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alexwberg
Jun 21, 2011
Fees moving from tiers to flat percentage
Hi everyone – after about three years with no change in fees, we've decided to move from our tiered fees to one low, standard flat rate percentage.
As of July 1st for new merchants, or September 1st for existing merchants, final value fees will be a flat 3.5% for nearly all items.
We’re only changing the final value fees – it’s still free to list items on Bonanza. We’re making this change to simplify our cost structure; something particularly important when communicating with prospective new merchants. We're also doing it because we want to be able to lock in our fees so that sellers can set up shop without having to worry about fee changes -- with this update, we will now be locked in through at least the end of 2012.
3.5% as a final value fee benchmarks very well. It’s still much less than the big guys and holds up nicely against many others. In addition to simplifying communication, making this change also makes comparison shopping easier - as percentage-based fees are the standard for many marketplaces. Because we think Bonanza compares pretty favorably to other choices, we’re happy to play along.
How does 3.5% compare to our current tiered flat fees? Well, it depends on the price of your item and where it "sits" in the price tier. For some items it will be slightly less and for others more, but on the whole, we chose 3.5% largely because it matched up very closely to what our existing fees averaged out to.
There are two exceptions to the rule above. First, there is a minimum fee of $0.50 on items sold (as had been the case previously). Also, for more expensive items, Bonanza will charge 3.5% on the first $500.00, but the fee drops to 1.5% for the amount in excess of $500
The usual anticipated questions…
- Does shipping still factor into Final Value Fees (FOVs)? Yes, just as it did before. The FOV is based on [the sale price of the item] + [the shipping amount over $10]. If your shipping is less than $10 then it doesn't factor into your fees.
- Why change fees now after so long? To remain competitively positioned for those who are looking for a new marketplace, and to be able to guarantee our prices won't change for some time to come.
- Are you going to raise the cost of premium services? No.
- Are you going to start charging to list items? No.
- Are you charging extra to list extra photos? No. There are zero charges for listing an item. And no "upsells" in listing items at all actually.
Questions? Fire away!
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71 responses to Fees moving from tiers to flat percentage
I though there was going to be announcements on our Bonanza pages when these came out but I’m not seeing an announcement there. Just wondering why that is. Thanks!
Is the .50 minimum fee for items sold still at the price point of $9.99 and under. Thank you. I like the fee structure. I always wished on small items that are $2.50 to $3.50 that the fee was not .50 cents but I realize we cannot have everything
When I first joined Bonanza, I set up my prices ending in 99 cents. Several months ago, I changed to whole dollar prices, but I really had a hard time increasing my $9.99 item to $10.00, my 49.99 item to $50 and so on because the penny increase in price would mean up to $2 increase in fee. Guess I can go back and correct all that pricing. I believe the highest priced item I’ve sold here was $250. That fee would increase from $5 to $8.75. Oh well.
I’d prefer Bonz reconsidered the $10 shipping allowance. When it was put in place priority mail was one price coast to coast. Now I shipped a 4 pound package to NJ over the weekend for less than $6 priority. If I had shipped that same package to CA, the cost would have been $13.20 and my fee would be based on the item price plus $3.20. So I’m being charged to ship cross country. I’d really like to see this given some more thought. Perhaps the shipping allowance can be increased to be $15 which is essentially the cost of a priority mail large flat rate box.
Just a thought!
Kudos for the bonz!! not really happy though about the shippin, as is hard sometimes, especially for me shipping from ‘bama to california on heavy items to be under the $10 mark…so will just have to ’adjust’ those items in the event they go west, if not, the buyer will get a refund.
am happy as the bonz has had such low fees, and i still believe this is low. thanks for all ya do!!
@GeneralVarietyStore – the My Bonanza module is set to only show messages that are shown to merchants only and not messages shown to anyone who reads the blog (like this one here). It gets used very infrequently.
Do I have this right? My cat wheels are 425.00 including free shipping..right now I pay 5.00 in fvf’s and it’s going up to 14. something?
@TipTopMgr – the $0.50 minimum is really just that – a minimum. We will charge 3.5% on all items unless that fee comes out to less than $0.50. Then the minimum kicks in.
(excluding, of course, items over $500 where we only charge 3.5% on the first $500 and 1.5% on the remaining amount)
Okay. Thank you Alex.
