EcommerceBytes-NewsFlash, Number 1198 - January 19, 2006     1 of 3

eBay Fee Changes, New 'eBay Express' Site

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eBay announced changes to seller fees, effective February 22, 2006, on the same day it announced fourth quarter 2005 financial results (see related article). Listing fees remain unchanged except for items listed at a starting price of under $1, which will decrease from 25 cents to 20 cents. The Final Value (commission) fee will increase for all items that end with a selling price of $25 or more.

In addition, eBay announced changes to eBay Stores. All matching Store items will be displayed at the end of any eBay search. This will increase exposure to Store items and will launch in a few weeks (http://pages.ebay.com/sell/announcement/overview/inventory.html). Currently, the main eBay search tool brings back Store items only when fewer than 21 auction or fixed-price items from the core platform (non-Store items) are returned in results, and in that case only returns a maximum of 30 Store items.

eBay will also rollout a new structure that allows eBay Storeowners to have up to 300 custom categories in three levels of categories and sub-categories instead of the current 19 categories with only one level.

eBay also said it will introduce a new specialty site called eBay Express in the Spring. eBay Express will contain Store and fixed-price listings from U.S.-based sellers on eBay.com that can be purchased right away. eBay Express will contain a shopping cart, and buyers will be required to use PayPal or a credit card to make a purchase. Only sellers with a 98 percent positive feedback score of at least 100 will be eligible to sell on eBay Express, and they must also accept PayPal.

According to eBay CEO Meg Whitman in an earnings conference call on Wednesday afternoon, eBay Express leverages Shopping.com's catalog technology. She said it offers buyers a quick and easy way to search and purchase fixed-price items and uses "Magellan" search technology. This technology was tested on eBay.com in May during an alpha test called "New Way to Shop on eBay." It utilized Item Specifics, eBay's term for product attributes, to help shoppers find what they are looking for by making keyword searches more intuitive and providing ways to narrow listings results according to size, color, type, brand, or even a combination of attributes.

One seller said she was excited about eBay Express because immediate payment meant there would be no deadbeat buyers, and she felt shoppers would feel safer due to the higher feedback ratings eBay will require from sellers on eBay Express. Another seller liked eBay Express, though she suspected eBay would charge sellers extra for inclusion in the future.

Sellers were furious with eBay when it increased fees one year ago (http://auctionbytes.com/cab/abn/y05/m01/i18/s01). The nature of this year's increases are different and appear to have a significantly less painful impact on sellers' pocketbooks. eBay likely planned its news carefully this year to avoid the public hue-and-cry from sellers heard for months after last year's announcement.

With next month's fee changes, the higher the selling price for an item over $25, the bigger the difference in commission fees. For example, an item that sells for $50 on eBay today costs $2 in commission fees and will cost $2.06, a difference of 6 cents, when the new fees take effect. An item that sells for $1500 today incurs a commission fee of $35.62. Under the new fee structure, sellers will pay $38.06 in commission fees, $2.44 higher.

eBay also announced it is making Picture Show and Sales Reports Plus free to all sellers, and also introduced some package deals of optional features. The Value Pack consists of Gallery ($0.35), Subtitle ($0.50) and Listing Designer ($0.10) for a bundled price of $0.65. The Pro Pack consists of Bold ($1.00), Border ($3.00), Highlight ($5.00), Featured Plus ($19.95), Gallery Featured ($19.95) for a bundled price of $29.95.

http://www2.ebay.com/aw/core/200601181327302.html


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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