The Chief Financial Officer (CFO) position at eBay should auction to the highest bidder, hopefully a linear programmer, because the company just cannot make up its mind how much to charge sellers for listing items. The latest ‘renovation’ of prices – the second of the year - happened about two weeks ago and takes effect on September 16. This time the firm cut the fees it charges sellers for fixed price listings.
I do more selling than buying on eBay. Therefore, I have often wondered if the CFO, or whoever is in charge of pricing, has a clue. I have been trading on eBay since 2005 and I don’t remember a year when there was no tweaking of seller fees. It has become an increasingly irritating ritual.
I guess eBay is trying to attract more buyers by encouraging sellers to list items at fixed prices, rather than letting buyers go at it via auction. However, eBay will cease to exist if it kills auctioning. Auction sales are what make eBay fun and enticing for sellers. A fixed price sale cannot give a seller the adrenalin rush of watching buyers snipe one another as an auction reaches a crescendo.
A related issue to listing fees is the “Final Value Fee (FVF)”, which is eBay’s cut on an item’s sales price. Try selling pricey items like gaming devices or multimedia storage devices and watch these fees snowball.
In 2007, I’d finally had enough of the incessant tweaking and bleeding fees and decided there was only one way to fight back: buy the stock. Dividends should soothe the pain of high sales fees. Yes, I know eBay, like many growth tech stocks, has never paid a dividend but that’s another matter. If you intend to trade on eBay for a long time, buying the stock is a good way to hedge against the tweaking and bleeding. If you do not intend to trade for long, eBay still is not a bad stock, so long as they have PayPal.
