Soooo....what exactly is ebay doing with my money?

[iwantmyriokarma]

The mystery: This is the internet. It costs nothing for ebay to host items for me.

So...what exactly does ebay do with my fees? These fees are ALSO increasing over time...mind you this is the internet...they should be getting better and more efficient over time...not the opposite.

How can it take away approx 10% of my total price. This is an enormous amount compared to any other service business. I don't think I spent more than 5 minutes on the phone with ebay/paypal this entire year. Noone has filed a complaint with me for months despite thousands in sales.

[recped]

So...what exactly does ebay do with my fees?

http://investor.ebay.com/annuals.cfm

This is the internet. It costs nothing for ebay to host items for me.

Nothing? Yes I suppose the internet fairy pays for it all.....

http://www.sltrib.com/business/ci_11240616

Online auction giant eBay has decided to build a $334 million computer center in the Salt Lake Valley, state and company officials said Monday.

[coxengines]

iwant,

What exactly are you doing with all the money you rake in?

How can it take away approx 10% of my total price.

They are not taking anything from you. You are voluntarily giving it to them.

Pricing is known up-front and, if you don't like it, simply open up a B & M store, pay for advertising, staff and all other associated costs and hope the "fairy" is on your side.

Xena

[iwantmyriokarma]

The marginal cost of hosting the text of my image and my picture is nil. I could host 100000 items and their bandwidth for 20 dollars a month

Yes. I choose to list on ebay because it makes more sense at the moment than opening my own website. That doesn't mean: 1. Ebay's fees are so high that they serious discourage sellers, thus lowering the quality of the marketplace, thus reducing buyer interest, and thus dinging me again.
2. Ebay has huge and unneccessary expenses that are unheard of for a website that are passed on to its sellers, seriously detract from its core businesses and pruning of these costs would help everybody.

[plasmaco]

Not to mention that some Tv or radio, or print or whatever advertising would be welcomed too.

Haven't seen those since the "Windorphins" gimmick from mid-last (2007) year .
.
.
Happy New Year from

[coxengines]

I could host 100000 items and their bandwidth for 20 dollars a month

With your reputation or, more succinctly, lack thereof, your 100,000 items would languish with little exposure. But then, it was a bargain...

What you are complaining about is called "business". None of what eBay offers is necessary to survive in this world. We all have choices and it is your choice to use eBay's services. Don't complain about it after you sign up.

Many of our items we list at a 1,000 to 2,500% markup (it's not a typo) and I really don't care if someone thinks it's immoral. After all, nothing what I sell is essential to life in itself. If buyers choose to buy, it's entirely their choice.

Ebay's fees are so high that they serious discourage sellers

Sorry, but I consider myself a serious seller. Although I certainly am not in agreeance with everything eBay does, their fees are not one of my peeves.

Xena

[iwantmyriokarma]

So Love it or leave it?

I'm surprised at the knee-jerk reaction. You people are just as awful as those who complain out of ignorance about ebay's policies. Is this the level of dialogue I should expect in these forums?

Nowhere do I insinuate ebay is doing anything immoral or make these kind of judgements.

My point is that the marginal cost is tiny for my items. You don't seem to understand this concept...your point is completely unrelated.

Also it's clear you are in an exceptional position. It's clear fees don't affect you in the same way as other people, for example doubling FVF would put people out of business but hardly affect your final profits.

I don't have to defend the idea that ebay fees are discouraging for many people. I think it's well established.

The topic I want to discuss is that it seems strange that ebay gets 1000's of dollars from me, yet doesn't post a huge profit. Again, I know I have not generated large costs for ebay, and since it is an established company...where do my fees go?

[coxengines]

You people are just as awful

Once you learn to love yourself, you will find it easier to accept others. Just because someone has as different point of view, does not make them awful - they just have a different take on things ]:)


My point is that the marginal cost is tiny for my items

Solutions:

Raise the margin
Change the product you are selling
Find a different venue to sell your product

eBay fees are set by eBay and we can choose "yes" or "no" to doing business with them. Your fees go to the privilege of them letting you place your ads on their servers.

