eBay Raised Final Value Fees After Touting “Lowest Fees in the Game”

Source: Selling fees

In the post below, I show a picture from eBay’s promotion of their “Lowest Fees in the Game” strategy. At the time my goal was to see if eBay or StockX was generating more revenue from their fee structure. What I found was that eBay was earning more income on sales under 100 even with the “lowest fees” because under 100 dollars eBay’s final value fees were 12.9%. Which somewhat made eBay’s “lowest fees” claim a bit of misdirection. In the post I used my reports to show that most sales, even in resale, take place under 100, so eBay didn’t really lose by making fees for sales over 100 dollars 8%.

Does eBay Really Have the Best Fees in the Game? How Shipping Shapes Sneaker Resale

While I was justifying that eBay wasn’t hurting themselves, I also understood that the second tier of sales happened between 100-150 dollars. I haven’t crunched my data since January. When I did those reports, my numbers still showed that most sales were taking place under 100. In the update on eBay’s new fees, the company delivered interesting information on their sales. They stated that most of the sales on eBay landed above the second tier of 100-150, and they were not raising fees there. Is this misdirection? Possibly. Especially when you understand the variety of ways sneaker resale data can be broken down. Let’s come back to this point. When I analyzed fees to find which company was profiting most, I found eBay to be the victor. Understanding that one set of data does not give a developed image, I followed the article above with a report on “year over year” sales for eBay looking at the keyword “sneakers” for an entire month. Using my micro-set of data and tools found within eBay’s system I determined that resale was broken. I wrote the article below in April as a response to declining resale numbers. In the post I wrote a response to my prediction that eBay would show a considerable decrease in sales:

The Year Over Year Month Update April 2021 compared to April 2022

I predicted the decline would be 18% at its worst for my research on the keyword “sneakers” I never imagined I’d be so wrong. Any loss year over year is bad, but to utilize the same research keyword and find sales decreased -25.96% should place eBay Sneakers in an active state of finding a way to correct the declines across the board.

Sneaker Resale is Broken: A Year over Year look at a Month on eBay is Astonishing

It seems that correction has arrived. Today eBay announced an new adjustment to their fee structure:

Final value fee increase for sneakers sales between $100 and $150

Effective October 10th, 2022, sneakers sold in men’s or women’s athletic shoes categories will be subject to the following fee changes:

• Sneakers sold for less than $100, or sneakers sold for $150 or more, which account for the vast majority of sneakers sold on eBay, will not be impacted. The final value fee for sneakers sold between $100 and $150 will increase to 12.9% for sellers without a Basic Store subscription or above, and the final value fee for sellers with a Basic Store or above subscription will increase to 12%.
• As part of this change, items listed for under $150 may be subject to insertion fees if the seller has used up their monthly zero insertion fee allotment. 
• The new $14.95 flat rate shipping fee for buyers will not be subject to final value fees. The total amount of the sale for Authenticated items includes the item price, sales tax, and other applicable fees.

Announcements should always be read with a bit of skepticism. Copy is written in a manner that benefits the company, not the consumer. eBay should have approached this matter different than they have. The decision to cloak the announcement in what appears to be misdirection, instead of stating in clear definitive language what was changing, is no longer the way to go for businesses looking to build meaningful relationships with consumers. Let’s break down the e-mail after taking a look at a chart from my micro-set of data from September of 2021 and January of 2022. I chose these two charts to establish one fact, the pricepoints from 1-150 are almost always the most popular price points in resale. The only time it isn’t is when Jordan Retro and Yeezy products are the primary source of the data keywords used. Which could be the case since many resellers use eBay because they make more money on Retros and Yeezy on eBay than they do on StockX:

1. Expanding Authenticity Guarantee. Making more sneakers eligible for authentication. 

What This Means? Nothing, it’s just good copy meant to confuse the reader by adding unnecessary information.

2. Streamlined selling. Keeping shipping costs low by providing a free shipping label to sellers and managing shipping for them. 

What This Means? eBay will now pay for shipping from the seller to the authentication center. This change is in-line with what StockX has been doing since its inception. Here is the problem. In the post above where I discuss fees and revenue, I established that StockX loses money on any sneakers sold for less than 100 bucks because of the free shipping aspect. To offset this loss, eBay has increased fees to 12-12.9% on their most popular pricepoint. That’s an additional 4-4.9% fee change.  What can that total be seen as? Item sells for 150. Before at 8% the fee would be 12 dollars. Now that fee is 18 dollars. The average cost of shipping via a discounted rate for a company as large as eBay is 6-8 dollars. The seller wins here because instead of incurring a 9-12 dollar shipping fee to the authentication center, they only lose 6 bucks. eBay doesn’t lose.

3. Final value fee increase for sales between $100 and $150. As part of these changes, effective October 10th, 2022, Sneakers sold between $100 and $150 will see a final value fee change.

What This Means? See the paragraph above and revisit the post on fees and it becomes clear that eBay is not going to take an L here and they’ve actually helped the seller, but instead of being straightforward in the copy the confusing verbiage could be off-putting and could lead to more sellers abandoning the platform.

4. Sneakers sold for less than $100, or sneakers sold for $150 or more, which account for the vast majority of sneakers sold on eBay, will not be impacted.

What This Means? Without any data on the keywords utilized for this statement, no one can say that this is a lie, but after taking the time to do the research in the “Resale is Broken” post, eBay’s average sales on the keyword “sneakers” shows an average price of 91 per pair which was a decline of 8 dollars year over year. The likelihood that the majority of eBay’s sales are over 150 appears unlikely, but I also did a breakdown by brand for the month of April 2022. Even an average of this data by brand shows $130 dollars:

What does this all mean? eBay made an adjustment to fees and explained in an inept and bloated manner (kind of like this post, lol). Seriously, the fee increase isn’t bad at all, but the average seller only knows that they are going to be charged more. They won’t sit and write an analysis to come to the conclusion that this adjustment is simply smoke and mirrors with only one real, significant change. Sellers will have to ship faster, but that isn’t really an issue. The things eBay needs to fix have more to do with an antiquated interface and consumer behavior. That’s another discussion.