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eBay Restructures Fees to Revive Ailing Auctions

The day after eBay CEO John Donahoe revealed that auctions were down 9% in the first quarter, the company announced fee changes designed to revive them. eBay is basically forcing lower-volume sellers in certain popular categories such as collectibles and clothing to list in the auction format.

The fee changes only impact those sellers who don’t pay a monthly fee to subscribe to an eBay Store. The new fee structure goes into effect on May 15, 2014.

In a nutshell, eBay is taking away the 50 free listings that non-Store subscribers could use towards auctions or fixed price listings in almost any category; and instead it is giving them 100 free listings – but 50 of them can only be used to list in auction format in 14 categories including Clothing Shoes & Accessories and Collectibles. The other 50 can be used to list in auction format in any category, or in fixed-price format – but only in other categories – they can’t be used to list fixed-price goods in the 14 categories listed.

That means non-Store subscribers no longer get 50 free fixed-price listings in Collectibles, Pottery & Glass, Sports Memorabilia, etc.

For sellers who list collectibles or clothing in auction format, it looks like excellent news – they get 100 free auction listings instead of 50. For sellers who list fixed-price in those 14 categories, it looks like bad news. One seller said they would list in auction format to get their free listings, but would start the bidding at a high starting bid. (Whether eBay may try to close that loophole is anybody’s guess.)

Sellers reacted on the eBay boards, some panicking, some pointing out that eBay broke its promise to give them 60 day’s notice of major changes – in this case, eBay is giving sellers 2 weeks to prepare.

When asked why eBay chose not to give sellers 60 days notice about fee changes, instead giving them 2 weeks’ notice, eBay spokesperson Ryan Moore said, “While we strive to give sellers as much notice as possible, we wanted to make this change as soon as possible to benefit our sellers in these specific categories.”

Auction-style listings are the best way for many sellers to sell in popular categories like Fashion and Collectibles & Art, according to eBay’s announcement on Wednesday. The problem eBay doesn’t mention is that if a listing gets few bids, an auction listing could sell at a price far lower than the value of the item.

The standard insertion fee for fixed-price listings remains at 30 cents per listing. That means sellers who choose to continue to list in the fixed-price format in the 14 categories affected by the fee change will see a fee increase of up to $15/month, or $180/year.

During Tuesday’s first-quarter earnings call, eBay’s CFO Bob Swan said, “Fixed price represents 76% of our business grew 19%, but auction volume declined 9 points due to changes in consumer preferences and slower consumer selling.” The fee changes are clearly meant to revive auction listings.

You can read the full announcement on the eBay website.

Comment on the EcommerceBytes Blog.

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Ina Steiner
Ina Steiner
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. See disclosure at EcommerceBytes.com/disclosure/.