eBay Changes Its Fee Structure

EBay Inc. said Tuesday that it will cut the fees it charges to list items by 25% to 50% and increase the fees for sold items in an effort to improve the buyer experience.

The changes, which will be rolled out in eBay marketplaces worldwide, will become effective in the U.S. on Feb. 20.

EBay said it hopes the changes in its fee structure will encourage sellers to list more items and use more pictures in their listings -- and thereby possibly attract more buyers. The company said it is offsetting the reduction in listing fees by charging sellers more when they sell items. For example, the fee for selling an item that costs up to $25 will increase from 5.25% to 8.75% of the final sale price.

"Sellers prefer this structure, as it lowers their risk if an item doesn't sell," said John Donahoe, eBay's president and CEO-to-be, in his keynote address at the company's third annual eCommerce Forum in Washington. "Put simply, we will make more of our money when sellers are successful." Donahoe is succeeding President and CEO Meg Whitman, who recently retired.

EBay said it's also eliminating fees in the U.S. for its Gallery option -- a move that the company said should encourage sellers to include more photos of the items they are selling, a feature the company said buyers want.

In addition to the changes in its fee structure, eBay said it's changing the way it works with sellers. The company said sellers will be subjected to more stringent minimum standards in an effort to do away with behavior that causes buyer dissatisfaction, such as charging excessive shipping fees or not describing items accurately.

The company said it will begin that effort by lowering the exposure in its search results for sellers who have high rates of customer dissatisfaction. Conversely, Donahoe said eBay will begin increasing the search exposure for the listings of sellers who have the best customer satisfaction ratings.