Knew it would change eventually and announced on my 2nd year anniversary…
@sofyblu2 – that sounds correct for that specific item. Some items, depending on price point and the current tier, will increase.
However, some items, like your Eames plates will remain the same as before. And some other items, like your Knowles Bowls or Eames Federal Glass Tumblers, will actually get a reduction in fees.
Comparing before and after depends on where your items were priced in the tier.
any consideration as to the fact that shipping prices have hit us all hard and now being charged again on the ship prices?
I agree on the shipping cost. We can’t control shipping on heavier items. I recently shipped over 25 pounds of china and it cost me $35 to ship it. I charged the customer $28. I certainly did not make money on shipping! While yes I did get credited on $10 of that I also paid fees on the remainder. I live in the middle of the country and can only imagine what that would have cost one of the sellers who live on either coast to ship it to the opposite side of the country. I won’t ship anything like that parcel post due to the fragile nature of the items so it shipped priority and I did check other shippers for cost, which would have been even higher unless I wanted it to take much longer for the customer to receive it. I really wish there were some way to refigure the fees on shipping. (Unfortunately I do know this is hard to do especially after seeing listings just yesterday for someone charging over $20 to ship an item that only weighed 5 pounds!)
so another words in order to stay afloat we need to sell very very cheap
@softblu2- tell me more. We didn’t change anything with regards to shipping.
Never a big fan of taxing the S/H charges. Understood some sellers will charge extra S/H to circumvent/cover the fees.
These charges do not cause us direct harm as we are always under $10 but if you are going to encourage bigger ticket items that require extra expense in shipping then I would think you would be happy with the fact that the sold item would be a nice fee collection without hitting the seller on the shipping.
@softblu2 – I imagine everyone has their own determination of what ‘afloat’ and ‘very cheap’ is – sounds like a personal choice to me.
An item priced at $125, for example, also has lower fees than before. That might be very cheap to some, but not others.
Sounds good to me…. a $10 item will stay the same
a $20 item will DECREASE in fees by .30
a $30 item will increase by .05
a $40 item will increase by .40
a $50 item will increase by .75
a $60 item will DECREASE by .90
a $70 item will DECREASE by .55
a $80 item will DECREASE by .20
a $90 item will increase by .15
a $100 item will increase by ONLY .50!!!
Now take into account the new rewards program for tagging… I personally in 3 weeks time have accumulated approx. $6.00 worth of tokens in each of my booths. I could conceivably sell a $200 item each and every month without having to pay the fvf’s. This is NOT a “The Sky Is Falling” announcement
It really won’t affect us much if you really look at it as a whole and then take into account the tokens that will save you money on FVF’s.
I do however agree with the shipping – as a Canadian my shipping costs are usually double what you guys pay… so the $10 ceiling is pretty much unrealistic for anything other than CDs, DVDs etc
Hello Stupid here hahahahaha if I sell something for say $69.00 what does Bonanza get???
Alex????
anybody???
ok bye
@TroiiWarchild $2.41 that’s a decrease in fees – before the change it would have been $3.00
Very Fair and easier to calculate. And If the Bonanza Site does Well, Chances are We Will All Do Well.
@TroiiWarchild – to determine costs on your item simply multiple the item price by 0.035. Shipping, depending on your cost, might be a factor per the post above.
(wow, step away from the blog to grab a sandwich and…..) ; )
@alex I’d love a response to my comment above, regarding shipping costs. It seems to have been overlooked. Thanks.
@abbysattic – we’ll take it under consideration! Sorry I missed your suggestion.
i say it’s about time, should be 4%.
Does this mean we will get advertising for the up coming fall season?
It won’t matter if you charge 10% if we don’t have people coming to Bonanza to search for items because we won’t have a great sales volume.
My sales are coming in the backdoor from Google search for the most part.
Are you earmarking this 5% for ads or are we still dead in the water with Bonanza name recognition?
Appreciate the notice of about ten weeks before the new structure kicks in for current merchants. That is more than enough time to take a look at my item prices.
@barntiques859 – there are no advertising implications for this change.
@wblresources – glad this gives you enough time. We wanted to give plenty of notice.
Sorry thank you Alex, I had to leave for a minute or 50.