What they do with your money is irrelevant as long as they provide the service they have agreed to provide for your fees.

eBay has costs beyond most people's imagination. If you want a breakdown, have a look at their financial statements and you will get the answer to your question. It's a publicly traded company and they are bound by disclosure rules.

I guess what I have a hard time understanding is why you are fretting about where your fees go or how much profit eBay makes. As long as they provide what they promise for your fees, for me that's what counts.

If their fees are too high or their terms too onerous then I, myself, would pack up and try my luck elsewhere

Of course, selling low-margin items on eBay is a daunting task at best, I concede.

Having said that, selling the same items outside of eBay will likely not enhance profits very much as there is more to selling than just hosting your items on a $10/month website. If it were that easy we would all be doing that instead of selling on eBay.

You are selling products that are price-sensitive, low-margin and high-risk; hence I understand your frustration, completely. However, the power to change lies within yourself. Hope things go better for you in the future. :-x

Xena

[jeffglobal]

IWANT -- I'm with you!!

Don't be surprised by the reaction of others here though. The solution? Don't post here. I learned this one a while ago. eBay's not a perfect system (one thing everybody that posts here should agree with me on), but trying to convince brainwashed sellers to get off their highhorse and agree with you isn't going to happen here (I'm not convinced that some of the regulars here aren't eBay employee's trying to fill the void of Miriam's big shoes -- she's greatly missed by the way, and was a huge asset to this site in every possible way, another point that everybody that posts here should agree with me on). Believe it or not, I remember a time when this board wasn't full of negative people that would attack every word you wrote and actually went out of their way to HELP you (without dry sarcasm)!! With the dynamics of eBay constantly changing, so has its community. My reason for using eBay isn't to make nice with other sellers -- it's to make $. To the sellers that enjoy attacking others and distorting what others have written to meet their own agenda (much like I'm certain this post will be), perhaps you meant to visit a chatroom or open a Facebook account or something, and in error opened an eBay store?

Until something meaningful changes at eBay's core, I'm done with this board. You can all have the satisfaction of talking about it amongst yourselves.

[prescilaschina]

Yes Virginia there IS an internet fairy.

lol at "Once you learn to love yourself ..."

[iwantmyriokarma]

Yes, good points Xena. I'm looking forward to hear more from you next month :-).

Well, I find it hard to believe other experienced sellers aren't interested in this topic or don't have anything to say about it. I have had many roles on ebay and I'm a "stakeholder" by any definition. I buy, sell on ebay, and until last year, held ebay stock...now I guess I'll try to play ebay exec as well.

The bottom line is, it's hard to believe a website that is already established costs billions to maintain. Reading an annual report isn't anywhere the same as a business strategy analysis.

Can anyone name 3 USEFUL innovations that seriously improved our experience? I think DSRs are the only thing I can name...could this cost hudnreds of millions to design and implement, I don't think so.

There's just something seriously wrong here. It just doesn't ad up unless I'm missing something really obvious.

It's like ebay management is misleading shareholders and is spends all of its money and effort to start big costly projects that are designed to provide stumps to further their careers rather than add to ebay's core business.

[recped]

Well, I find it hard to believe other experienced sellers aren't interested in this topic or don't have anything to say about it

The OP seems to think that while it's ok for him to be here to make a profit it's not ok for eBay to do the same.

[coxengines]

and in error opened an eBay store?

Oh, that's what it was. I thought I had clicked on "Facebook" when I opened an account - I can get quite confused with all this on-line stuff.

I guess that explains why no one has added me to their "friends" list.

This dumb blonde really needs to get her hair dyed another colour 🙂

Xena]:)

[coxengines]

And to iwant,

There's just something seriously wrong here

Markets ALWAYS regulate themselves, no exceptions.

Xena

[ampurtle]

IWANT:

You obviously have no concept of what is required to run a site like this... get a cloo, I saw 2 for auction yesterday...

You can't have a meaningful discussion when all you are armed with is smarties and whine...

[iwantmyriokarma]

recped:
If you read my post nowhere do I blame ebay for making a profit. In fact, its the exact opposite...I'm surprised ebay doesn't have a LARGER profit. That's the entire point of my post. I'm not going to respond to people who are unable to comprehend such a simple idea.

xenalook:
That's just not correct. Markets are not perfect. Just for two examples I think you should consider: 1. what a monopoly is, 2. what assymetrical information is, and how assymetrical information can interfere with the relationship between managers and shareholders.

ampurtle:
I think ampurtle has given a great example of an post that is not helpful to anyone, and even lacks sincere intentions.

