Public Defender: eBay set to start charging commission on shipping costs as well as item sales

THE nation’s most popular auction website eBay will start charging commission on shipping costs with Australian users to be notified by email today.

Public Defender

THE nation’s most popular auction website, eBay, will start charging commission on shipping costs.

Hundreds of thousands of Australian users will receive an email this morning that says from May 6 “final value fees” will apply not only to the sale price but postage.

The move is likely to be unpopular with many sellers, who are already paying final value fees of as much as 9.9 per cent — up from 5.25 per cent three years ago.

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To understand how the latest change affects sellers, consider a real eBay auction — a golf club with a starting price of $89 plus postage of $19. If the club sells for $120, then under the current fee structure the seller will pay eBay $11.88. Under the new structure the fee will be $13.76. The extra $1.88 is a 16 per cent bonus for eBay. If the item sells for the starting price, the fee increase is even bigger — 21 per cent.

The auction website said it had negotiated a 10 per cent discount on Australia Post rates for sellers. It also said 60 per cent of sellers already offered free shipping and the sellers who did so sold more.

“We are trying to encourage more sellers to show one price for their item, including shipping,” said eBay B2C Marketplaces senior director Hamish Moline.

“Our objective is to get them to shift their behaviour. Sellers that don’t respond to this may see a fee increase — in their eyes.”

That won’t be the only punishment, eBay will set its algorithms to demote items that have an additional cost for postage.

“You’re at risk of being ranked more lowly,” Mr Moline admitted.

Despite the jump in the final value fee percentage since 2011, Mr Moline said sellers were paying less per transaction because listing costs had been “virtually eliminated”.

But other up-front fees, such as the cost of a “store package”, have been lifted.

That’s hit sellers such as Frank Klamka, who owns Star Components, an audio, video and phone accessories business in Castle Hill.

Over the past 10 months, while Mr Klamka has been concentrating on growing other marketing channels, he has had to pay eBay nearly $500 in store fees — for just two sales. When he first opened a store on eBay he was being charged less than half the current monthly fee.

He said eBay had become greedy, exploiting its position as the dominant Australian online auction site. He considered switching to the free site Gumtree, until he discovered it was owned by eBay.

From August, a seller’s star rating will drop only after negative feedback from at least eight buyers.