EBay lowering fixed-price sellers' listing fees

By Alexandria Sage

SAN FRANCISCO (Reuters) - EBay Inc is cutting the fees U.S. sellers on its site pay for fixed-price items, in one of the company's boldest moves this year to boost merchandise for sale, lure new buyers and take on competitors.

Total sellers' fees will decrease in most cases under eBay's plan to improve the balance between buyers and sellers on the world's largest online auction site, and thereby reduce customer defections to rivals such as Amazon.com Inc.

"I'd say this is the most fundamental change we've made, ever, to the marketplace," Lorrie Norrington, president of eBay marketplace operations, told Reuters. "It's a huge shift from where we've been."

Instead of charging sellers to list each item separately, eBay will charge 35 cents to list any number of the same types of fixed-price items. Similar changes will be made in Germany and Britain, eBay's second- and third-largest auction markets.

The move, effective September 16, is a bid to reduce the clutter of similar items on eBay -- 100 pairs of white socks will now be sold as a group, for example. The change is timed to boost business heading into the crucial holiday season.

Such items will remain listed for 30 days instead of seven, helping sellers avoid the time-consuming process of re-listing unsold items and lowering the risk of inventory going unsold.

Fixed-price items, which made up 43 percent of merchandise sales on eBay last quarter, often attract newer or less-sophisticated online buyers who don't want to wait for a multi-day auction to close. EBay says fixed-price sales are popular because they bring in newer, more in-season goods, whether its plasma televisions or the latest video game.

EBay has been trying to attract more buyers as its main auction site has experienced slowing growth in recent years. The novelty of online auctions has waned and rivals like Amazon have muscled in on its turf with strong fixed-price offerings.

"Consumers are voting with their wallets and saying, 'Auctions aren't really the way I want to buy cosmetics,' or something like that," said Scot Wingo, chief executive of ChannelAdvisor, a sales consulting firm that advises online merchants who sell through eBay and other sites.

He called eBay's move a "relatively big change" to make before the holidays that also shows eBay's new management is willing to look beyond the traditional auction format.

Patti Freeman Evans, research director at Jupiter Research, said given the fast-growing nature of fixed-price sales, eBay's move is "very opportunistic, but also in line with what their customers are telling them they want."

MOST COMPETITIVE?

EBay's fixed-price focus reflects a shift in e-commerce. Consumers are now more comfortable with Web shopping and barraged with choices, whether it's auctioneers, retailers or classified sites like craigslist.com promoting bargains online or in stores. Also, sellers often post wares on many sites.

EBay, a San Jose, California-based company with 84 million active users worldwide, said lower listing fees, together with rejiggered back-end fees that will vary according to category, will make it the most competitive fixed-price player.

EBay said an "average" fixed-price seller that once spent $5,000 in eBay fees each year would now spend 11 percent less under the new fee system.  Continued...