eBay is raising listing and commission fees for Store inventory, effective August 22, 2006. It will also add auction-style listings with Buy It Now to its new fixed-price eBay Express marketplace - and those non-Store listings will show up higher on eBay Express search results than Store inventory listings (http://www2.ebay.com/aw/core/200607.shtml#2006-07-19134256).
Whitman and Cobb are itching to get eBay back into 'balance'
In a conference call with investors on Wednesday, eBay President and CEO Meg Whitman said the fee increases were due to a listings imbalance on eBay. She said rolling back Stores in Search in the Spring was not enough, and the imbalance had amplified as sellers geared up Store inventory in preparation for the launch of eBay Express.
Sellers appear confused over the mixed signals coming from eBay. In fact, Wednesday's announcements were in sharp contrast to January's announcements when eBay released its fourth quarter 2005 results. Then, eBay announced it would increase Store inventory exposure (through "Stores in Search") and launch the eBay Express marketplace containing fixed-price and eBay Stores listings (http://www.auctionbytes.com/cab/abn/y06/m01/i19/s01).
In late March, eBay rolled back Store in Search, and on Wednesday, Whitman said eBay would expand the rollback internationally and announce country-specific plans to reduce visibility of Store inventory in core search.
Sellers seem as upset over this week's announced fee hikes - which increase Stores' insertion fees in 2-tiers to 5 cents or 10 cents, up from 2 cents, and increase Stores' commission fees to as high as 10 percent - as they were in January 2005. That's when eBay raised Store commission fees to as high as 8 percent, depending on the selling price. Other fees were raised as well and went into effect in February 2005 (http://auctionbytes.com/cab/abn/y05/m01/i18/s01).
Hours after Wednesday's announcements, discussion boards heated up with posts from angry sellers, with sellers on one eBay discussion board talking of a boycott. Sellers are also concerned over the ability of buyers to find their items, and new concerns arose this week as sellers started seeing Yahoo advertisements appear on eBay search results (http://auctionbytes.com/cab/abn/y06/m07/i19/s01).
Some sellers are discussing the approaches they will take to deal with the increased costs of running an eBay Store. Some say they will close their Stores before the fee increases take effect. Others say they will rid their eBay Stores of low-priced items and raise prices on what's left - and that's exactly the behavior Whitman seems to be aiming for with the fee hikes. In a conference call with investors on Wednesday, the CEO said too much Store inventory led to a bad experience for buyers, who were being overwhelmed with identical, often poorly priced items.
But Whitman also said the changes announced Wedneday would "revitalize GMV growth rates." A Reuters report said, "Overall listings were up 35 percent while gross merchandise volume, or the total value of items sold on eBay, rose only 18 percent. This suggests there were more inexpensive goods sold than high-ticket items, which drive growth, analysts said" (http://digbig.com/4matx).
In a board announcement from eBay North America President Bill Cobb, he cited the following statistics:
- Store Inventory listings now comprise about 83% of active eBay.com listings on average.
- While eBay.com core listings typically sell in about two weeks, Store Inventory listings on average take 14 times longer to sell. In some media categories, Store Inventory listings take more than 40 times longer to sell than core listings.
- And, when you compare our operations costs for an average Store Inventory listing and an average core listing - factoring in the duration of each - our cost to host a Store Inventory listing is more than 50% higher than for a core listing. In fact, current Store Inventory insertion fees don't cover eBay's costs for hosting them.
eBay set up a page to help Store sellers "understand how the fee changes may impact their business and evaluate options for adjusting their eBay selling strategy." eBay is also offering eBay Stores sellers a free two-month subscription to eBay's Marketplace Research Basic tool (http://pages.ebay.com/sell/announcement200607/overview/sellerresources.html).
Perhaps to appease sellers (maybe even to keep them busy listing and off of discussion boards), eBay is holding a "Back to Basics" sale, part of an attempt to "bring eBay.com's auction-style and other core listing formats back to center stage." For two days - July 20 and 21 - all Insertion fees for Fixed Price and Auction style listings will be 20 cents (all other fees apply - see website for details and restrictions: http://pages.ebay.com/promo/paythesame ).
More details on the fee increases and other announcements are available in a post by Bill Cobb on eBay's Announcement Board (http://www2.ebay.com/aw/core/200607191343242.html). Canadian sellers should review this page as well (http://pages.ebay.ca/sell/announcement200607/overview/adjustments.html).
Sellers React:
http://www.otwa.com/community/showthread.php?t=42489
http://community.tuliptools.com/index.php/topic,4457.0.html
http://forums.ebay.com/db2/thread.jspa?threadID=2000181764
http://forums.ebay.com/db2/thread.jspa?threadID=2000181790
eBay Town Hall Meeting
eBay North America President Bill Cobb will host an online "Town Hall Meeting" on Thursday where he will answer questions from the community.
http://pages.ebay.com/townhall
