eBay Fee 'Cuts' Questioned By Some

eBay has announced cuts to its listing fees, but other changes mean customers may pay more for selling their goods. The fee cuts will come into force in the United States on 20 February and are likely to be extended overseas later. The biggest cuts are for items with a starting price below $25, where the fees will now be halved. Most items above $25 will now cost 20% less to list.

However, the company is increasing the proportion of the sale price taken if the item sells. For items up to $25, the fee goes up from 5.25% to 8.75%. For items costing more than $25, the seller now pays 3.5% on the excess. Previously, this had been 3.25%.

As a guideline, an item sold for $25 will now cost the seller 67 cents more than before the changes. However, an item listed at that price that doesn't sell will cost the seller 20 cents less. (Source: theregister.co.uk)

Other policy changes include free photos for all items on the search results page (previously this was a chargeable option) and removing the option for sellers to leave neutral or negative feedback.

Ina Steiner of the online traders newsletter AuctionBytes said this would harm sellers as they would no longer have any way to fight back against malicious buyers. (Source: nytimes.com)

eBay have also said they'll change their search results so that sellers with poor feedback from past sales show up lower in the listing. The changes are the work of John Donahoe who will soon take over as chief executive for eBay. He believes lower listing fees will bring back sellers seduced by rivals like Amazon.

In theory, lower listing fees should boost the number of listings, which dropped during the summer of 2007. However, there's a risk that cheaper listings will encourage 'low quality' posts by people with poor customer service, those who are placing false listings to get a form of advertising, and outright fraudsters.