Now that eBay has stopped allowing sellers to charge buyers for insurance except in a few categories, many sellers are in a dilemma.

At first thought, you might say it seems quite simple---if it is a pricey item, then a seller should factor in the cost of insuring it into the cost.

But it isn’t that simple, folks.

The problem, in a nutshell, is this:

If you are an eBay seller and you list an item in the auction format, as opposed to Buy It Now/Fixed Price, you really have no earthly way of knowing how much said item will ultimately bring when the virtual hammer drops on that auction.

On eBay, one simply never knows.

It’s all about supply and demand, much like other sales. Except in an auction venue, if there is one item supplied and two people who want it…..then obviously the demand exceeds the supply and this is how bidding wars get started.

A bidding war is a wonderful, much hoped for event for a seller, of course. 

But when you have no idea how much money your widget might end up selling for, it’s hard to know whether to insure it or not, much less an amount of insurance. 

Therefore, factoring in the cost of insurance into the selling price is an iffy proposition, to say the least.

Sellers must decide how much they are personally willing to lose by NOT paying for insurance on a widget.

For instance, if your personal cut-off is $50 uninsured risk, meaning that this is the maximum amount you want to cover out of your own pocket if the item is lost or damaged in the mail, and your minimum bid or fixed price is $75 for every item you sell on eBay, then you will obviously need to factor in the amount of insurance for that $75.

Auction format doesn’t lend itself to doing this as you don’t know what the final sale price will be.

What was eBay’s motivation for doing this?

It seems fairly straightforward. 

By stopping sellers from collecting insurance from buyers, eBay is counting on many sellers factoring in the cost of insurance into the selling price. Hence, more money for eBay in fees.

Will there be no end to the ways that eBay shafts its sellers?

Probably not in the foreseeable future.