The popular online marketplace eBay has recently scrapped fees on private sales of second-hand clothing. What impact will this have on your small business? Let’s take a closer look…

If you sell products online, you’ll know how important third-party platforms like Amazon and eBay can be. With their own audiences and digital storefronts, these platforms promise sellers a potentially lucrative new revenue stream – but only if you pay the required fees and stick to their rules. 

When you become a business seller, you have to accept that fees are part of your ROI calculations. They’re inherent to every large third-party platform, but some are more costly than others. 

With its latest move to scrap fees on secondhand clothing for private sellers, eBay has left some business sellers feeling ignored. At Crunch, we’re committed to helping sole traders and small businesses optimise their finances, so we’re taking a closer look at what this change could mean. 

How does this new eBay change work?

This new eBay policy allows private sellers to list and sell “pre-loved” clothing without incurring the usual 12.8% fee. The move aims to disrupt the second-hand clothing market and is clearly aimed at platforms such as Vinted and Depop.

It seems that eBay’s decision is an attempt to attract more casual sellers who want to sell unwanted items from their own wardrobes. However, because eBay allows both new and used items to be sold under the pre-owned category, this move raises many questions about the genuine intentions of private sellers and the nature of the second-hand market. 

The change has clear benefits for private sellers who will now enjoy higher profits from every sale – but it is worrying for anyone who has invested the time, effort and money into building a business account on the platform. 

What it means for business sellers

eBay’s changes are frustrating for business sellers, who continue to pay fees even on the same category of clothing. Since private sellers can list new and used items in this fee-free ‘pre-owned’ category, many business sellers question the purpose of selling professionally on eBay. 

Business sellers contribute significantly to eBay's revenue through professional listings and consistent sales volumes, but they receive no equivalent support and have to sit by and watch as private sellers throw up fee-free listings even when selling new products they can class as ‘pre-owned’. 

Ultimately, the change means that business sellers who stock second-hand clothing of any kind will face new competition from private sellers – some of which may even be businesses posing as private accounts to dodge fees. 

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What does this change mean in the long term? 

Though the introduction of a fee-free option might seem like a win for sustainability and consumer choice, it also raises questions about eBay's long-term strategy. 

How does eBay plan to balance its appeal among casual sellers without alienating the business community that relies on its platform for livelihood? Many business sellers on eBay’s own discussion boards are now talking about whether it’s better to simply open a private seller account and risk being penalised for dodging the fees. 

As eBay looks to maintain a competitive edge against other second-hand marketplaces, it must readdress the business seller balance or risk alienating sole traders even further. 

To rebalance the equation, eBay needs to enhance support for business sellers, perhaps by offering differentiated services that help these users grow their businesses, such as advanced analytics, marketing tools, and more personalised customer support. Additionally, creating more transparent communication channels where sellers can voice concerns and receive feedback could help mitigate feelings of neglect.

Is eBay still a good choice for sole traders?

In many ways, these new changes make it clear that eBay is targeting private sellers over businesses. Scrapping fees for such a versatile product category may also tempt new business sellers to break eBay’s rules by listing as a private seller rather than as a business. 

Business sellers are rightly frustrated with the lack of support they receive from the marketplace. As eBay continues to adapt to a changing market, it must consider the needs of its stakeholders and business customers, as well as the private market. Most important, perhaps, is the need to identify private sellers who are actually selling in a business capacity. 

Despite all of this, eBay does remain a strong option for businesses looking to diversify their sales channels. Business accounts may have to pay fees, but there are useful tools you can leverage to win more customers. 

As you grow your online selling business, tracking income from various channels and determining profits for tax purposes can become a challenge. Choose CrunchONE as your accountancy platform and we’ll keep track of it all for you – helping you make crucial decisions based on financial data, including whether eBay selling is worth it for you. 

Make sure you check out our HMRC eBay tax guide to help you understand what you need to pay and declare when you're selling on eBay.