Important information for eBay.co.uk sellers

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[yamoth]

Ebay has announced a new set of auction fees that it claims are designed to boost sales. But the new pricing structure has been met with dismay by traders.
The key changes involve lowering fees for listing items within auctions or for independently operated stores run on Ebay. However, it also involves raising some of the fees sellers pay once sales transactions are successfully completed.

The moves initially take effect 20 February in the US. In coming weeks, similar changes will be introduced in Germany and Britain, Ebay's No. 2 and No. 3 markets.

In the US, Ebay plans to reduce insertion fees - the cost of listing new items - by 25% on most auction items and by 50% on most store items. The fee changes, which vary by country, are intended to encourage sellers to list more items and use more pictures to illustrate listings.

"Put simply, we will make more of our money when sellers are successful," says CEO-in-waiting, John Donahoe.

One way Ebay will make that money is by increasing its commission on completed sales. The auction house claims "sellers prefer this structure, as it lowers their risk if an item   
   
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doesn't sell."

However, sellers are already complaining that they're going to be paying more than they were before. "We call it Ebay math, it's a different math than most other people's math," Randy Smythe, an Ebay user from Southern California, tells AP.

Weeding out the crooks

Along with fee changes, Ebay is making its minimum standards more stringent for anyone who sells on the site, primarily to discourage behaviour like charging excessive shipping fees or not describing listed items accurately. Sellers with high customer dissatisfaction ratings will be given lower priority in searches on the site.

"Sellers that describe items accurately, ship on time, and ship at a fair price will enjoy preferential pricing and discounts on Ebay," says Donahoe. "We're serious about making Ebay easier and safer to shop."

Ebay is seeking to reverse slowing revenue growth in its marketplaces business, which is roughly half the level of three years ago. The company telegraphed that changes were in store last week when it reported its 2007 year-end results.

Long-serving Ebay chief executive Meg Whitman said last week she planned to step aside at the end of March and be replaced by Donahoe.

Analysts said the changes are welcome but that the company has a lot more to do to revive its growth in its auction business.

"While the moves are bold, I don't think they are going to change the face of competition," says Scot Wingo, chief executive of ChannelAdvisor, a sales consulting group that advises online merchants.