[craftycatsattic]

jeffglobal:

If you stick around long enough and get to know the posters a lot better you'll find that most of them are really very helpful and Xena is no exception!

A lot of us on here don't really post to find solutions. We post because we're frustrated and want to air our frustrations. Some people will hold our hand and tell us it's ok and to hang in there. And some people will slap us in the face and tell us to stop whining and to look for some more productive way of solving our problems...and sometimes that's exactly what we need!

[coxengines]

And some people will slap us in the face and tell us to stop whining and to look for some more productive way of solving our problems.

.... I'm glad you did not have me in mind when you wrote that...:-D

Life (and business) is but what you make of it. Many of the most successful leaders and the most successful business people were born either into poor or so-called average families.

Their difference? They had a vision. Setbacks were never failures but rather lessons learnt in how not to approach a subject. And, most importantly never, ever, listen to people that tell you something can't be done. Read: Automobiles - computers - telephone - airplanes etc. These were all once ideas that "would never make it" according to the "experts".

And b.t.w., Iwant, eBay is not a monopoly. There are many, many choices out there. For my purposes they are currently the best option IMO but, again, they are only an option and subject to my taking my business elsewhere if I don't like it.

Stop spending your time worrying about other's (eBay's) bottom line and corporate structure, spend the time saved on making your business thrive and 100% you will get there.

Good luck!
Xena

[faerywishes]

iwantmyriokarma
I am wondering what other avenues you have looked into that would provide you pretty much everything that EBay offers us in here at a cheaper price.

I have looked and have yet to find another that can come close to what I can have here. I have found others that cost more and I get less. Or I have found others that are very cheap and I'm on my own.

No where else can I get the traffic that I get here and at the prices I get here.

Have you thought about all the people they employ, advertising, the costs to run this internet business, building rents, utilities, and the gazillion other things that it costs to run a business.

They are here to make the most profit they can and remain competitive. They are doing this for the profit, I can't imagine another reason why a business like this would do this. For the fun of it 🙂 I don't think so.

You may not think you don't utilize many of the things that you have at your disposal in here, but I can assure you, you use more than you think.

In fact this board is one. The fact that any of us can come in here for help or support or even just discuss an issue as you have started. You have your opinion as we do. You'll find that most don't have a problem discussing things at all; however, you might not find many people to agree with you or then again you might.

I am quite happy with most of the things Ebay has to offer me. When I'm not, it's time to leave. For the most part I find them to be fair most of the time. Sometimes some issues are a PITA and take time to get resolved but you'll find that pretty much anyways with any business.

Colleen
Faerywishes

[iwantmyriokarma]

Please read the first few paragraphs. Once you're done, please read it again.

This is not a moral judgement of ebay or capitalism.

Again, for the 3rd time, this is not a "OMG the fees are too high" rant. Again, I am not saying that I do not want ebay to make money. I want to know where the money goes and how is that justified for a site that has declared itself to be simply a bulletin board and designed itself to have zero liability and provides little service.

Ebay has a GAAP margin of 24%. Apple has a GAAP margin of 19%. Apple is a company that develops, manufactures, warehosues, and sells, real products. It just doesn't add up that a website costs that much money to maintain, specifically, 1.6 Billion in the last quarter alone.

Why would I be interested in this question? Because, even apart from the fact its interesting company, I do *ALOT* of business with ebay and even owned ebay stock in the past. In democracies, people study their candidates and vote in elections. Why? Are they likely to change the election with their single vote? No. They wanted to be informed, as a stakeholder, in something that affects them.

4scrapper,

Basically from a stockholder's perspective. Q3 2008 they made 2B in revenue and 1.6B in costs. Yes, of course ebay has costs. But your post does not give any explanation of how hosting this website costs 1.6 billion dollars.

Your example of hosting this forum is, quite frankly, a dismal example of a cost. I have personally implemented forums with similar traffic, and the cost is negligible.