Tuesday, January 10, 2012

Letter from Fred Thomas, President of Frame and Wheel about revised commission, listing and PAAS structure


The cost of excellence
The Year of the Dragon has started with a fire-breathing roar. There is a large and growing order book for the service and domestic and international demand is strong. I am very busy working on arranging and executing auctions of bicycles, frame sets, accessories and components. My commitment to providing the best images, descriptions and service on eBay requires time and diligence, and in order for to maintain this standard of excellence, the commission structure must be revised again. A new commission structure is effective 31 January 2012 and applies to all new business and old business that is not on site at that time. A revised Product Analysis and Service (PAAS) charge is also effective at that time. Thank you again for your business and patience and I look forward to working with you in 2012.
Sincerely,
Fred Thomas
President
Frame and Wheel, Inc.
Appendix 1: Summary of revisions
Revised Frame and Wheel Product Analysis and Service (PAAS) charge
Item
Revised ($)
Previous ($)
Change (%)
Bicycles and frame sets
25.00
20.00
25
Wheel set
20.00
10.00
100
Wheel
10.00
10.00
-
Components
5.00
5.00
-
Revised Frame and Wheel eBay Store Listing
Listing
Revised ($)
Previous ($)
Change (%)
Frame and Wheel eBay store listing
2.00
1.00
100
Revised commission structure
Revised

Final sale price
Final value fee
Item not sold
No final value fee
$0.01 to $50.00
25.0% of the final sale price
$50.01 to $1,000
25.0% of the initial $50.00, plus 20.0% of the remaining final sale price balance ($50.01 to $1,000.00)
$1,000.01 or more
25.0% of the initial $50.00, plus 20.0% of the next $50.01 - $1,000.00, plus 15.0% of the remaining final sale price balance ($1,000.01 – final sale price)
Previous 

Final sale price
Final value fee
Item not sold
No final value fee
$0.01 to $50.00
20.0% of the final sale price
$50.01 to $1,000
20.0% of the initial $50.00, plus 15.0% of the remaining final sale price balance ($50.01 to $1,000.00)
$1,000.01 or more
20.0% of the initial $50.00, plus 15.0% of the next $50.01 - $1,000.00, plus 10.0% of the remaining final sale price balance ($1,000.01 – final sale price)
The revised commission structure
According to the the revised commission structure, Frame and Wheel charges 25% of the final value price for items that sell between one cent and fifty dollars. For items that sell between fifty dollars and one thousand dollars, Frame and Wheel charges 25% of the first fifty dollars plus 20% for the difference between the final value price and the first fifty dollars threshold. 
Finally, for items that sell for more than one thousand dollars, Frame and Wheel charges 25% on the first fifty dollars, 20% of the difference between one thousand dollars and fifty dollars, and 15% on the difference between the final value price and the one thousand dollar threshold. 
Frame and Wheel’s commission is structured so that the higher the final value price, the lower the commission in percentage terms. Conversely, the lower the final value price, the higher the commission in percentage terms. This means that more proceeds are returned to the seller on larger more valuable items such as frame sets and complete bicycles.
Appendix 2: Impact on proceeds to client from revised commission structure
Impact on Net Proceeds Returned to Client from revised commission structure
Item
Final value price ($)
Revised (%)
Previous (%)
Percentage change (%)
Crank set
26.00
53
61
(14)
Wheel
610.00
70
76
(7)
Frame set
1,211.00
73
78
(7)

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