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eBay Incumbent Implements Big Changes

  • Reuters, Wednesday, January 30, 2008 11 AM

Incumbent CEO John Donahoe on Tuesday introduced pricing changes that will benefit eBay's top sellers by rewarding them with sales incentives and a priority ranking when buyers search for auctioned items. The biggest change is a reduction in seller fees as the value of sales goes up. Successful sellers will also feature more prominently in eBay's search results. "Put simply, we will make more of our money when sellers are successful," Donahoe said in a statement. Yes, but the change also encourages merchants to sell more expensive items.

Other key changes included lowering fees for auction listings and eBay store items, raising seller fees for certain transactions, and improving seller best practices. As a result, listing fees in the U.S. (the changes vary by country) will be reduced 25 percent on most auction items and 50 percent on merchant store items. Donahoe also said sellers that meet the new sales standards, which include describing items accurately, and shipping on time and at a fair price would also receive pricing incentives.

The changes will take effect on Feb. 20 in the U.S., followed later by Germany and Britain, the company's second and third biggest markets. The changes come amid slowing sales growth and the imminent departure of longtime CEO Meg Whitman. Revenue growth in eBay's core ecommerce business is roughly half what it was just three years ago.

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