eBay Cuts Listing Fees and Boosts Commission Fees = Follows Amazon Model...Sort Of!

So the competiton is heating up and no longer is eBay the only kid on the block...but then most of us knew that already.  I have posted below a full article on what eBay announced today, or <<<CLICK HERE>>> to read about their new pricing strategy.

Fierce competition exists among new online shopping comparison sites and the "old guard" shopping sites as eBay.com, Shopzilla.com, PriceGrabber.com, Shopping.com, Amazon.com and Yahoo! Shopping, to name just a few.  For a good list of over 100 shopping comparison sites, with whom you can work, check out MerchantAdvantage.

Online retailers have known about other market places and shopping comparison sites to list their product catalog to reach consumers for sometime and they have done fairly well using these other sites, in addition to listing on eBay.com. 

Now eBay is feeling the pressure, especially from Amazon.com, which does not charge listing fees but rather "high" commissions on sales, and is responding to the marketplace as revenues have "flat lined" at eBay and online retail listings have followed, with only a 4% increase in the 4th quater last year, which reverses two Q's of declining listings.

All in all, competition is good for the the online retail marketplace, and the consumer, so I am glad to see eBay react and try to rebuild their following and attract new online merchants into their family.

I personally think that the recent declines, and now restructuring, at eBay are not signs of the demise of online shopping but rather a direct response to unique, and sometimes better, shopping experierneces and business models offered by new shopping sites.  Check out the blog entry below about Ciao.com as an example of what I am talking about!

Happy shopping and listing and work with eBay -- they are great and I think with this new pricing model, any online marchant can better manage and increase their return on investment. 

And one special note, this fee restructuring generally benefits the larger seller with lots of SKUs and might not be the best deal for the "onesy-twosy" sellers (which mind you used to be the heart and soul of the "original" eBay) who will have to pay higher commissions on a small SKU count.

And if you need some help with your eBay listings give us a shout, we support and can feed your product to an eBay Storefront.  Just click here and call us to help....MerchantAdvantage

-- Chip

<<<CLICK HERE>>> for full article, or read below

SAN FRANCISCO, California (AP) -- EBay Inc. said Tuesday it will cut by up to 50 percent the fees it charges sellers to list their goods online, in an effort to boost listings and keep pace with other burgeoning e-commerce sites.

To balance the fee cut, the company plans to increase its commission on items that do sell, a method the company says sellers prefer because it lowers their risk if items do not sell.

The greatest fee increase will come for goods selling for less than $25. EBay's fee for those transactions will rise 67 percent, to 8.75 percent of the final sale price.

"A majority of sellers will see their fees go down," said company spokesman Usher Lieberman. "We are basing our success on their success and we want to encourage sellers to list more items with us."

The new fee structure, announced to a gathering of 200 of eBay's top North American sellers in Washington, goes into effect February 20 in the United States. More pricing changes are coming shortly in the United Kingdom and Germany.

EBay has struggled with flattening growth in recent years and a temporary drop in the number of items for sale on its site.

Listings on eBay's various sites in the fourth quarter rose 4 percent, reversing two straight quarters of declines, the company reported last week. The number of people actively using the site has also stagnated, rising just 2 percent from a year ago.

The online auctioneer has faced increasing competition from other e-commerce sites such as Amazon.com, which does not charge a listing fee.

EBay's various fees have long been a point of contention for its sellers, which range from mom-and-pop vendors to online stores with large inventories.

The changes come as longtime chief executive Meg Whitman announced she would retire at the end of March. Incoming CEO John Donahoe, 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.

Along with changes to the fee structure, eBay said it will change how sellers show up on customer searches. Those with high rates of customer dissatisfaction will get lower exposure in a search, the company said.