EBay mugs are seen on sale at eBay Inc. headquarters in San Jose, Calif., Wednesday, Oct. 17, 2007. 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.
(AP Photo/Paul Sakuma, file)By AMANDA FEHD, Associated Press
SAN FRANCISCO - Vendors who sell their goods on eBay are scratching their heads after the company unveiled a new fee structure in effort to boost listings and maintain its share of the online auction market it helped start a decade ago.
While eBay Inc. says more than 60 percent of its sellers will save money with the new plan, several sellers have crunched their numbers and consider the rejigging a fee hike.
"We call it eBay math, it's a different math than most other people's math," said Randy Smythe, who used to sell music and movies on eBay from Southern California.
Under the old rules, for example, selling a purse at auction 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.
EBay Inc. said Tuesday that it will cut the fees it charges to list items by 25% to 50% and increase the fees for sold items in an effort to improve the buyer experience.
The changes, which will be rolled out in eBay marketplaces worldwide, will become effective in the U.S. on Feb. 20.
EBay said it hopes the changes in its fee structure will encourage sellers to list more items and use more pictures in their listings -- and thereby possibly attract more buyers. The company said it is offsetting the reduction in listing fees by charging sellers more when they sell items. For example, the fee for selling an item that costs up to $25 will increase from 5.25% to 8.75% of the final sale price.
"Sellers prefer this structure, as it lowers their risk if an item doesn't sell," said John Donahoe, eBay's president and CEO-to-be, in his keynote address at the company's third annual eCommerce Forum in Washington. "Put simply, we will make more of our money when sellers are successful." Donahoe is succeeding President and CEO Meg Whitman, who recently retired.
EBay said it's also eliminating fees in the U.S. for its Gallery option -- a move that the company said should encourage sellers to include more photos of the items they are selling, a feature the company said buyers want.
In addition to the changes in its fee structure, eBay said it's changing the way it works with sellers. The company said sellers will be subjected to more stringent minimum standards in an effort to do away with behavior that causes buyer dissatisfaction, such as charging excessive shipping fees or not describing items accurately.
The company said it will begin that effort by lowering the exposure in its search results for sellers who have high rates of customer dissatisfaction. Conversely, Donahoe said eBay will begin increasing the search exposure for the listings of sellers who have the best customer satisfaction ratings.
by
Linda Rosencrance, Computerworld
SAN JOSE, Calif. - Meg Whitman, the Web-pioneering chief executive of eBay Inc., is preparing to retire after a decade at the helm of the online auctioneer, according to a published report.
The Wall Street Journal, citing unidentified people familiar with the matter, reported Tuesday that Whitman has been delegating more daily responsibilities and is working on a plan of succession. The paper says a decision about her departure could be made within weeks.
A call to eBay seeking comment Tuesday morning was not immediately returned.
EBay shares fell $2.03, or 7.2 percent, to $26.30 in premarket trading.
The Journal reported that John Donahoe, 47, whom Ms. Whitman recruited in 2005 to head eBay's auction business unit, has emerged as her most likely successor.
Few executives who helped pioneer the commercialization of the Internet have remained on top for as long as the 51-year-old Whitman. When she joined eBay in 1998, the company employed 30 people and had revenues of $86 million that year.
The company now employs 15,000 people and had $5.97 billion in revenues last year.
Whitman's retirement would come at a critical point for eBay. Although its divisions include PayPal electronic payment and ticket broker StubHub.com, the company's auction business — which accounts for more than two-thirds of eBay's annual revenue — has experienced slowing growth rates for the past few years.
Despite eBay's success, there have been missteps along the way.
In October, eBay announced it would take a $900 million write-down in the value of telecommunications division Skype. That charge, for what accountants call impairment, essentially acknowledged that eBay executives drastically overvalued the $2.6 billion Skype acquisition, completed in October 2005.
