Coming to eBay in June: 5 Free Insertion Fees Every 30 Days

11 Permanent link to UPDATED: 5 Free Insertion Fees Every 30 Days UPDATED: 5 Free Insertion Fees Every 30 Days

FEATURED POSTRichard Brewer-Hay / Tuesday, May 12th, 2009

UPDATED: 5 Free Insertion Fees Every 30 Days

UPDATED 6/16/09
eBay announced the official launch of this program earlier today. The program is obviously targeted at the more casual online seller, inviting them to sell with no upfront risk and only having to pay a fee if the item sells. You can find out more info HERE.

The announcement also included a snapshot of eBay’s top U.S. selling markets, along with each region’s top-selling product categories:

Top U.S. Selling Markets (May 2009)
Market Top-Selling Product Categories
1. Los Angeles/Long Beach Cell Phones & PDAs; Clothing Shoes & Accessories
2. New York Cell Phones & PDAs; Clothing Shoes & Accessories
3. Chicago Clothing, Shoes & Accessories; Collectibles
4. Orange County, Calif. Cell Phones & PDAs; Clothing Shoes & Accessories
5. Philadelphia Clothing, Shoes & Accessories; Collectibles
6. Detroit Clothing, Shoes & Accessories; eBay Motors – Parts & Accessories
7. Riverside/San Bernardino, Calif. Clothing, Shoes & Accessories; Collectibles
8. Nassau-Suffolk, N.Y. Clothing, Shoes & Accessories; Collectibles
9. Dallas Cell Phones & PDAs; Clothing Shoes & Accessories
10. Washington, D.C. Clothing, Shoes & Accessories; Collectibles
11. Boston Clothing, Shoes & Accessories; Collectibles
12. Houston Clothing, Shoes & Accessories; eBay Motors – Parts & Accessories
13. Portland, Ore./Vancouver, Wash. Books; Clothing, Shoes & Accessories
14. Seattle/Bellevue/Everett Clothing, Shoes & Accessories; Collectibles
15. Oakland, Calif. Clothing, Shoes & Accessories; Computers & Networking
16. Denver Books; Clothing, Shoes & Accessories
17. Fort Lauderdale, Fla. Cell Phones & PDAs; Clothing Shoes & Accessories
18. Cleveland, Ohio Clothing, Shoes & Accessories; Collectibles
19. Miami Clothing, Shoes & Accessories; Collectibles
20. San Jose, Calif. Clothing, Shoes & Accessories; Computers & Networking

Original Post 5/12/09
Dinesh Lathi, VP of Seller Experience, has made an AB post this morning announcing a change in pricing on eBay.com including zero insertion fees. Starting on June 16 of this year, every 30 days, a seller’s first 5 Auction-style listings will have no Insertion Fees when they list with eBay’s Sell Your Item form or Simple Listing form – regardless of the start price.

The Final Value Fee for the 5 zero insertion fee listings will be 8.75% of the sales price or $20, whichever is lower.

From the AB post:

Choose the option that works best for you, based on how you list:
• eBay’s Sell Your Item form or Simple listing form – If you’re currently using one of these forms, you can either take advantage of the 5 free Insertion Fees every 30 days, or opt out by listing your items via an eBay tool or third-party listing solution.
• eBay tool or third-party listing solution – If you’re currently using one of these tools, you can either take advantage of this new pricing structure by listing your first 5 Auction-style listings every 30 days through eBay’s Sell Your Item form or Simple listing form, or continue with your current practices at the current pricing.

For a full list of FAQs regarding this announcement, please click here.

In addition to http://www.ebay.com, these changes will also apply to http://www.ebay.ca, http://www.cafr.ebay.ca and http://www.ebaymotors.com (Parts & Accessories only).

Cheers,
RBH
More

TheBrewsNews / May 12th, 2009 at 11:41 am

I suppose this is eBay’s attempt to offer something to appease the casual or small sellers. However, I don’t see this as good news and here is why:

1. The free insertion fee comes with an 8.75% final value fee which is only a “good deal” for sellers who are offering something with a final value of about $500 or more. For a value of $0-$25, there would be no difference in the final value fees paid.

For a value of $25-$500, sellers will actually pay MORE with this new “free” insertion fee rate. So, free listings are, for most sellers, a fee INCREASE unless your items sell for less than $25 or more than $500.

And, on eBay’s Radio show today, Griff stated that the only way for sellers to “opt out” is to use Turbo Lister or some 3rd party service like Channel Advisor or Auctiva. So, for sellers who do not use a 3rd party service or Turbo Lister, most will see an increase in their total fees for the first 5 auctions every month.

