) 
Earlier this week at the eCommerce Forum in Washington D.C., Bill Cobb, president of eBay North America, announced changes to the pricing structure on the site. He said:
Those changes include:
- Lowering insertion fees for all auctions, including fixed-price listings
- The Gallery feature is to become free
- The introduction of tiered pricing for Featured Plus
The changes, according to Cobb, are in response to sellers not liking the existing price structure and that they wanted higher prices for success rather than starting the auction in the first place. The comparison final value fee table is reproduced below, taken directly from eBay’s fees page:
Some sellers have looked into the new fee structure and found that this will actually increase the cost of listing some items rather than reducing them. The example given is a purse selling at auction for US$25. With the old fees, the seller would have paid a total price of $1.91 (60 cent listing charge and $1.32 final value fee), but with the new charges, the total comes to $2.74. The listing charge goes down to 55 cents, but the final value fee increases to $2.19, more than compensating for the listing reduction.
Steve Grossberg, an eBay Top 100 seller and founder and president of the Internet Merchants Association, commented:
I think you are going to see a listing decrease, you are going to see some sellers leave the site or pull back quite a bit and think of other ways to make revenue, and it’s going to backfire.
Read more at the Associated Press article and the eBay press release.
Matthew’s Opinion
I think it is a mistake for eBay to present this as a reduction in costs to the seller, which Bill Cobb clearly does in his press release with the words “significant price reductions.” It is simple math to figure out that if you decrease the percentage charge on a smaller listing price, but increase the percentage charge on the larger final price, the cost is going up.
Looking at the fee table above, they are significant fee hikes as well. The listing fee has been reduced by between 5 and 80 cents, but the final value fee has gone up by 3.5% for the first $25 and then increased by .25% on the remaining item value. In a lot of cases, the maximum 80 cents you can save on your listing price will be eaten up by the increased charges on the final price.
Lower initial charges will encourage more auction listings, but in the long term, if sellers find the auctions are costing them a lot more, then they will leave eBay. Amazon seems to be the main alternative at the moment, and eBay just needs to keep a close watch on what is happening, especially with its top sellers.
) 
) 