Traders claim eBay fees are killing business

Small firms which rely on the auction site for most of their sales say that its new higher commissions are squeezing profits

Small firms that sell their goods on eBay are being squeezed out of business by a massive rise in fees to use the online auction site.

Many traders have seen their costs double, with eBay siphoning off up to 12 per cent of the final sale price. The recently introduced price rises have affected particularly those small firms that rely on the site for most – if not all – of their trade.

Johnny Alexander, who has been running the eBay designer watch shop Planetwatch for the past nine years, said the fee increase had run his business into the ground. "I'm looking for a way out. I've been going to school to try and get another profession. They're taking too much money. My profit used to be around £4,000 a month, but now I'm lucky if I'm making £1,500, and in London that's not a lot to live on."

One antiques seller, whose company relies entirely on eBay, revealed this weekend that he has had to make two-thirds of his staff redundant in recent weeks as a direct result. He is now worried he will have to wind down the whole company.

Like many other traders, he fears that complaining will lead to eBay shutting down his account altogether. Speaking on condition of anonymity, he said: "They're ruthless. That's how they keep their dominance. They were taking a third of my profits in fees and now it's two-thirds. If I lose my top-seller discount I won't even make a profit. I built my business around eBay's platform. I don't have a shop or anything; if this goes I don't have an alternative."

Users were given just four weeks' notice when the increases were announced in May, despite most reviewing their finances annually and having no way to cushion the blow. Now many say they are being driven out of business as their already small profit margins disappear.

Antiques sellers saw their final fee nearly double, going from just over 5 per cent of the total paid to 10 per cent, often eliminating any profit. Those selling clothes, shoes and accessories now have to hand over a 12 per cent cut of the price of each sale.

Judie Johnson, who set up her Art Deco jewellery business at the start of the year, was shocked when the prices went up.

"With PayPal fees – which are a part of eBay – on top, it ends up that they take around 16 per cent. It's made it much harder," she said.

The old fee structure was a sliding scale, where the site took a much smaller percentage of the price from higher-priced items. But now eBay has introduced a flat percentage, which allows it to take big sums from the sales of more expensive goods, leaving many traders out of pocket.

The Federation of Small Businesses said the fee increase is causing major problems for a key sector of the economy. According to its spokesman, Andrew Cave: "Since it provides a platform for business to grow during this difficult time, one would have hoped that eBay would have acted responsibly and seen this as an opportunity for the future. Instead they've raised prices for a short-term revenue grab. Where eBay is at the centre of [a trader's] business model, this could be catastrophic and is obviously leading to job losses and even some business closures."

One former trader posted on an eBay chatroom: "Sadly I have closed my shop, there's no point in running it any longer as it can't even wash its face... I personally don't know why eBay is slaughtering all the sellers."

Not all sellers on the site have seen the cost of trading rise. In an attempt to make the site competitive with rivals such as Amazon Marketplace, those selling technology have had their fees slashed to 3 per cent.

A spokeswoman for eBay said: "We announced a new fee structure for eBay business sellers in May, introducing a fixed final-value fee on items if they sell and lower insertion fees. Fees have fallen overall for many sellers, but have increased for some, and this depends on what category of item you sell and the price you sell at."

Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
Life and Style
tech
PROMOTED VIDEO
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
News
news
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Catherine (Sarah Lancashire) in Happy Valley ((C) Red Productions/Ben Blackall)
TV
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Sport
Robin van Persie is blocked by Hugo Lloris
footballTottenham vs Manchester United match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Recruitment Genius: PHP Web Developer

    £30000 - £50000 per annum: Recruitment Genius: Are you a Web Developer looking...

    Ashdown Group: Moodle Developer (PHP ,Linux, Apache, MySQL, Moodle)

    £35000 - £45000 per annum: Ashdown Group: Moodle Developer (PHP ,Linux, Apache...

    Recruitment Genius: Web Developer

    £17000 - £30000 per annum: Recruitment Genius: This is a fantastic opportunity...

    Recruitment Genius: Junior .NET Web Developer - Winform / MVC

    £21000 - £26000 per annum: Recruitment Genius: This Award-winning pharma softw...

    Day In a Page

    A timely reminder of the bloody anniversary we all forgot

    A timely reminder of the bloody anniversary we all forgot

    Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
    Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

    Homeless Veterans appeal

    Former soldiers pay their respects to a friend who also served
    Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

    Scarred by the bell

    The downfall of the TV star charged with bar stabbing
    Why 2014 was a year of technological let-downs

    Why 2014 was a year of technological let-downs

    Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
    Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

    Will revolutionary Cuba take 'bourgeois' golf to its heart?

    Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
    The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

    The Locked Room Mysteries

    As a new collection of the genre’s best is published, its editor explains the rules of engagement
    Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

    How I made myself Keane

    Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
    Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

    Parting view of Ofcom chief... we hate jokes on the disabled

    Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
    A look back at fashion in 2014: Wear in review

    Wear in review

    A look back at fashion in 2014
    Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

    Ian Herbert: My 10 hopes for sport in 2015

    Might just one of them happen?
    War with Isis: The West needs more than a White Knight

    The West needs more than a White Knight

    Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
    Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

    'The day I was shot by the Taliban'

    Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
    Revealed: the best and worst airlines for delays

    Revealed: the best and worst airlines for delays

    Many flyers are failing to claim compensation to which they are entitled, a new survey has found
    The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

    The stories that defined 2014

    From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
    Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

    Disaster looming? Now you know where to head...

    Which British city has become the first to be awarded special 'resilience' status by the UN?