eBay announced on Tuesday the first of what could be a total of three major changes impacting sellers in 2010. All across North America, eBay sellers were reaching for calculators and opening spreadsheets to crunch the numbers to determine the impact on their bottom line. One question some sellers struggled to understand was, what was happening to eBay Stores?

eBay said it would eliminate the Store Inventory Format (SIF) in March, but would give eBay Storeowners special fees for auction and fixed price listings. eBay will continue to charge a monthly subscription fee in three tiers: Basic, Premium, and Anchor Stores. But beginning in March, the more expensive the monthly subscription fee, the lower the Insertion fees for eBay Storeowners - a fee structure that favors high-volume sellers.

And while auctions may be slightly less to list under the new fee structure, the Final Value Fee is higher. Factors affecting a seller's costs include:

• At what price do you want to start the bidding?
• Do you have a Basic eBay Store, a Premium Store, an Anchor Store, or no eBay Store at all?
• If you don't have an eBay Store, have you already listed 100 auctions yet this month?

And that's just to figure out auction listing fees. Commission fees (Final Value fees) will also depend on whether you have an eBay Store (a tiered structure starting at 8.75%) or not (9% with a $50 cap).

Now try to figure out how much it costs in Insertion fees and commission fees for a Fixed-Price item.

If your head is spinning, then you know how eBay sellers felt after the announcement.

One seller posted a guide on Google Docs. Others shared their calculations on discussion boards, as this AuctionBytes reader did.

Rebalancing the Marketplace Using Pricing Levers
eBay CEO John Donahoe told analysts last week that eBay was re-balancing fees: lowering listing fees and raising commissions (back-end fees). He said that those changes align eBay's incentives with those of its sellers: "If they don't succeed in selling, we don't succeed in collecting fees."

That may be true for high-volume sellers who can afford to upgrade to an Anchor Store, where Fixed-Price insertion fees are a flat rate of 3 cents, or a Premium Store (5-cent listings). And it may be true for casual sellers listing things around the house for 99 cents - they get 100 of those auctions free of listing fees.

But it appears to smaller sellers that the "middle class" is getting squeezed, and their upfront costs are rising. Previously they could subscribe to a Basic eBay Store ($15.95/month) and have access to 3-cent, 5-cent and 10-cent listing fees (depending on the price of the item) - now it's a flat rate 20 cents - a much higher upfront cost to those sellers.

From eBay's perspective, it is increasing the visibility of Storeowners' listings, making them core Fixed Price Items, which cost 35 cents under the current fee structure. eBay executive Todd Lutwak told AuctionBytes on Tuesday that the additional visibility that this will provide to sellers will help them sell through more items. He said when eBay made similar changes in Europe in 2008, it worked out very well for sellers. Mr. Lutwak pointed to a website eBay created to showcase successful sellers who made the transition in Europe.

However, fees for Fixed-Price listings will actually increase from 35 cents to 50 cents for non-Store owners.

Ironically, the risk to non-Store sellers who take advantage of the new auction pricing plan where they can list up to 100 items for free (for items with starting price of under $1) is that their item does sell - for a low price. For example, if an item is worth $24 and they list it for 99 cents in an auction format, they must honor the high bid - even if that high bid is 99 cents - in that case, the upfront cost was low, but the risk was losing $23 on the transaction!

Difficult Decision
For $15.95/month, eBay Storeowners could stock the virtual shelves between 3 and 10 cents per-listing per-month. Beginning March 30, they will have to pay 20 cents per-listing per-month. That's an extra $1.7 for ten items, or $8.50 for 50 items. For sellers with 100 items in their Stores, it's an extra $17 per month.

No longer can smaller eBay Store owners stock their shelves with items that give shoppers a broader selection. (In fact, eBay advised sellers to begin liquidating inventory they don't want to renew before the new fees take effect.)

Many smaller sellers may wait and see how the new model works out, hoping for increased visibility for their listings, but others say it will force them to close shop and list fewer items. As it continues to court high-volume manufacturers, retailers and liquidators, that may be exactly what eBay wants.

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