eBay is removing UK seller fees to counter a new wave of start-ups in the market

E-commerce giant eBay, facing stiff competition from newer rivals, has removed final value sales charges for all items except cars sold domestically in the UK

This mirrors a similar move the company made last year in Germany, and notably puts eBay in line with the likes of Vinted and Depop, two newer companies that have won customers who want to sell used clothing and similar goods online. Currently, neither Vinted nor Depop charge fees to sellers and make money through other means.

eBay’s announcement comes against the backdrop of rising costs of a wide range of consumer goods in the UK, which in turn is driving demand for cheaper, ‘beloved’ alternatives. This was particularly significant in the fashion sphere, where second-hand clothing sales rose 18% last year to $197 billion globally, accounting for nearly 10% of the total fashion market.

Vinted, a second-hand clothing marketplace recently valued at $4.5 billion, recently achieved profitability for the first time, with its sales increasing by 61% to almost €600 million in 2023. Other players, such as Etsy’s Depop, have also seen sales increase. This prompted eBay to remove fees from sales of fashion items in the UK in April.

Now eBay is going all out and removing fees from selling most items, with one exception covering automotive products like cars. This means that sellers will not be charged a fee for the final value of goods sold, nor will there be any fee for listing the first 300 items, after which eBay will charge a fee of £0.35 per item.

Residual value, as eBay defines it, refers to fees charged based on the full sale value, which includes the sale of the item, shipping and handling fees, taxes and other fees.

Competition

It’s clear that eBay’s operations have been shaped by competition, as earlier this year Depop scrapped sales fees in markets like the UK and the US, relying instead on payment processing fees. Vinted also doesn’t charge a residual value fee, instead making money through ways like “buyer protection” and sellers getting paid to “boost” the visibility of their listings.

eBay hopes that by removing the final price fee, it can tempt sellers with the promise of keeping more of the profits, which in theory should increase choice for buyers as well. And that’s what the company found when it removed the fees in Germany.

“Our initiative in Germany last year showed us that eliminating sales fees can strengthen our marketplace by lowering barriers to C2C (customer-to-consumer) sales, which improves the breadth and depth of inventory on eBay,” said eBay President and CEO Jamie Iannone in an internal email it was also posted online.

And more buyers and sellers potentially open up opportunities for eBay to make money through other new and existing channels, including advertising, financial services and shipping. What’s more, Iannone alluded to a new “buyer-back” fee coming next year that sounds similar to what Vinted currently offers.

It’s unclear whether eBay intends to expand this new approach to other countries, but the company’s three most important markets are the US, UK and Germany, so it wouldn’t be all that surprising if it waived its domestic sales fees in the future.