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dear ebay, i might be lazy, but i ain’t stupid. how ebay’s less than transparent fee system is designed to hide the true cost of using their service

Monday, September 29, 2008
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ebay. oh ebay. once one of the mightiest dotcoms of them all. now, just a stupid company trying to fleece the punters.

ebay shafted everyone back in January with their new fee structure 1,2,3. But that’s old news.

Like it or not, ebay are providing a service which you are under no obligation to use and they are free to charge what the hell they like, if you want to use it.

That said, here’s my beef.

Fees = L(x) + S(y) + P(y+z)

I recently sold an item on ebay for £35. Yippee.

However, here is the bill:

Listing fees        0.88
Selling fees        2.88
PayPal fees         1.58
                   --------
                    5.34
                   --------

£5.34 commission on a sale of £35, that’s pretty steep at around 15%. But, I don’t really have a problem with that per se.

The problem is really the way that is it done.

The total fee of £5.34 is charged quite sneakily:

  • firstly, it is split into three small fees, so psychologically it doesn’t seem that bad
    total fees = listing fees + selling fees + paypal fees* .        

    *ebay OWN paypal

     

  • The final fee is NEVER mentioned in any correspondence. After you have sold an item you get an email saying “You’ve sold your item on eBay”, but there is no mention of the fees that you now owe them
     
  • Even within the newly redesigned “my ebay” they are not AT ALL upfront about selling fees and how much you have paid to them. This information – should you decide you want to know what you have paid them – is hidden away deep inside your account details (“my account -> my fees -> view recent fees”).

Transparent? No. Do they really think that no one notices these things?

Just be up-front

In the “selling totals widget” of your “my ebay” page, clearly intended to show you how much money you have made, you see:

but really, this should include how much you are paying in fees, the “final selling value” figure itself is systematically inaccurate, with a error margin of upto around 25%. It is an inflated value, which makes you think that you are making more money that you are. (hmmm, i wonder if that’s important to ebay?)

Take a minute and compare that with what happens before you sell something on amazon:

practise what you preach

But the thing that really made me laugh was this.

Firstly ebay don’t (cannot?) charge you fees on postage and packaging, i.e., if you sell an item for £10 and charge £20 P&P they only charge you fees on the £10 selling fee. ebay don’t want to allow this because anyone with half a brain would charge 1p for the item and put the true price in P&P thus saving themselves paying ebay commission fees (and costing ebay most of their revenue).

So, ebay has a policy against charging excessive shipping fees. The thing that made me laugh was this section, encouraging titled “Why does eBay have this policy?” which is obviously a lie and is really about them protecting their revenue stream (which is ok, but why the lie?).

This policy reduces the potential for confusion among bidders about the full cost of an item. Listings that include excessive P&P fees lead to a poor buying experience and unlevel the playing field by putting sellers who charge reasonable P&P charges at a disadvantage. These listings undermine the trust and legitimacy of eBay’s marketplace.

oh really.

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2 Comments leave one →
  1. mikenopolis permalink
    Monday, September 29, 2008 4:22 pm

    I’m not sure if the U.K. has an equivalent of Craigslist.org that we have in the U.S. But we can post items for sale there and wait for emails to come in. It’s free, but a little time consuming when local people wants to meet up to test out products.

    I just sold another $700USD worth of stuff…that’s another bag of money eBay/PayPal has stolen from me. But like you said, lazy people like me just keeps paying them for the convenience.

    eBay’s “auction” format does give sellers a false impression that the product has the potential of selling for a higher price. I would not be as mad if they were just up front about their fees…Percent on top of percent on top of percent. It’s like the US IRS taxing you on a daily basis when you are shopping, taxing you on your pay check, then at the end of the year, they tell you that you haven’t paid enough taxes demand you to pay again or else you go to jail!!!

    I’m paying 32% in income taxes right now…I refused a wage increase a few months ago because if I accepted it, I would be in the 49% tax bracket which means I’d really be making less than before. Whoever said there’s freedom in the U.S. is obviously not working or using eBay

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