eBay's new broom makes sweeping changes

By Stuart Corner
Tuesday, 29 January 2008 23:28

Technology

eBay's new president and CEO-elect, John Donahoe, has unveiled fundamental changes to eBay's fee structure, seller standards and feedback mechanism, including lower listing fees, higher minimum selling standards and incentives and discounts for the best sellers. The changes, which will be rolled out globally, were unveiled by Donahoe in his keynote address at eBay's third annual eCommerce Forum. The fee changes, which vary by country, are intended to encourage sellers to list more items and use more pictures in listings, eBay says.

From 20 February in the US eBay will reduce its fees to list items by 25 to 50 percent and will compensate for the loss of revenue by increasing the fees it charges when an item is sold. Other than this, the company has given no details of the changes or their rollout timetable around the world.

However reports of Donahoe's speech say that eBay will risk getting sellers offside by hiking sales commissions by 40 percent, from about 5.25 to 7.5 percent, and will require new sellers and those with less than a 100 percent feedback score to accept PayPal payments.

It was also reported that from May sellers will no longer be able to leave negative or neutral feedback for buyers. eBay said the current system prevents buyers from leaving honest feedback because they fear retaliation from the sellers if they leave a negative. The report quoted eBay saying "This makes it hard for buyers to distinguish between sellers while making bidding or buying decisions. In addition, when buyers receive negative Feedback, they reduce their activity in the marketplace, which in-turn harms all sellers."