Buying
by Verne Kopytoff
EBay Inc. said Tuesday that it will slash the fees it charges sellers to list items as part of an effort keep the online marketplace's increasingly critical users from defecting to rival Web sites.
The move is in response to complaints that the San Jose company charged sellers too much up front. Instead, eBay said it will increase the fees it collects from merchants after an item is sold, reducing their risk if a product fails to find a buyer.
The tweaks to eBay's fees will go into effect Feb. 20.
The adjustments to eBay's fees were among a series of changes the company announced Tuesday in hopes of restoring its luster, following two years of slowing growth. Executives acknowledge that they have been slow in fixing some of the Web site's problems, which have led to a depressed stock price and user dissatisfaction.
Tuesday's announcement was signaled last week by John Donahoe, eBay's president of marketplaces, who is slated to replace Meg Whitman, the company's longtime leader. His ascendancy has coincided with a more aggressive approach at eBay, which was never known for making sweeping changes.
"Consumers have more choices than ever, and they expect more when they shop online today," Donahoe said in introducing the initiative to a group of top North American sellers. "We're serious about making eBay easier and safer to shop."
EBay said that sellers will pay up to 25 percent less to list an item for auction and up to 50 percent less to list an item for sale in an eBay store.
For example, auctioning an item with a starting price of between $10 and $25 will cost an average user 55 cents, a savings of 5 cents. However, the commission for that item, if it sells for under $25, will rise 67 percent to 8.75 percent.
Jeetil Patel, an analyst for Deutsche Bank, said that the price changes - rather than saving sellers money - will actually cost them dearly. Sellers who specialize in items under $40, in particular, will end up paying eBay more and likely will flock to rival Amazon.com, he said in a research note Tuesday.
"As opposed to dramatically lowering listing fees (and almost completely aligning its business model with those of sellers), the company appears to have dramatically raised fees again," Patel wrote.
Usher Lieberman, an eBay spokesman, responded by saying, "The great majority of sellers will see their fees go down, and certainly our very best sellers, those providing great customer experiences - they should see a reduction in their fees."
In addition to the changes in listing and sales fees, eBay said it will make it free to include photos of products for sale, which it said elicit more buying.
EBay also took aim at fraud and bad customer experience on its site, saying it will give sellers with better feedback ratings higher placement in its search results. Sellers who have poor customer ratings for charging excessive shipping fees or describing items inaccurately, among other things, will appear less prominently as a way to encourage them to improve their behavior or leave the site.
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