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The Honolulu Advertiser
Posted on: Sunday, August 24, 2008

EBay to cut auction listing fees amid pressure from rivals

By Dan Gallagher
MarketWatch

SAN FRANCISCO — EBay Inc. says it is cutting some of its listing fees "dramatically" as the online auction giant responds to increasing competitive pressure from such rivals as Amazon.com.

Starting Sept. 16, eBay said it will charge a flat rate of 35 cents to list an item for sale under a new "Buy It Now" format, which eschews the traditional auction model and allows buyers to pay a fixed price for an item. That fee would cover a 30-day listing and could include multiple items; sellers had previously paid fees between 35 cents and $4 per item for a week.

"We aim to be the most competitive marketplace online, and this new, incredibly low pricing helps us achieve that goal," said Lorrie Norrington, president of eBay Marketplaces, according to a statement.

The company will still take a cut of the final value of goods sold. Most of these fees increased to offset the lowered insertion fee. These "final value" fees can range from 6 percent to 15 percent for most items.

The change by eBay does not affect items listed under its more traditional auction format. The company slashed fees for that category earlier this year.

The move comes as eBay is under growing threats from rivals — particularly www.Amazon.com. The e-tail giant has built a substantial business with third-party sellers, who market items under a fixed-price format that are often advertised alongside the same, new item offered for sale by Amazon.

Analysts say the fee change is unlikely to significantly boost eBay's position against Amazon in the near term.