottom.

Perhaps the biggest change is the elimination of the e-bay store.  In April 2010, all eBay store items will be converted to fixed priced.  The fixed price insertion fee will drop from $0.35 to a scaled fee depending on your subscription. The new rate will be between $0.20 and $0.03 depending on how much cash you are willing to dump into a monthly fee.  While this is a decrease in upfront cost for fixed price listings, it is actually an increase for small store owners. 

Store owners on a $15/month subscription are currently listing items in their store at $0.03 - $0.05.  When these are converted to fixed price auctions their insertion costs will quadruple.   What this will mean for a lot of small vendors is the elimination of "lingering items"  A seller who leaves a specialty or rare item in their store all year knowing that they will only sell one if any that year may pull the item.  For example an item that is making $5 profit when sold can be left up all year for $0.60 under current plan.  Under the new plan it would cost $2.40 to leave it up all year, so it may not be worth the gamble to leave it up.  They could increase their price, but this would only decrease the likelihood of a sale. A third option would be to purchase a more expensive e-bay plan. The high end plan offers $0.03 listings but costs $300/month so you would have to be a eBay giant to make this profitable. Back end fees for fixed price auctions remain unchanged.

Auctions - This is what most small and personal sellers use especially for used items where the actual value is hard to determine.  E-bay has cut the up front fees a little which will save you a couple of cents per auction that doesn't sell,  but the back end fees have jumped significantly.  Items

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