eBay slashes fees by 50%

30 January 2008 10:47 GMT / By Katie Scott

eBay is to slash the fees that it charges sellers to list their goods online by 50%.

The move is hoped to encourage more listings on the site in face of increasing competition from other e-commerce sites.

To counter the fee cut, the company is planning on increasing its commission on the items that sell - a method eBay claims its sellers prefer because otherwise they pay even if items do not sell.

The e-commerce site is also to increase the fees on specific items, including auctioned goods that sell for less than $25. The fee for those transactions will rise 67%, to 8.75% of the final sale price.

Incoming chief executive John Donahoe told a gathering of 200 of eBay's top North American sellers in Washington:

"eBay is at a crossroads. To maintain our leadership position in e-commerce, we can no longer make incremental changes. We need to redo our playbook and we need to do it fast. We need to take bold action to meet the expectations of buyers and sellers around the world," reports CNN.

He added that photo fees also will disappear, as eBay has realised that they were a deterrent for sellers wanting to post pictures of their goods.

The new fee structure will be effective as of 20th February in the United States, as then roll out to Britain and Germany.

eBay is also to change how sellers show up on customer searches, so that those with high rates of customer dissatisfaction will get lower exposure in a search.

CNN adds that listings on eBay's various sites in the fourth quarter rose 4%, reversing two straight quarters of declines.

It continues that the number of people actively using the site has also stagnated, rising just 2% from a year ago.

The changes come as longtime CEO Meg Whitman announced she would retire at the end of March.

Her successor, Donahoe, currently president of eBay Marketplaces, which encompasses its shopping sites and classifieds, has said he will aggressively change eBay's product, customer approach and business model.

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Software, Websites, Online, eBay