EBay Waives Some Listing Fees, But Changes Commission Fees
16 Juin 2009 - 11:32PM
Dow Jones News
In an apparent bid to attract new sellers, troubled e-commerce
giant eBay Inc. (EBAY) said Tuesday it will waive some listing fees
for people who want to auction goods on the company's marketplaces
platform.
San Jose, Calif.-based eBay, which is struggling to compete with
Web retailers such as Amazon.com Inc. (AMZN), said sellers would be
able to list five products for auction every 30 days without having
to pay up-front listing fees.
But the move could prove ineffective because the new pricing
structure may actually cost sellers more in commission fees than
under the previous pricing structure, depending on the auction
starting price and final selling price.
EBay has in the past year come under intense criticism from
small sellers who have grown disenchanted with fee changes that
made it easier and cheaper for bigger merchants to list products in
large quantities.
Critics have argued those changes, part of the company's ongoing
turnaround strategy, have transformed eBay from a quirky online
auction market into a high-volume fixed-price retail site.
The company said it hoped Tuesday's changes would attract new
sellers to try the site without upfront costs.
"By eliminating the upfront costs of selling on eBay, we hope
this new structure will encourage all sellers - new, occasional or
experienced - to use the offering as a cost-effective way to sell
on our site and earn a little extra cash," said Lorrie Norrington,
president of eBay's marketplaces unit.
The company typically charges listing fees, known as "insertion
fees," of 10 cents to $4 for items put up for auction on eBay,
whether or not those goods are sold. Those fees, which depend on
the value of any particular item, will still apply when a seller
exceeds more than five listings within the 30-day period. The
company will also continue to use a tiered system to calculate
commission fees on all items sold.
Items that aren't subject to listing fees, however, will be
subject to a flat 8.75% commission, up to $20, meaning that, in
some cases, sellers could end up paying higher fees than they would
have under the tiered system.
EBay is in the midst of a multi-year effort to turn around its
ailing marketplaces business, which last year generated more than
half of the company's $8.5 billon in annual revenue. Ebay also
operates online payments unit PayPal and Internet telephony
division Skype.
The company's marketplaces business has suffered as online
shoppers gravitate to rivals such as Amazon, which offers
fixed-priced items and free shipping. Ebay recently told investors
it will focus on the "secondary market," which includes
out-of-season and overstock goods, as one-of-a-kind used and
antique items.
On Tuesday, eBay shares fell 1% to $17.23.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118;
scott.morrison@dowjones.com