eBay has announced that they are changing the final value fees structure for their women’s bags and handbags category. What is interesting about this announcement is that at first glance it looks like a straight fee increase, but when you dive a little deeper you can see more about the direction eBay is heading.
In the tables released by eBay, you can see how the way that fees were calculated is changing completely.
The new fee structure for nonstore or starter store sellers rather simply means that if you are selling a handbag up to a value of $2000 you will be charged at a rate of 15% rather than 12.5%. However, if you are selling a handbag at a value of over $2000 your FvF rate will be just 9%.
If you have a basic, premium, anchor, or enterprise store then the fee for handbags up to a value of $2000 will be 13% up from 11.5% and if you are selling a handbag of value over $2000 the FvF will be down to 7%.
eBay shared some examples of what this might mean for sellers that fall in the different categories.
Example—final value fee percentages for a $1,500 handbag transaction
- For this transaction (including tax and shipping), a Basic and above Store seller will pay $195.30 in final value fees, which is an increase of $22.50. In this example, the final value fee as a percentage of the total transaction amount is 13%.
Example—final value fee percentages for a $3,000 handbag transaction
- For this transaction (including tax and shipping), a Basic and above Store seller will pay $210.30 in final value fees, which is a savings of -$89.25. In this example, the final value fee as a percentage of the total transaction amount is 7%.
eBay Prioritising Luxury Handbags and Higher Value Transactions
A few weeks ago we covered the eBay Q2 earnings call where Jamie Iannone made a clear point about how eBay was actively being more selective about the types of buyers they were trying to attract. This was after it became apparent that eBay had lost all of the new buyers it had gained over the previous year.
This move from eBay could be looked at in two ways. The first is that the fee increase is to help cover the costs of the eBay Authenticity service which is now available to all handbags valued at $500 or more. Whilst providing this service ‘for free’ we, of course, know there are absolutely costs involved with running this service.
Secondly, is this eBay playing the long game and trying to pivot slowly away from the old moniker of garage sale auction house to actually being the go-to place for luxury items. In the eBay announcement, they even led with the sentence “eBay is on a multi-year journey to create the world’s premier destination for authentic luxury handbags.”
Fee increases are never good news for sellers, and with these changes, it is the vast number of sellers not selling luxury items that are going to be hit hardest, whilst those handfuls of luxury sellers will end up paying fewer fees.
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