I’m been gone awhile reading news I can’t find anything about shipping fee changes
But getting rid of tiers fees we get all the benefits once only the gold members received
Big increase for items $1,000 or more!
Does this include bagsbonanza?
We are not now being charged for shipping; it hasn’t changed. It has always been that any shipping cost over 10.00 has been added to the Final Offer Value, and that total was the determining factor in which tier/how much we paid.
I would also like to see the 10.00 shipping limit raised, because as Selah said, from Canada, that doesn’t go far. However, I am happy to have ANY amount exempted. Some sites include all the shipping, and some none – but we know how well THAT works!
Thanks for the notice, Alex. The one thing this change does, is make it easier when deciding upon a price for an item which falls close to the current tier levels, i.e. 9.99 or 10.99.
@barepocket – there are no changes to shipping fees. That’s why you can’t find it. ; )
@loristhisandthat – this also includes Bags Bonanza.
Hardly any change for items selling for under $100.00
Look what happens after $100.00
100.00 was 5.00 now 3.50
200.00 was 5.00 now 7.00
300.00 was 5.00 now 10.50
400.00 was 5.00 now 14.00
500.00 was 5.00 now 17.50
Well, nothing like a fee increase… Guess it’s a good way to weed out sellers stuggling to make a buck while bringing their own traffic since the site won’t advertise. This could be a serious deal breaker, especially for those of us who offer free shipping.
Doesn’t seem cricket to raise prices on us and then to not take some of that money and advertise. Heck, get us on a race car or something for heaven’s sakes!! Now that eBucket wants out of the selling biz side of what they do, someone needs to pick up the ball and run with it. It should be us!!! But it’s gonna be Google who gets that traffic when all is said and done, they are staging for it now which why we all had to comply with their changes.
Thank you for locking in fees through 2012. After dealing with the other guys, and their sly ways, anytime there is change I get a little anxious. For me I will benefit from this change. My favorite prices are $10 and $12. Didn’t really want to change all my $10 prices to $9.99.
Fees moving from tiers to flat percentage
Just a thought maybe people are getting confused because it states moving from tiers and might need to be reworded…..Sorry…..Just my thought
Think a percentage is going to be easier to work with and, in my case, some go up and some go down so will still average out. My shipping is never more than $2-3 but I can see where the USPS ever-increasing rates make it hard with fee increase for those with $10+ shipping costs :(
Thanks for giving existing sellers time to work it out and for locking in through 2012.
Fees are still WAY lower that the Other place. My sales are never big numbers but I can understand the increase will make a significant change for those who sell pricier items.
reksplace36 says:
06/21/11 at 15:07:31
Hardly any change for items selling for under $100.00
Look what happens after $100.00
100.00 was 5.00 now 3.50
200.00 was 5.00 now 7.00
300.00 was 5.00 now 10.50
400.00 was 5.00 now 14.00
500.00 was 5.00 now 17.50
I Like Reksplace example, then add shipping price to those totals. I definitely feel for those sellers who are selling high ticket items, heavy items, antiques, shoes, electronics, etc. Yes 3.5% beats ELEVEN percent elsewhere, but still makes it very hard on those sellers!
I understand that there are problems with sellers trying to get out of paying their fees by making shipping outrageous compared to what they are selling however, I still believe that fees on shipping and handling are just plain WRONG even though we have been paying them all along if shipping goes over $10.00. Why should the seller pay EXTRA on top of the already high shipping costs? Priority mail flat rate is $10.95 (medium box) and $14.95 (large box) also previously stated by abbysattic. This of course is before any handling fees and without an online discount.
As for a “handling fee”, we are entitled to charge for a “service” that WE provide to OUR customers for the process of getting the package delivered to their FRONT DOOR.
100.00 is 5.00 Plus 3.50 (edited by Support. Actual fee is $3.50)
200.00 is 5.00 Plus 7.00 (edited by Support. Actual fee is $7.00)
300.00 is 5.00 Plus 10.50 (edited by Support. Actual fee is $10.50)
400.00 is 5.00 Plus 14.00 (edited by Support. Actual fee is $24.00)
500.00 is 5.00 Plus 17.50 (edited by Support. Actual fee is $17.50)
There are two exceptions to the rule above. First, there is a minimum fee of $0.50 on items sold (as had been the case previously). Also, for more expensive items, Bonanza will charge 3.5% on the first $500.00, but the fee drops to 1.5% for the amount in excess of $500
So is it that minimum fee’s are still staying in place or am I just overtired tonight?
