eBay announced recently that it was going raise some of the fees associated with trading on it’s iconic online auction site. While the fees are designed to increase revenue, potential vendor backlash could mean that revenue moves in the opposite direction.
The fee increase would mean that the existing difference between auction prices and store prices is significantly reduced. Under the old fee structure, the cost of listing store items was 27% less than auction items. The new fees will see this reduced to just 3% according to an article by Ben Carmy from the Seattle Times.
Vendor concerns have been heard throughout the internet, with one group actually staging an eBay boycott. The group put a request through to Google to create an eBay alternative, so that other disgruntled vendors would have another option available. This does highlight the control eBay has on the online auction market, as currently there are no real alternatives.
That said, not all vendors are sharing the concerns. One seller’s comments on an online message board herald the increases as a positive move. “Actually, I think this is good…Have you ever gone to eBay to search for cell phone accessories or anything of that nature? There are TONS of (items) that are so cheap there is no point in me selling my own. I’m glad they hiked it up.”
So while eBay aims to reinvigorate its online auction system, the success of their initiatives will be measured by the actions of their sellers. Generally all fee rises are met with some resistance, but if sellers are able to absorb the costs and still make money, the backlash should be relatively short lived.
It also highlights a real gap in the online market. Until another company creates a genuine competitor, eBay will be in a position to dictate the terms…and nobody likes a monopoly (except for eBay execs).