eBays Rate Increase In Effect Today
Today, August 22nd is the day of the new eBay store listing increases. I am betting, that last night, you saw a heavy increase in listing traffic to get one month of listings at the old rate. eBay store owners staying up late to get all the new listings in place prior to the new rate increases, or increasing the cost of their merchandise in an attempt to absorb the rate increases. Will any stores shut down? Will we see a decrease in the store listings? Will we see prices driven up? Will buyers have smaller selections? The next 45 days will tell.Auction format is the fuel that moves the eBay machine. Auction format is what eBay started with. Auctions, and selection are what brings the shoppers to eBay. Shoppers jump in the auction in hopes of getting merchandise at a ridiculously low price. Store owners would often take a loss on an auction item as a strategy to promote their store listings. Relying on impulse buyers to use the buy it now button. This may no longer be a profitable strategy.Devina Mehra, a lead analyst at First Global Securities, wrote a note to clients in which she voiced support for the rate hike. “We believe eBay is moving in the right direction towards restoring its growth trajectory,” she said, as reported in a Seattle Times article.”Under the new fee structure, a $50 item sold through the store will generate $4.46 in fees for eBay, up from $3.27 before the change,” wrote Ben Charny, the author of the article. “Under the old rules, store items cost 27 percent less to list than auction items . . . . As of Tuesday, however, the difference will be just 3 percent.”eBay hopes to encourage high volume sellers to go back to the auction listing format, or, at least collect the full revenue no matter how the item is listed or sold.
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