President and CEO-elect John Donahoe unveils fundamental changes to fee
structure, seller standards and feedback at eBay's eCommerce Forum
Washington, D.C., