eBay has morphed into its present state via a heavy investment in understanding how the online marketplace would change over time as the benefit of shopping, whether for an item that has been considered and price is the only driver, or just browsing generally would become more popular. This is clearly to the detriment of the “high street” where traditional retailers are suffering. Almost daily the larger chain stores are announcing closures, cutbacks and methods of competing by entering the online marketplace themselves.
eBay is still a market for selling used goods and that is signified by the fact that the first twenty items listed for sale are free. eBay has, in that regard, become a service provider, while for “commercial enterprises”, the fees begin early. After twenty items it costs £0.35 per listing which is entirely reasonable but soon extra costs start to kick in. Sales, as opposed to listings are where the costs really start to mount.
eBay charges for selling are a significant cost to retailers who choose this method of selling and eBay itself fully appreciates that it “got in first” but must always protect its position as the market matures but remains far from saturated as specialist platforms start to grow. These are where a consumer who knows the product he desires, whether that is a kettle or a garden hose looks first at sites where several sellers congregate to sell particular ranges of goods.
Amazon seller fees on a per item basis are comparable to eBay, despite being clouded in a slightly complicated calculator.
The Amazon seller fees calculator allots different prices to different sectors but the “referral fee” is what varies most. For example, a sale in the DIY sector of an item valued by the seller at $35 will be offered to the customer at $39. Once sold the retailer will receive $34.32. Amazon takes a referral fee of $ 4.68. If that $39 item is in the kitchen section, the referral fee is $5.85
Again, a comparison with eBay needs to take place given the variable scale of Amazon’s fees which appear to be more based within a retailer environment while eBay still clings to its roots in the “second-hand goods” market making its structure easier to follow.
About Alan Hill
Alan has been involved in the FX market for more than 25 years and brings a wealth of experience to his content. His knowledge has been gained while trading through some of the most volatile periods of recent history. His commentary relies on an understanding of past events and how they will affect future market performance.”