eBay Raises Fees, Talks Up Holiday Success

By Ed Oswald | Published January 4, 2007, 11:33 AM

eBay on Wednesday announced that it will raise fees in both its standard and automobile auctions, while also announcing that it was the number one online destination on both "Black Friday" and "Cyber Monday."

In a letter sent to eBay users, eBay North America president Bill Cobb said the changes were necessary as part of a regular evaluation of its business structure. Increases are slated for the Insertion and Final Value Fees, as well as fees specific to eBay Motors that would take effect January 30.

Insertion fees for the $1.00 to $9.99 level will increase from thirty-five cents to forty cents. Final Value Fees will increase from 3% to 3.25% for auctions with an ending price of $25.01 to $1,000. No increases have been planned for eBay Stores or Store Inventory listings.

eBay Motors fees will increase as follows: the Transaction Services Fee for Motorcycles and Powersports will increase from $30 to $40; and for Cars and Trucks as well as the Other Vehicles and Trailers categories to $50 from $40.

The policy for reserve fees in eBay Motors will also change from a flat $5 fee to 0.1% of the reserve price, with a minimum of $5 and maximum of $10.

"Let me say that, while we believe these changes are modest, we consider any changes that may impact our sellers with great care," Cobb said. "These adjustments are the result of careful analysis, and we believe they're the right thing to do to keep the marketplace strong for our eBay.com and eBay Motors sellers."

As well as announcing price changes, Cobb also relayed statistics on eBay's holiday performance. On both Black Friday and Cyber Monday, the auction site was the top shopping destination according to Nielsen/NetRatings, with 7.5 million and 5.6 million unique visitors respectively.

Cobb said he plans to meet with a small group of eBay's sellers in San Jose later this month, where he plans to talk about the auction site's future plans. A recorded version of the keynote will be made available to all eBay users.

"I think you'll find we're taking a surprisingly fresh look at some of the old challenges, and I'm excited about the road ahead," he said.

Comments

View comments by with a score of at least

It would be nice if Google setup their own auction site. At least then there would be competition to keep prices down.

Score: 0

|

Either e-bay wants more profit from the 9.99 funky junk sellers, or they are trying to drive out the core low-end. Pruning out the low-end doesn't make any economic sense:

Consider what the first-time buyer usually purchases on e-bay. It's the rare newbie who risks bidding on a high-priced item from a stranger using unfamiliar technology. Addicted customers are created from happy winning bidders on a piece of 9.99 funky junk. Success with low-end purchases leads to confidence in e-baying, and eventually leads to more purchases--and more expensive purchases.

Consider, also, the type of auction a new SELLER holds. To gain experience, the newbie would likely list a low-priced item. And then another, then another... that way getting their feet wet.

If the funky junk sellers abandon e-bay because of the higher fees, gone also is the gentle introduction to e-bay selling and buying for the newbies. Short-sighted economics, I'd say. No way to propel growth.

Score: 0

|

Hey Cobb,
I could lend you a couple of bucks to eat since eBay is so hurting for money.
Stick it to who made you...Outch!

Score: 0

|

Ok, last straw. If you are making record profits ebay, why are you raising prices AGAIN!?!?!?!

Time to start posting on craigslist or yahoo auctions...

Score: 0

|

I hope Ebay falls flat on its arse, it has lost sight of what it was and has evolved in to a one for all superstore with its goods retailing at top prices with the people being charged high fees for the use of its services.

Score: 0

|

eBay managers clearly show to be communistic minded people with no clue about what a real capitalist business is about. Just like Left Wing parties their only way to increase profits is that of raising taxes more and more.
The eBay monopoly condition in the market just like Microsoft is what's allowing these lame guys to keep raising their fees/taxes. It's just insane! This is a real fraud over the customers.

Score: 0

|

Blog posting that mentions eBay fee increase.

http://thelaggard.com/blog/?p=201

Score: 0

|

I always get a good laugh from friends and acquaintances who choose to sell something/s on eBay, only to be cranked about how much it cost them for the privilege. They feel stupid and promise never to mention it again.

Score: 0

|

Funny, eBay charges you out the a** for all this s***, yet craigslist can offer their service completely free with the sole exception of charging for listings by businesses looking for employees.

Score: 0

|

I have been an Ebay seller for about seven years and your latest move has me ready to switch to any ebay auction site competitor. Ebay is the worlds leading auction site. Ebay has changed its listing fees again and again. When I first used ebay it cost .20 cents to list an item under $9.99. Now it cost .40 cents per listing. BUY IT NOW was only .05 cents per listing regardless of the cost of the item listed. Now the cost has more then tripled. Ebay has an infernal greed you are earring millions maybe billions of dollars you simply provide a connection between the seller and the buyer. Ebay does not have to put forth an effort to make money. The seller does all the work and yet you continue to raise your listing fees and now you even want the sellers to pay for Ebay picture listings. This is below the belt greed and hypocrisy. I don’t think I would be with Ebay too long if they had a good competitor. One more thing I would like to see a Phone Number where you can call Ebay and talk about your problem.