@VarietyStore – what you have there is technically not correct. The fee for a 100.00 (ignoring shipping) is just $3.50 and not 5.00 plus 3.50.
@alex – Thanks I was reading wrong sorry I was thinking you were keeping the minimum fee when an item sold
I really am not affected that much… but if we don’t get our items recognized by google, then we all are dead in the water. Any plans for upping the advertising budget so people will come here to shop more?
I played with my numbers and this seems more then fair..a few will cost a bit more and a few things went down.
As long as Google keeps publishing our items we will all continue to grow…
I do still think the min. fee of .50 is kind of harsh if you want to sell and item under 2.50. I mentioned this long ago when I joined. ( was told they would look into it ) After sellers fees, and paypal fees not much left. And it is kind of funny that no increase for 3yrs but will increase again in less than two. Sellers were worried about increase? AnyWhoo.. I am working on a new site now that will also have a newsletter or online catalog to advertise if anyone might be interested. But it is in the creating stages…
This will have a big affect on most of my items and not in a good way. It seems kind of unfair that it hurts the sellers selling the higher priced items the most.
^ agree with you. I may take off my listing and put on craiglist.
Way, Way, cheaper than my other site!
Please take my Bonz rewards and use them to buy advertising.
I’m fine with the new fees Its still cheaper than the other place and it really doesn’t effect me because all my items currently are still in the .50 cent range
I looked at the numbers after I read the blog and think this is more than fair- way lower than anywhere else I’ve seen ! I really appreciate the notice being far enough ahead that I don’t get one of those “SURPRISE” moments lol :O)
Concurrent with the increase in fees, I believe that the shipping allowance should be increased to $15.00. I say so because long distance priority mail can cost about $15 from coast to coast, for a mere 4 lb shipment.
I have a LOT of business from far away, so including the cost of shipping in the fee structure can be HUGE for me. May we have a little more breathing room on this, please?
I’m sorry Bonz – but have to say it – but it has always made a stick in my throat that FVF are charged including shipping. It never was that way back in the mid 1990’s when I first started selling. Some may not rememeber it but it was ebay paypal that started that. Whenever I brought it up people would respond “It has always been that way”.
I do remember pp invoices and shipping listed separately and fees not charged based on total with shipping cost included.
The seller does not get to keep the shipping fee? how can the seller be charged a fee for that.I know Bonz has been including the shipping in the FVF … but it just does not make sense to me???? There were several threads about this along the way… and many do not know at one time it was different. Yep I kind of knew the fees would be increasing somewhere along the way and Bonz has the right to increase fees to make more.
But I don’t think it has ever been fair to charge FVF on the total sale (including shipping cost) of the seller. Just saying folks. It is rare I come out with a statement like this… I am not leaving just sayin?
Final value fees on shipping is the main reason I am moving away from ebay to here. Guess I won’t be staying here long now. I have no problem with paying a fvf on the price the items sells for but I won’t pay it on shipping. That’s too bad too because I have really been planning on growing my business here.
This will wind up cheaper for me, and as selah55 pointed out, I DO have the opportunity to earn some discounts, under the rewards program.
I must agree about the FVF allowance on shipping needing to be raised to $15.
The new USPS rates are an outrage, and international shipping is through the roof.
Having to pay even more to ship,(the FVF on the shipping), is a shipping expense we, as sellers cannot recoup, unless we raise our prices, which will in turn raise our FVF.
A catch 22.
The change in the FVF structure, to a flat rate, is a good thing overall, IMHO, BUT Bonanza really does need to do some advertising.
I have to agree with Mum regarding the shipping allowance being raised to at LEAST cover the current costs of Priority FLAT RATE PLUS HANDLING FEE, and also recommend an allowance for international shipping. Not having an international allowance will definitely discourage us from selling internationally. As it stands we will only ship with TRACKING and as Mum said is already “through the roof”.
I have no other problem what so ever with the 3.5% flat rate fee. The fifty cent minimum however will definitely and unfortunately discourage us from ever selling SUPER CHEAP items.
