EBay Lowers Listing Fees to Boost Sales

EBay Inc. said Tuesday it will cut by up to 50 percent the fees it charges sellers to list their goods online, in an effort to boost listings and keep pace with other burgeoning e-commerce sites.

To balance the fee cut, the company plans to increase its commission on items that do sell, a method the company says sellers prefer because it lowers their risk if items do not sell.

The greatest fee increase will come for goods selling for less than $25. EBay's fee for those transactions will rise 67 percent, to 8.75 percent of the final sale price.

''A majority of sellers will see their fees go down,'' said company spokesman Usher Lieberman. ''We are basing our success on their success and we want to encourage sellers to list more items with us.''

The new fee structure, announced to a gathering of 200 of eBay's top North American sellers in Washington, goes into effect Feb. 20 in the United States. More pricing changes are coming shortly in the United Kingdom and Germany.

EBay has struggled with flattening growth in recent years and a temporary drop in the number of items for sale on its site.

Listings on eBay's various sites in the fourth quarter rose 4 percent, reversing two straight quarters of declines, the company reported last week. The number of people actively using the site has also stagnated, rising just 2 percent from a year ago.

The online auctioneer has faced increasing competition from other e-commerce sites such as Amazon.com, which does not charge a listing fee.

EBay's various fees have long been a point of contention for its sellers, which range from mom-and-pop vendors to online stores with large inventories.

The changes come as longtime chief executive Meg Whitman announced she would retire at the end of March. Incoming CEO John Donahoe, president of eBay Marketplaces, which encompasses its shopping sites and classifieds, has said he will aggressively change eBay's product, customer approach and business model.

Along with changes to the fee structure, eBay said it will change how sellers show up on customer searches. Those with high rates of customer dissatisfaction will get lower exposure in a search, the company said.

via WSJ

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