eBay UK Throws Business Sellers A Bone With Fee-Free Used Clothing Sales Until End Of Year
eBay UK is reacting to recent business seller backlash with fee-free used clothing sales promotion offer good through the end of the year.
In case you missed it - eBay UK sent the world buzzing last week with the announcement they are going fee-free for private sellers across all categories (except Motors) and will be introducing buyer fees in early 2025.
Liz Morton
eBay had previously introduced fee-free private selling for pre-owned clothing ear earlier this year and negative business seller sentiment had already been brewing - with things getting heated at the in person eBay Open UK event where a seller challenged eBay staff about the fee structure and received applause from fellow sellers when she said she would be moving her listings to a competing marketplace
Liz Morton
That negative sentiment has exploded in the week since the update expanding fee-free private selling to most of the site, as business sellers say they feel betrayed by eBay staff who stood up at the event, knowing this big change was going to be announced just a few days later, but not saying anything to avoid having to take the heat for it in person.
These sellers aired their frustration in eBay's forums, across social media, and even with BBC Radio4, saying eBay has now made it incredibly difficult for business resellers of second-hand items to compete on the platform with an unfair fee structure that favors private sellers - some of whom may in fact be businesses who are intentionally registered incorrect in order to avoid paying fees.
One of eBay's big UK competitors in the pre-loved clothing market was clearly paying attention, launching Vinted Pro the day after eBay's announcement - with zero selling fees!
Liz Morton
And now it looks like eBay is responding to the shots fired, though they apparently wanted to try to keep a lid on it by using direct email promotional invites offering "select" business sellers fee-free used clothing sales through the end of the year, rather than making a big public announcement.
Unfortunately for eBay, these sellers aren't interested in keeping there thoughts about the whole situation quiet!
Some took to the eBay UK community, celebrating finally being "heard."
9150simon
Would you belive it - finally they have heard us!!
We wanted to let you know about a limited-time opportunity for business sellers like you to sell your pre-loved clothing for free until the end of the year. All you need to do is opt in and sell your items that are in a ‘used’ condition. As soon as you’ve opted in, you won’t pay any insertion, final value, or regulatory fees through 31 December 2024.
Others made the connection to Vinted Pro and the blowback about the private seller fee changes.
Clothes sellers can now register on Vinted Pro - I did yesterday then got the offer today from eBay. I presume this is a reaction from eBay to Vinted actively encouraging sellers who are happy to register as a business and do things properly.
Seems like a reactionary move in response to the launch of Vinted Pro in the UK last week.
And some questioned the business sense of such a move meaning lost revenue for eBay during the important Q4 holiday shopping season.
For a short time only.
Maybe to encourage some onto the right (business) account too I suspect?So, eBay seem to be giving up a lot of potential revenue at the moment (removing fees for private sales and now this).
I'm struggling to see how this business model will/can work?
Youtubers and influencers are spreading the news too and ready to take advantage of the offer.
But there are a few an important caveats to this announcement.
First, the promotion only applies to apparel items listed in "used" condition and does not apply to anything in new condition or to anything in the shoes or accessories categories in any condition.
Secondly, the promotion is invite only and you must click on the link in the email (if you received it) and opt in to activate it.
The willingness to give up fee revenue in order to boost GMV and Active Buyer is an interesting strategy - particularly since current CEO Jamie Iannone had been highly critical of previous CEO Devin Wenig's strategy that offered quarterly sitewide flash discounts (paid by eBay) to try to attract more buyers in 2018-2019.
Those 15-20% off flash sales proved to be a double edged sword - once buyers get used to receiving discounts, they'll often wait for a sale before making a purchase, creating "one and done" or only occasional buying patterns.
Wenig's strategy was considered such a failure that Iannone felt the need to explicitly distance himself from it when speaking to investors in Q2 2021.
We've discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term...
..This is something that I laid out last July when we talked about the tech-led reimagination as being focused on turning buyers into lifelong enthusiasts on the platform and moving away from the tactics that we had in 2019 what was really just about the number of active buyers even low value buyers or one and done buyers.
However, despite his criticism of those past tactics, it's hard not to see what eBay is increasingly putting themselves in a similar position, only now with sellers and fees - which could actually be more costly for eBay, at least on transactions where these fee-free selling promotions apply.
With Wenig's flash sale failure, yes eBay was covering a 15-20% discount to the buyer, but then on the backend they were still collecting final fees averaging ~12-13% on whatever the discounted total amount of the sale ended up being.
But Jamie's seller fee promotion plan completely gets rid of Final Value, insertion and regulatory fees on these sales - so no matter what the item ends up selling for, eBay is not getting a cut from it unless the seller is using add on services like some some listing features or Promoted Listings ads.
That means he's just burning cash to try to buy GMV and active buyer growth - and much like how buyers became habituated to frequent discounts, sellers can go the same route, holding back some inventory until a fee discount or promotion is offered.
Don't believe me? Check out how private sellers who were used to fortnightly 70-80% off FVF promotions reacted when eBay suddenly stopped sending them in the weeks leading up to the big fee-free announcement.
Liz Morton
Betting on revenue loss to drive gains in other areas is an awfully risky proposition, especially during the critical Q4 holiday shopping season - and one that will take strong execution on the part of eBay management to pull off.
Will this promo be enough to smooth over business seller outrage? Will investors worry about the seemingly desperate and reactionary games being played with revenue in order to try to bump GMV and active buyer stats for Q4?
Let us know what you think in the comments below!