Score: 0

|

"Let me say that, while we believe these changes are modest, we consider any changes that may impact our sellers with great care," Cobb said.

Are you kidding me? It's real modest, when their earnings because of this "modest" increase amount to billions of dollars. eBay is already a cash cow making almost pure profit, hundreds of billions each year, yet they're still trying to screw us. Whatever, I don't use eBay now and I never will. The rest of you, enjoy the "modest" increase in those fees.

Also, when he says "we consider any changes that may impact our sellers with great care" what he really means is "the only thing we care about is maximizing profits, but we want to be careful not to go too far too fast and risk alienating too many of our moneybags (aka. customers)"

Score: 0

|

Funny how the richer they get the more they have to raise fees. They are a monopoly, nothing more. They know they can screw everyone and no one can do a thing about it. Everyone is going to shop at the site that has the most sellers, and that is ebay. Likewise the sellers are going to the site that has the most buyers. Yahoo and the other auction sites didn't have a chance. I'm not sure what can be done about it really, but as far as the fees go I think it's about time the DoJ sat down with ebay and had a little talk.

Score: 0

|

Yes, ebay are getting greedy yet again. But, of course, it's only an excercise in trying to fool everyone that they're keeping up with market expectations.
What the cheap listings days do for the numbers of auctions on the site, they hope fee hikes will do for the balance sheets and investor confidence.
It's no wonder many sellers are leaving for pastures new and finding all the free to list sites, of which there are many.
Any one of these alternative auction sites (known to us as the 'St Elsewheres') could easily capture a substantial part of ebay's market share and, IMHO, once sellers discover the joys of zero fee listing it will spell the end of the road for ebay.
Giants fall and the crash is usually spectacular when they do.
Anyone interested in the alternatives should take a peek at the forums here http://www.pheebay.com/

Score: 0

|

"A recorded version of the keynote will be made available to all eBay users."

With a $1.00 per listen "convienence fee", plus a 40 cent "bandwidth fee", I'm sure.

I stopped using eBay years ago. While once it was a great idea it's now just another forum for stupid fat people to get rich off of at the expense of the user. I see no justification for these constant fee increases...so I won't support them.

Score: 0

|

eBay is pricing themselves right out of the market... And they deserve it... There are other venues out there, HiBidder.com and Tazbar.com just to name two good ones that provide better service for much much less...

I had to step away from the computer when I read the words "unhealthy dynamics"... Those were the exact condescending words they used in July... Who writes this garbage? And poor Cobb Man, he must have drawn the short straw to have been chosen to make that announcement, LOL...

St Elsewhere's get ready, eBay just handed you an entire new market, don't miss it...

Score: 0

|

Ebay=Theft. enough said. now i can go back to be hooch..err beer

Score: 0

|

"right thing to do to keep the marketplace strong for our eBay.com and eBay Motors sellers." So let me get this straight, e-bay sellers keep the marketplace stronger by paying MORE to sell their products? I must've missed something in my economics class at the university. I am somewhat speechless at such a lame excuse to raise prices. But that is the way a freemarket economy works. Love or leave it.

Score: 0

|

Unfortunately managers in big groups like eBay are just communistic minded, they have no clue about what capitalism is. Their idea of capitalism is just that of making a fool of the customer and keep raising fees/taxes.

Score: 0

|

I am not an eBay fan and I would never buy anything from their auctions.

Score: 0

|

I know your exercising your personal choice by not using eBay, but I find that comment amusing.

Score: 0

|

I'm glad I could amuse you. My soul purpose in life is to provide you with amusing stories, so now my life is complete and I can move on to he next world.

Score: 0

|

wait! you havent ammused me yet. My turn! My turn!

Score: 0

|

But I am not trying to amuse you. Only the other one. My life goal is defined, and you are not part of the definition.

Score: 0

|

Well, we made record profits this holiday season, so let's raise the price even more. Tis' the season to be gready :)

Score: 0

|

Exactly. They should lower their already high fee. With Paypal, Ebay takes away close to 10% of final value, not even make it profitable selling on ebay any more.

Score: 0

|

This one's going to hurt the sellers of low cost items. However, the impact will hit buyers more imho.

Why? Cheap Listing Days!

The last few months of 2006 saw an incredible number of CLDs (cheap listing days) in order to keep the listing numbers pumped. The last one was on the 27th Dec, which helped boost the figured back to the 16 mill mark from around 9.5 mill. Have a look today at the listing numbers. The 7 day listings from the CLD have ended and the listings on Ebay.com have fallen by 31%! They'll probably drop further in a couple of days when the 10 day listings end.