2. This free insertion fee, with the different final value fee, just adds more complexity in a fee schedule that is already confusing and too complex.

3. As usual, eBay is trying to come up with an “easy fix” because coming up with real solutions to fix the underlying problems is actually hard work.

But eBay’s free insertion fees offer (although actually the total price paid will be greater for most sellers) does nothing to address the many underlying problems that new and casual sellers face. For example, most casual sellers aren’t initially aware of the PayPal 21-day Hold Policy because eBay and PayPal are not proactive in informing and educating sellers. Also, casual sellers are more likely to be targets of buyer abuse because they are not as knowledgeable about policies and also because the threat of one poor rating has a huge effect on a casual seller’s account. For example, many casual sellers are not aware that they must obtain signature confirmation for shipments valued over $250.

It is true that all sellers, including casual sellers, bear ultimate responsibility for becoming informed about a marketplace’s rules and policies. However, if eBay truly wants to embrace casual sellers and wants the variety of unique items that these smaller sellers have to offer then they need to take a more proactive role in nurturing these small sellers. Offering free insertion fees with higher final value fees, for a higher total selling cost, just isn’t going to achieve the objective. Well, unless the objective is to rid the eBay site of small sellers in which case this new offer of free insertion fees and higher final value fees just might do the trick!

Bob / May 13th, 2009 at 5:59 am

I got the email announcment above from ebay about their “exciting Seller news”. It is more like outrageous news for a small seller like me. In effect: With the new 8.75 percent FVFees across the board they have raised FVFees 5 PERCENT on the first 5 items I list every month that sell for $45 or more. I will be looking into using a third party listing tool.

Henrietta / May 13th, 2009 at 10:11 pm

On the 30 day cycle I think this is yet another example of ‘the decider’ not knowing how the site works or what the consequences of a particular course of action will be. How much simpler would it have been to tie the promotion into a calender month?

** An answer to this would be really nice RBH! Presumably there is an excellent reason for choosing 30 days other than just because this is what FP30 uses and a familiar time span.

The professional seller is not going to waste the time to list five items using a clunky webform to get a rebate varying from $1.75 to $5 in the *sweet zone (items likely to sell under $44 or over $451 which would net a savings of 10c) My packer gets paid $8 an hour, my time is worth more.

The ones who are going to get caught by this are the newbies and casual sellers who might have an item of the type which used to be prevalent on the old eBay, the good stuff.

To creatively disrupt eBay out of the auction marketplace may well be the desired goal of management, if not, they sure have an odd way of showing the love and appreciation.

Richard Brewer-Hay / May 14th, 2009 at 1:00 pm

All,
Thanks for the comments and questions. I did ask around here and got the following feedback to share with you. Hope this helps.
Cheers,
RBH

We believe that this new fee structure with no upfront fees will encourage occasional sellers to sell their hard-to-find items on eBay. They will only pay fees if their item sells, and most of these sellers will save on overall fees.

We understand that some sellers could see an overall fee increase under this new structure if their items sell. However, sellers who do not wish to take advantage of this new fee structure can opt-out by listing items via an eBay tool (such as Selling Manager or TurboLister) or a 3rd party listing tool. Sellers should choose the option that works best for them.

With regard to the 30 day decision (over calendar):

We did not want large spikes of inventory coming onto the site on the first or second of any month. Instead by the rolling 30-day approach, since everyone’s day counter varies individually from when they make that first listing on of after 6/16, it is intended to spread out the inventory on the site, which should benefit all sellers.

TheBrewsNews / May 14th, 2009 at 3:10 pm

Richard, perhaps you could ask what data was used to base the decision on to offer these free listings. The statement “We believe that this new fee structure…” says only that WE BELIEVE. It would make sense that eBay would have same data upon which they based their decision. Perhaps eBay surveyed casual sellers who left the site and found out why they were no longer selling or perhaps eBay surveyed interested people who had not yet tried selling on eBay. As far as I know, eBay has not surveyed casual sellers to find out why they are not listing.

If it were not possible to survey the casual sellers directly (due to time constraints or being unable to locate the subjects directly), then I would assume eBay would have surveyed those people who directly deal with the casual sellers and would have knowledge about casual sellers — you know, eBay Education Specialists. As far as I know, eBay has not surveyed their education specialists.

Now, I realize that I am only ONE eBay education specialist but I can most definitely assure you that the casual sellers I have worked with do not see the insertion fees as cost prohibitive. Having to pay insertion fees is pretty low on the list as far as reasons why the casual sellers I have worked with are not currently listing. That is why it is so interesting to me to learn that eBay “believes” by waiving insertion fees on 5 listings that it will cause these casual sellers sitting on the sidelines to jump in and list. And I guess that eBay’s assumption is that these casual sellers will be able to list and sell successfully just because the insertion fees are free.

