Wednesday, July 19, 2006

eBay Raises Fees for Store Inventory Listings By 150%-500%

eBay, the number one online marketplace in the world, is now charging additional fees for its Store Inventory listings. Store Inventory listings accounts for roughly 83% of all listings on eBay USA. The fees seem to be a move to "discourage" Store Inventory listings and encourage more Auction type listings. eBay makes more money through Auction Type listings than Store Inventory listings.

According to Bill Cobb's email that he sent me (President of eBay North America), the following changes will be applied starting Aug 22nd:

  • These Store Inventory format insertion fees take effect Aug. 22, 2006:
Starting Price New Insertion Fee Current Fee
$0.01 -- 24.99
$25.00 and higher 10¢
  • Some Store Inventory format final value fees also will also increase, effective Aug. 22, 2006:
Selling Price New Final Value Fee Current Fee
$0.01 -- 25.00 10% 8%
$25.01 -- 100.00 7% 5%
$100.01 -- 1,000.00 5% (no change) 5%
$1,000.01 and higher 3% (no change) 3%
Sellers Enraged

While this change really doesn't affect buyers that much, sellers are a rampage. This unpopular decision has already started a string of protests on online community boards.

Sellers like kcskorner posted the following: "I will probably sell off a good deal of what I have and close my store. What's the sense? They take away the search function and now raise the fees? I hope they shoot themselves in the GD foot. -Cheryl"

Another seller (jfcarr-lkcarr) stated: "My plan is to close my eBay store on August 21. It just won't be profitable enough to even offset fees after that. I may occasionally list auctions if I run across any high profit/high price item but that's it."

Another seller ( stated: "Bascially, eBay has just DESTROYED our business. Auctions NEVER worked for me, only eBay Stores."

Another seller (haplo127x) had this reaction: " I just marked Aug 21nd as D-day on my calendar. That's D for departure. "

A profound statement by seller unique-insights: "Because of this, I will be officially closing my store at the end of this month. Sorry eBay, 150%-500% fee increase doesn't work for me on the justification that you just need better quarterly earnings to have a better stock rating. I'm a store owner and a share holder -- though my .02 cents listings aren't helping you, my monthly store fees more than makes up for it. You're already making profits, why does the hand that feed you need to be continued to be punished? "


This latest move by eBay is understandable -- they need to continue to please Wall Street in order to show that they are growing. That pressure comes directly from the shareholders (like me) and Wall Street analysts.

The underlying question that will be answered in the next few months, will this move save eBay's quarterly woes and bring in more earnings or will this be a nail in the coffin?

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