EBay Lowers Fees for Fixed-Price Items

By Juan Carlos Perez
Wed, August 20, 2008

IDG News Service —

EBay said Wednesday it is dropping significantly the fees it charges merchants to list items, hoping to encourage the sellers to increase their marketplace inventory.

The move comes as a significant number of sellers seek alternatives to what they perceive as high costs and unfavorable commerce conditions, shifting items to competing marketplaces from rivals like Amazon.com and Overstock.com as well as to their own online stores.

The fee changes, due to take effect in September in the U.S., are the latest in a string of adjustments eBay has rolled out this year in order to jump-start transaction and revenue growth in its online marketplace.

In January, eBay announced a set of controversial changes that included rebalancing its fee structure and tightening standards for merchants, and that caused many merchants to cry foul.

The centerpiece of the new fee structure is a flat rate of US$0.35 for fixed-price "Buy It Now" listings in most categories and an extension of the listings' time length from seven to 30 days. EBay will also let merchants list multiple quantities of the same item for a single $0.35 fee.

Along with the listing reduction comes an adjustment on the commission fees, which will rise or fall depending on items' categories and sale prices.

The most impacted category is the one for books, music, DVDs, movies and video games, which will see an even lower flat-fee listing fee of $0.15, but higher commission charges. A full run-down of the new fee structure has been posted in this page.

While across-the-board fee changes affect merchants in different ways, depending on a variety of elements like item price and product category, eBay said it is confident that most merchants will see a drop in their eBay marketplace costs.

"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, in a statement.

Fees for products sold via auction remain unchanged from the latest changes applied to them earlier this year.

EBay also announced that starting in October it will no longer accept checks or money orders as it moves to what it calls "a fully electronic checkout process" that will rely on PayPal and credit card payments.

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