It would behoove you to keep in mind the REASON people have flocked to this site. You have DARED to be DIFFERENT from the “standard”.
I like the simplicity of the flat rate fee.
Can you explain why the fees also apply to shipping charges? I understand the fee increase for items- you guys should be making money- but what justifies you being paid a fee when the shipping is solely between my customer and me? Thanks
Thanks, Selah55, for spelling out the new fees! I’m 1 1/2 week new, so much to learn. But still a bit foggy on whether the percentage is on goods only or goods+shipping. And really foggy at figuring shipping. Any place special to learn about calculating it? Also, wondering if you all see my log-in name or my booth name?
On international sales wouldn’t a higher deduction for shipping be more far? I recently sold $85.00 worth of books to the UK. Priority shipping was $48.90 which made the total $133.90 and after the $10.00 shipping deduction it was $123.90 so I had to pay $5 selling fees and actually the items only sold for $85.00. Not complaining just pointing out that the $10 deduction is not enough for international sales as the USPS really gets you on international shipping.
Well, if sells pick up the price is laughably low. Compared to what I pay every month somewhere else. My selling fees there are $300.00 to $700.00 per month. I do not complain because that is where I make my main sells and money. If we could sell as much here, most of us would completely walk away from that site. We would be allowed to keep so much more of our profit here. I just upgraded to gold membership and that price is low as well. I just Pray it makes a difference. I did not know this site was only 2 years old. What if we are all sitting here lined up like those first sellers elsewhere. They had found the goose that layed the golden egg. Maybe we have to?
What is “upsell”?
Not entirely sure how I feel about this as I don’t really have time to play with pricing on my spreadsheet at the moment (got all moved yesterday, but still unpacking). However, I have to agree that the shipping allowance should be increased considering how much shipping itself has increased just in the past 1.5 years that I’ve been here. I’d say an allowance of anywhere from $12.50 to $15.00 sounds reasonable.
As for increased fees on my higher priced items, I’m not happy about that. That’s why I prefer the flat rate tiers rather than a percentage because percentages can cost us a good deal more. With everybody raising prices on everything to adjust for ever-increasing gas prices, it’s becoming less affordable to be in the retail business, particularly E-tail business. So significantly higher FVFs that aren’t directly effected by increasing gas prices seems a bit unfair.
Currently, a $250 item with free shipping costs $5 in FVFs, which equates to 2%. So an increase to 3.5% is nearly double the FVFs we currently pay. So, I’d say that the cut-off point for the fee decrease should be decreased from $500 to $250 and offered at 2% rather than 1.5%. That way Bonz will still be charging/making closer to the same on items in that price range, but making more on items below that to account for those items where a reduction in fees takes place.
Currently, even a $200 item with free shipping gets charged 2.5%, so Bonz will already be making an additional 1% in fees on those. So I’d have to say that a 3.5% fee on anything below $500 is too much of an increase compared to what is currently charged.
I hope that made sense. LOL I do understand that Bonz is entitled to increase its fees every so often to account for inflation. However, as I said above, 3.5% is a huge jump and there are very few items that will see a reduction in fees at that rate. We’re only talking about those items below $28 that will see a reduction, so there isn’t that much that Bonz would need to make up for.
So, while I don’t have time to play with my pricing at the moment, it doesn’t take long to do a little math to see that this increase is too drastic. I have never sold on eBay because of its ridiculous fee schedule, so I do not see this as beneficial compared to any other venue. What I’m looking at is the rate of increase compared to what we currently pay here.
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@Jedifford…in the case of Bonz, an upsell is when they provide a certain level of service at a certain rate, but at a higher rate for a higher level of service. For example, we’re allowed to upload 6 photos for our listings for free. An upsell would charge us a fee if we wished to upload more than 6. It’s just like when you go to McDonald’s and order a value meal at a certain price, but they offer you larger fries or a larger drink for so many cents more. Make sense?
Thanks for the feedback everyone. I appreciate the carefully articulated responses. For now we’re going to keep our shipping charge as is (unchanged), but I have passed your feedback onto Bill.
We are trying to strike the right balance between marketplaces that give sellers no shipping exemption and marketplaces that don’t include shipping at all (which can lead to unnecessarily high shipping costs being used).
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