What happens on CLDs? The site gets flooded with attic clearances. I thought Ebay were keen to prevent 'clutter' as it 'impaired the buyers experience', which was their justification for last summers 'hide and hike' policy.

What will happen after the fee hike's implemented? Sellers will be less likely to use galleries to keep listing costs down (thus imparing the 'buyer's experience' further). They'll also be an even greater reliance on CLDs for attic clearers and sellers of low cost items.

If Ebay are looking to improve the 'buyer experience' why not REDUCE gallery fees? A 'dynamic' Ebay have overlooked I guess!

Still, for those who are sick of Ebay's constant moving of goalposts and 'unhealthy dynamics', you should check out Pheebay.com for some alternatives to ebay:

http://pheebay.com/forums/viewforum.php?f=10

Score: 0

|

Maybe they have a executive they are getting ready to fire and need the money for severance pay.

Score: 0

|

i've been a seller on ebay for a while now about 5 years and they've increased their ebay fees super and everybody is right that is a lame excuse because not only do they charge you to post the listing they take out a chunk when the listing gets sold and then paypal takes a chunk out of the money you get and then if the buyer opens up a dispute saying that they didn't want the the item they take your money and have it on hold and take almost 2 months to get your money back until the dispute is closed and then on top of all that ebay wants to crack down on all the sellers that have outrageous shipping and they say to have a fair trading market for the buyer thats BS so ebay believe it or not make BIG $$$. I use ebay cause i've been using them for a while but if their was another big company like ebay believe me i would try it out, thats why its always good to have competition so you have choices to pick from.

Score: 0

|

well not to mention they make a huge amount of money off of legal fees from paypal cases, and the advertising.....

Score: 0

|

I have been a buyer from ebay for almost 3 years now, i found prices on shipping going up and up and up from sellers.

sellers are getting cheaper and cheaper over time... and complaining more and more, but you know what ebay has started to do more and more over time? be friendlier to the buyers, if a seller screws over a buyer, ebay and paypal, have been more and more kind to the poor buyer that got scammed, well where does paypal, and ebay get the money to refund you?

answer: from the seller that sold you the product, and they have to pay their staff who investigates, and who deals with support, they need money to find their business, and to fund their workers, i dont see this 40 cents as an issue seeing as sellers turn around and go from 15 dollers to 65 dollers in shipping, i tihnk all in all the sellers are the greedy basterds,

i hate how u cannot find a single wii console in any local stores, cuz somone wants to make a buck, u know what, quit wining u damn sellers that are wining are the sellers that casue the problems to begin with, dont get me wrong there are some decent people that sell good things at resonalble prices, i have bought from some of you, keep it up, but realize the fees.

Score: 0

|

Latest Firefox 3.6 beta fixes 133 bugs, promises faster page load times

A once-sluggish beta testing process has kicked into overdrive, with astonishing success at finding serious bugs. Will Mozilla be able to fix all the others in time?

Apple invokes DMCA, claims Psystar is 'trafficking in circumvention devices'

In trying to close the book on possibly the last attempt at a Mac clone, Apple cites from its own landmark case...but may actually be misinterpreting it.

The fallacy of Facebook privacy

Carmi Levy | Wide Angle Zoom: If an insurance company learns something interesting about its client through the Internet, is that snooping?

Microsoft 'worked with Apple' for Silverlight on iPhone, says Goldfarb

By not making such a big deal out of trying to stream video to the iPhone, Microsoft got a big deal out of it, revealed the Silverlight product manager.

Confirmed: Office 2010 to ship in June

Two weeks after Microsoft had been expected to draw a clearer roadmap for its principal applications suite, it's finally ready to commit to the end of H1.

New EU antitrust commissioner will oversee Microsoft, Oracle+Sun, Intel issues

As one of Europe's most prominent politicians shifts positions in January, her replacement remains a question mark over technology's biggest issues.

Without its own 'iTablet' yet, is Apple missing the boat?

Steve Jobs is on record as dissing "single-purpose" devices like e-readers. But given their recent popularity, was that a mistake?

Not-so-mobile battery life: Time to force the issue

Carmi Levy | Wide Angle Zoom: If power efficiency is important when you buy a car or even a motorcycle, why shouldn't it matter for a smartphone?

Clicker.com cuts through the Web video chaos

In a world where homemade video and Hollywood movies travel the same pipeline, it's good to have a real search engine to cut through the clutter.

Microsoft's Ray Ozzie: 'Nobody's going to be 100% open'

The mobile apps ecosystems of the world may converge over time, led by apps being ported over across platforms, according to the Chief Software Architect.

A case study in improving software: What Office 2010 can learn from Notion 3

A music composition product gambles with a complete overhaul, in an effort to make headway against two well-known competitors in a tough market.