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The Honolulu Advertiser
Posted on: Wednesday, January 30, 2008

EBay announces new pricing structure for selling items

By Amanda Fehd
Associated Press

Hawaii news photo - The Honolulu Advertiser

EBay Inc. said yesterday 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.

ASSOCIATED PRESS FILE PHOTO | October 2007

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SAN FRANCISCO — EBay Inc. is rejiggering its fees — raising some, trimming others — to meet rising competition and maintain its share of the online auction market it helped start a decade ago.

But those who keep tabs on the Web site, including its top sellers, say the changes are a step in the wrong direction.

"It's too little too late," said Steve Grossberg, one of eBay's top 100 sellers and the founder and president of the Internet Merchants Association.

Grossberg, a Florida-based vendor of video games, spoke by phone from a conference of 200 of North America's top eBay sellers in Washington, D.C., where incoming CEO John Donahoe announced the fee changes yesterday. EBay makes 80 percent of its revenue from the top 20 percent of its sellers.

"I think you are going to see a listing decrease, you are going to see some sellers leave the site or pull back quite a bit and think of other ways to make revenue, and it's going to backfire," Grossberg said.

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 stagnated, rising just 2 percent from a year ago, while revenues have risen modestly.

The price changes, which take effect Feb. 20, are complex. It will cost 25 percent less to list an item for auction and up to 50 percent less to offer something for a fixed price. EBay's commission on items sold for fixed prices over $100 will also decline.

Its commissions on auction items selling for more than $1,000 will remain at 1.5 percent, while its commission on cheaper items will rise as much as 67 percent.

Under the old rules, for example, a purse auctioned for $25 would have cost the seller $1.91, including 60 cents for listing the item plus eBay's commission of $1.31. Under the new structure, the seller would pay $2.74, including 55 cents to list the item plus a higher commission of $2.19.