EBay Inc. is about to find out whether a fee increase will help the company reverse a strategic error and boost revenue - or drive away some of its highest-volume sellers.
Starting Aug. 22, the San Jose, Calif.-based company will raise the fees it charges to those who sell items through any of its approximately 500,000 online stores, which are set up more like a retail site than eBay’s traditional auction listings.
The increases come about two years after eBay reduced those same fees in order to give the feature a boost.While the increases may appear small — amounting in some cases to as little as $1.20 more per item sold - they’ve already set off a backlash that has resulted in a boycott among some eBay sellers.
EBay hopes the extra fees will encourage a certain amount of store operators to switch back to selling items through auctions, or “rebalance the marketplace,” as Chief Executive Meg Whitman said on a conference call last month.
Jason A Smith on August 18th, 2006 at 12:07 pm
Although no seller likes when vendors raise thier prices and essentially eBay is a vendor of distribution channel for these volume sellers … One has to keep in mind that they are really investing in their own company. Many of these eBay sellers would not exist or would be stuck in a corporate job somewhere if eBay was not as popular as it is globally. Yes they pay a bit more now but if the company does not stay profitable and goes under water they too are out of luck and will be searching for brand recognition, loyal customer bases, once again. I think this backlash is a extremely short sided viewpoint.