January 27, 2010

EBay Announces New Fee System

EBay announced Tuesday that it is planning to take a cut of the final selling price and get rid of its "listing" fees in hopes of luring more sellers.

The electronic commerce website has been tampering with its fee structure in recent years, trying to improve the experience people have on the site and reinvigorating its growth. 

Tuesday's announcement is meant to encourage more people to list items for sale.

EBay said that starting March 30, sellers will be able to post up to 100 items for auction every 30 days without paying fees to list items.  The items will have a starting bid of less than $1, and when they sell eBay will take 9 percent of the final price or $50, whichever is less.

The San Jose, California-based company currently allows sellers to auction up to five items for free every 30 days, and charges them 8.75 percent of the final price or $20, depending on which is less.

For some sellers, this change could mean that they will pay more.  However Lorrie Norrington, the president of eBay Marketplaces, says the change will be easier overall for people that wish to auction off items that are sitting around the house.

"Our customers have consistently told us, `We love free and we love simple,' and that's what we think these changes are about," she said.

EBay made similar changes in its European markets in 2008, which Chief Executive John Donahoe said was a successful system.

Once a seller exhausts the number of items they can list for free, they are subject to listing fees and commissions. 

EBay is reducing the fees it charges sellers for offering fixed-price "Buy It Now" items through stores that run on its site.  These sellers will pay 3 cents and 20 cents to list an item, which is down from 35 cents previously.


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