>A Message from Bill Cobb: Resetting the Balance of the eBay Marketplace

>Bill Cobb, President of eBay North America, announced last night that the eBay list fee for Stores and Final Value Fee (FVF) will increase. Final Value Fee will be 10% effective August 22, 2006 for items $0.01 to $25 with a lower FVF as the selling price increases. According to eBay, a seller “will experience an overall fee increase of less than six percent, based on our analysis of all June [2006] selling activity.”

I would not be surprised if eBay in 2007, raised their fees again to bring them closer to Amazon’s 15% Marketplace commission. But that will take at least two years I think.

eBay wants to encourage the use of core features (auctions, auctions with buy it now, and fixed priced listings) with this change. But all this change will do is reduce the number of Stores items listed. If eBay wants to increase core listings, reduce the listing fee.

Our strategy going forward is to remove Store listings that have not performed well. If we can remove 60% of our total inventory, we will break even on the new insertion fee. We will also have to increase our prices to reflect the new FVF.

Its getting to a point where eBay is pricing itself out of the online marketplace and buyers can find a better deal elsewhere.