Friday, February 04, 2005

Ebay's Unquenchable Thirst

I've used Ebay plenty in the past and I still use it to sell my old stuff that I don't want any more. Usually that old junk consists of cds, dvds, books, video games, and comic books. None of them are very big ticket items. Most of the time the final bid on my items, assuming they sell, is around a dollar or two. With the increases to all of their ebay store fees, I got to thinking about how much money I actually make, and how much many sellers actually make via selling through ebay.

So let's say I list an item at $0.99. Ebay charges $0.30 for listing my item ($0.99 is the highest price you can start an auction at for the $0.30 fee).

Now let's say that my item ends and sells at $0.99. Ebay charges a 5.25% final value fee, which comes to be $0.05 (even though I'm thinking it's probabyl $0.06 since my guess is they round up).

So, right off the top Ebay gets $0.35, which is 35% of your sale. Now let's say you accept payment through paypal, an Ebay subsidiary. Paypal charges 2.9% of the amount accepted plus a $.30 transaction fee. So if you charged $3 for shipping on top of the $0.99 your item sold for, you end up paying Paypal $0.43.

So, if you combine the Paypal and Ebay fees, you are footing a $0.78 bill for your $0.99 item. Assuming you didn't overcharge for shipping, you're only making $0.21 on your item. Ebay gets 78% of your profit while you're left with 22%.

That amazes me and irritates me all at the same time. I don't accept Paypal because of the associated fees. This at times, scares buyers away because they want a quick, easy sale. Sometimes my items don't sell so I'm stuck absorbing the $0.30 listing fee of other items in the items that sold. Honestly, Ebay is a terrible rip-off, and I'm sure they know it, and I'm sure most seller know it, but what is anyone to do about it?

Really, what can anyone do? There is really no viable alternative to Ebay. Yahoo auctions are a decent deal, but not enough people use it so many of the items that I list to sell won't. For some things I could put them in an Amazon store or on, but with both of those cases I'm stuck holding on to my items indefinitely while I wait for someone to stuble upon my copy of an item and buy it. There are no other auction sites that are even moderately popular online outside of Ebay and Yahoo.

It's because of this lack of competition that Ebay can jack sellers and get away with it. Sellers have no other choice than to pay the fees in order to sell all their crap because they can't very well move to another online auction house because there isn't one where they could sell enough stuff to make it by.

In conclusion, Ebay sucks donkey nuts and I wish I didn't have to use them at all, but I do, and it sucks.

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