eBay removes UK seller fees to counter new wave of marketplace startups
E-commerce giant eBay, facing stiff competition from newer rivals, has removed final-value sales fees for all items excluding cars sold domestically in the U.K.
This mirrors a similar move the company made in Germany last year and notably puts eBay in line with the likes of Vinted and Depop, two newer arrivals winning business from consumers looking to sell used clothing and similar goods online. Currently, neither Vinted nor Depop charge seller fees, monetizing through other means.
EBay's announcement comes against a backdrop of rising costs across a wide range of consumer goods in the U.K., which in turn has been driving demand for cheaper "pre-loved" alternatives. This has been particularly pertinent in the fashion sphere, with second-hand clothing sales growing 18% last year to $197 billion globally, approaching 10% of the overall fashion market.
Vinted, a second-hand clothes marketplace last valued at $4.5 billion, recently hit profitability for the first time with its sales growing 61% to nearly €600 million in 2023. Other players such as Etsy-owned Depop have also reported sales growth. This prompted eBay to remove seller fees for fashion items in the U.K. back in April.
Now, eBay is going the whole nine yards and removing seller fees for the majority of goods, with the one exception being automotive products such as cars. This means that there will be no final-value fee taken from sellers on any sold goods, while there will also be no insertion fees for up to the first 300 items listed, after which eBay will charge £0.35 per item.
Final value, as eBay defines it, refers to fees taken based on the full value of a sale, which includes the sale of the item, shipping and handling charges, taxes and other charges.
Competition
It's clear that eBay's actions have been shaped by the competition, with Depop ditching seller fees in markets such as the U.K. and U.S. earlier this year, relying instead on payment processing fees. Vinted also doesn't charge a final-value fee, instead monetizing through avenues such as "buyer protection" and sellers paying to "boost" the visibility of their listings.
By removing the final-value fee, eBay hopes that it can tempt sellers with the promise that they'll keep more of their profits, which should -- in theory -- improve choice for buyers too. And that is what the company said it found when it removed fees in Germany.
"Our initiative in Germany last year has shown us that eliminating selling fees can strengthen our marketplace by lowering the barriers to C2C [customer to customer] selling, which improves the breadth and depth of inventory on eBay," eBay president and CEO Jamie Iannone said in an internal email it also published online.
And with more buyers and sellers, this potentially opens the gates for eBay to monetize through other new and existing channels, including advertising, financial services, and shipping. Moreover, Iannone alluded to a new "buyer-facing" fee coming next year, which sounds similar to what Vinted currently offers.
There is no word on whether eBay intends to extend this new approach other countries, but the company's top three markets are the U.S., U.K., and Germany, so it won't be all that surprising if it were to remove seller fees in its own domestic market in the future.
