EBay slashes some fees as incentives for sellers

Online auction powerhouse eBay announced this morning steep fee cuts and several other strategies, as incentives to its customers to help it stay on top.

Speaking at a keynote address at the eCommerce Forum yesterday, outgoing eBay North American division president Bill Cobb highlighted several key changes: First, the site will reduce its own upfront insertion fees by 25% to 50% when sellers list items, while increasing fees when items are successfully sold. Items sold under $25 on EBay will see a commission rise from 5.25% to 8.25%, a move that could have a dramatic impact on used media sold on the site.

Respected sellers who meet and exceed eBay's minimum standards will be able to earn added benefits, such as higher placement in listing results after a search. Vendors who manipulate customers by charging too much for shipping or don't describe products accurately will now have incentives to clean up their act. And all sellers who have high buyer dissatisfaction rates will be required to offer potential customers a "safe payment option" to lessen the likelihood of fraud.

Also, sellers will no longer have to pay to upload images to the Gallery feature available to sellers. Users of the Feature Plus, Gallery Plus, and Picture Pack will continue to pay fees, although they have been reduced a small amount.

The new changes become effective on Feb. 20.

Analysts and eBay users have been expecting some kind of announcement, and the proposed changes were not too surprising. Some users initially support the fee changes, while other eBay sellers are not as optimistic.

Amazon allows users to sell items through its Marketplace without charging a listing fee, instead charging a commission for each item sold. Sellers who offer items for $45 or less will likely head to the Amazon Marketplace because the new price changes will cost them more on eBay.