eBay announces Price Changes

eBay Incorporated plans to lower fees for listing items, raise minimum selling standards, and offer its best sellers incentives and discounts. To improve the buying experience, the company announced it is making changes in three major areas that influence seller behaviour: fee structure, seller incentives and standards, and feedback. The fee changes, which vary by country, are intended to encourage sellers to list more items and use more pictures in listings. The online auction leader is also setting the bar higher for sellers who aspire to its PowerSeller program: qualified PowerSellers will receive valuable fee discounts and better payment protection from PayPal.

Starting February 20 in the U.S., eBay is reducing its fees to list items (called "Insertion" fees) by 25-50%. eBay is balancing that change by increasing the fees it charges when an item is sold (called "Final Value" fees). Sellers prefer this structure, as it lowers their risk if an item doesn't sell. The company is also eliminating fees in the U.S. for its Gallery option, which should spur sellers to include more photos of the item for sale.

The company is also making its minimum standards more stringent for anyone who sells on the site and will begin requiring a safe payment option, such as PayPal or a major credit card, for sellers who have lower rates of customer satisfaction or who sell in categories that have a high number of buyer complaints.

eBay will begin decreasing search exposure for the listings of sellers who have high rates of customer dissatisfaction, while increasing search exposure for the listings of sellers with the best buyer satisfaction ratings. As well, the company plans to update its feedback system to reinforce healthy, vibrant trading and keep bringing buyers back to eBay.

"Consumers have more choices than ever, and they expect more when they shop online today. We're serious about making eBay easier and safer to shop. It is our intention to reward great sellers. Sellers that describe items accurately, ship on time, and ship at a fair price will enjoy preferential pricing and discounts on eBay. We think this will significantly improve the buyer experience overall," said John Donahoe, the President and CEO-elect of eBay.

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