November 15, 2012

Fee Bay for dummies

Back in late Summer I got an email from Ebay talking about some changes they were making to their user Agreement. It also said they were adding a clause about agreeing to arbitration blah blah…. it also stated that you could opt out by sending written form to an address in Utah (mash that link for a WTF). I thought nothing about it. I wasn’t doing much business there. I have been selling plastic model kits at a site like ebay but it’s free. It’s called ecrater. The problem is that no one ever sees it. It doesn’t get much traffic although it’s tied into Google. Anyway I was making a majority of my sales through several different modeling forums (fora?? -that’s another story) on the interwebz. Anyway not long after the email I came to the realization that the economy was not conducive to maximizing the profit potential of the product in my inventory. These aren’t the 2.00 airplane and tank models from the days of our youth. These are highly sophisticated kits made for skilled modelers.

So I realized what was “Brand X Scale Model Kits” had to come to an end. So I decided to liquidate my inventory and some model kits I had set aside in my personal “stash”. I loaded the forums with a list of the products I had in my stash and sold a good amount for a slight profit loss. At least My storage unit was emptying and there was money in my bank acct no prob. So when I reached a certain level I decided to return to “feebay”. Then I found out why I received the email announcing the user agreement change and the subsequent identical announcement from Paypal (also owned by Ebay) although the opt out forms go to a different address.

Once upon a time Ebay was a place where a small business person could sell or auction items for a reasonable up front fee. Then they got larger got a new CEO bought Paypal and morphed Ebay into the Bearded Spock version of what it used to be. FEE BAY (but I was not aware of this).

So I started selling stuff and things were going at quite a pace then I checked my bill from Ebay after I looked at my Paypal account and the numbers didn’t add up.  That “reality” prompted me to investigate. Apparently this is how Fee Bay is working now:

If you sell through Fee Bay they get 9% off what you get 9% of what the buyer pays for shipping from YOU then on top of that Paypal gets the 4% on top of that.

So you sell something for 45.00 and 8.25 shipping (you paid for listing at least .50 then goes up)

total- $53.25 (minus paypal’s 4%)
$51.12  ( 9% of 45.00- 4.05  and 9% of 8.25 =.74 Total= 4.80)

$46.32 Now you have to pay for the shipping 8.25

$38.07 (minus the listing fee .50 and other fees)

$37.57 is what you end up with in your paypal acct. when you asked $45.00 (well with the listing you agreed to $44.50-43.20 given the Paypal cut) for your item.

Increasing the price means NO Sale.  Padding the shipping expense means ripping people off and Ebay gets all of what you might get away with their 9% shipping value fee.

That is the magic of Fee Bay and Paypal unveiled.

This is why I opted out of the arbitration clause on the new PayPal user agreement.   I smell a major Class-Action coming for Ebay and Paypal… but precedent is not promising given previous rulings in earlier Class Actions.  But I have sold everything I needed to and have one 1/72 Chinook A for $10.50. After this I am out for good. Pretty much breaking even and having some free models for my own hobby.

Bad thing about making a business out of your hobby- you can’t do both in a one BR apt.  Now back to the hobby.  I’ll post some pics of some of my models soon I am a mediocre modeler but I now have time to bleed (from Xacto cuts) and glue!!! Glad to be back!! — Dane

3 responses to “Fee Bay for dummies”

  1. FloridaBill says:

    I think you should be lead plaintiff in a class action. You have done the research and are ready to rock.

  2. DaneBramage says:

    Do you think their “cut’ is close to usury? You should click the Paypal link and look where (oh, they also hold your money for up to 21 days) people’s money have been denied to them (talking thousands here). Did you see where the Ebay opt out forms were sent to?

  3. Yarbz says:

    A real auction house will take a far greater piece of the pie though… Running a business is not really a good idea through ebay unless you’re selling stuff with a hugh profit margin… I see my personal stuff there and usually get more than if I listed in on craigslist… Anyway, I wanna see the pics!