Think about this for a minute: any casual seller who tried selling and then stopped selling because of having to pay the insertion fees… well, the REASON they stopped selling is because they were not successful in selling their items NOT because they had to pay fees to list. Perhaps they didn’t have good quality pictures, they didn’t have good descriptions, and they definitely didn’t have good enough titles to be found. Perhaps they violated a policy unknowingly and were afraid to try listing again. Or perhaps they lost money with a PayPal dispute because they didn’t get signature confirmation on a $300 order. So, does making the insertion fees free mean that these casual sellers will list? Possible but doubtful. Yet, even if the are enticed to list for FREE, they will not have any better chance of SELLING their items just because the insertion fees are free. Now, who would keep listing every month (even for free) if they ultimately cannot sell their items?

This offer of 5 free insertion fees, but with increased final value fees, really appears desperate and poorly thought out. Of course, this is just what I BELIEVE.

Michael Ripley / May 16th, 2009 at 11:16 am

I got out a nice little group of items I had been putting off to take advantage of the “free” listing. Then I read all the rules as I know Ebay is good at hiding what the truth is. The final fees where the kicker. All my items would sell for around 100$ Well I put them on Craigslist. Which is “free” No strings attached. 2 have sold already and I have interest that may lead to the other 3 selling. No packing,no lost item disput, just a local meet and a cash exchange. Done.Thanks but no thanks to your “free” listing.

Candy / May 17th, 2009 at 10:32 pm

Casual sellers are not listing because they are not being treated well. I know that for a fact because I am one of those casual sellers. I don’t need the stress of dealing with Ebay’s policies and idiosynchrosies, especially for the small bit of profit I realize out of it. So…I list elsewhere where it truly is free to list with a reasonable FVF. Any seller who has been selling “casually” for awhile knows this. I’m sure after awhile Ebay will realize this will not get the small seller back again. They need to do a great deal more…first on the list would be to stop automatically treating all sellers as though they’re doing something wrong. The majority of us are good, honest people.

kenneth french / May 18th, 2009 at 2:33 am

well when you are cramming PayPal only down sellers throats what more can you expect? Mr. Donahoe went ahead and did what he wanted,just like when you warn a child not to touch something of value in a antique shop but goes ahead and touches it and breaks it,someone has to pay for it don’t they?

Marc / May 18th, 2009 at 11:19 pm

I am one one of the casual sellers that no longer lists on ebay. For me personally, ebay has became too complicated. With working full time and trying to run a household, I don’t have time to educate myself on the constant changes going on at ebay. Ebay is great until you get burned on a Paypal dispute because you didn’t read and study every detail in fine print (that they make impossible to find of course) and then you quit because you realize it is not worth the money and hassle. It really is as simple as that.

RR / May 31st, 2009 at 10:49 am

Soooo…if you’re one of those sellers that will be hurt by this new setup then can’t you get around it by just listing 5 auctions starting at a penny with a high shipping charge for something worthless around your house that won’t sell, then start listings 6-x for what you really want to list?

Alex Haynes / March 4th, 2010 at 2:45 pm

We dumb consumers all need to realize that eBay, like most all other business enterprises, has a prime goal of maximizing net profits, and if attaining that goal means customer satisfaction has to take a back seat, then so be it. So, the next time you hear some company claiming “Customer satisfaction is our number one priority,” file it under baloney.

Apparently eBay has concluded that net profit can be increased by charging comissions of about 22% on a $10, sale, and gradually reducing them to about 7% on a $1000 sale. These commissions are based on the sum of the charges by eBay and PayPal – after all, they are the same company. (All of my calculations were made using one of the many free eBay transaction calculators freely available on the web).

Further, eBay seems to have concluded that by increasing the net commissions on sales in the $30 to $500 range through a “free insertion” offer, a corresponding increase in net profits will be realized by the company. For example, the free insertion option will produce about $9 more profit for eBay on a $200 sale than the standard option.

eBay also seems to have made a judgement that most sellers are not sophisticated enough to figure out that the free insertion option should be avoided in the $30 to $500 selling range. However, eBay says it is possible to opt out of the free insertion gimmick by listing items via eBay tools such as Selling Manager or TurboLister.

I would hope that all sellers opt out of the free insertion offer, and show eBay we are not as dumb as they think.

UPDATED: 5 Free Insertion Fees Every 30 Days