Ricardo increases its fees for selling online

Posted on Categories Frugality, News, Side Hustle, Switzerland
Ricardo increases its fees for selling online

I’m selling a lot of things online. For this, the main site I’m using is Ricardo. This is an auction website. You set a start price and an optional instant price and people can bid on your item. The highest bidder will win after a set time for the auction. I’ve found out Ricardo to work quite well for my needs. I’ve made several hundreds of Swiss francs on this website.

However, Ricardo is not free. You pay some fees to sell your things online. Even though I would prefer using a free service, I found out that my things sell better on Ricardo than on free alternatives. Yesterday, Ricardo just announced that they updated their fees. The new fee model will be active from September 13th. In this post, I’m going to describe the changes and exactly what this means for you if you want to sell things online on Ricardo. We are going to look at when you are actually saving money compared to before and when you are losing money.

What changed ?

There are two main differences. They changed the publication fees. These are the fees you pay when you start your auction. You pay them regardless of if the item was sold or not. And they also changed the closing fees. These are the fees that you pay in case of successful sale.

Ricardo previous publication fees
Ricardo previous publication fees

Let’s start with the publication fees. You can take a look at the above image to see the previous publication fees. Before, the publication fees were ranging from 0.05 CHF to 2.50 CHF based on the price of the item you were trying to sell. Now, the publications are free! They removed the basic publication fee. If you use options to improve the visibility of your auction, you will still have to pay. But I never use visibility options. This is a great news!

Now for the closing fees. Before, the closing fees were 8% of each successfully sold auction. And there was a maximum of 40 CHF fee. Now the closing fees are 9% of the selling price with a maximum of 190 CHF. This is definitely a bad news. 1% increase may not seem much, but that is a 12.5% increase in fees. This is a really significant increase!

Another important change was made about professional sellers. Before, professional sellers had different closing prices depending on which category they were selling. And they had lower maximums for the fees. Now, everybody has the same fees. I’m not going to go into details for professional sellers, but it’s easy to do the math.

When is it better ?

There are two cases when it’s now better than before!

First of all, it’s obviously better than before when your item didn’t sell. For instance, if you fail to sell an item with a base price of 50 CHF, you would have had to pay 0.40 in fees before. Now, you don’t have to pay anything. This is great.

You can also save some fees when you the initial fee (before) is higher than 1% of your selling price. For instance, you start with a selling price of 10 CHF and sell for 20 CHF. Before you would have to pay 1.90 CHF and now only 1.80 CHF. This is not a great gain unfortunately.

When is it worse ?

If you do some math, you’ll see it’s almost always worse than before. The initial publication fees before were quite little compared to the closing fees. Increasing the closing fees by more than 12% is actually making most of your auctions more expensive!

Let’s see with a few examples:

  • Auction start at 20 and sell at 50. You pay 4.50 instead of 4.30, 4.6% increase in fees
  • Auction start at 20 and sell at 100. You pay 9.00 instead of 8.30, 8.4% increase in fees
  • Auction start at 50 and sell at 60. You pay 5.40 instead of 5.20, 3.8% increase in fees
  • Auction start at 50 and sell at 100. You pay 9.00 instead of 8.40, 7.1% increase in fees
  • Auction start at 50 and sell at 200. You pay 18.00 instead of 16.40, 9.7% increase in fees

As you can see, the increase in fees can be significant. And it gets worse and worse the higher you sell! You should consider that all your auctions are now more expensive than before.

And they also changed the maximum that you can pay in fees! For me, this is not a problem since I’m not selling anything expensive on Ricardo. But imagine the following case:

  • Auction start at 500 CHF and sell at 1000: You pay 90 CHF instead of 41.20 CHF! This is  118% increase in fees!
  • Auction start at 1000 CHF and sell at 5000 CHF: You pay 190 CHF of fees instead of 42.50. This is a 347% increase in fees!

As you can see, in the worst case, the new update in fees can make a very significant difference. You can end up with more than four times the fees that you were paying before!

Since professional sellers had a maximum lower than 40 CHF, this can get even worse for them. The minimum fee for the Media category was only 10 CHF before. This is not 19 times more expensive! And the minimum closing fee for professionals was 5%, this is almost doubled now!

Summary

Overall, this is not a good move for us. Almost every auction that you will sell on Ricardo will be more expensive. The only actual time you save money is when you don’t sell your auction. This is good, but not really important since you want to sell them directly. And you are going to put them back to sell probably.

I think it’s not a smart move for Ricardo. They will generate more revenue on each sale of course, but I’m pretty sure they are going to lose customers. As I said in the post, the new fees are even worse for professionals than for normal sellers. I don’t know the details, but I’m guessing that they are generating a good share of Ricardo’s revenues. I would totally expect them to lose professional customers as well. As I said, the increase can result in several times higher fees for professionals.

This is really a bad move from Ricardo. Especially considering that their mail to me was titled “Removal of publication fees”. This is marketing bullshit. It should have been titled “Overall increase of fees”. Maybe they are expecting that people can’t do basic math. But hey, who said any company was still honest today ;)

After this increase, I’m definitely going to consider other platforms for selling my stuff online. For the next things I have to sell, I’m going to try to put them all on Anibis. In the past, I wasn’t very successful on it, but since it’s free, I’m going to give them a chance again.

What do you think about this change ? Which platform do you use for selling things online ?

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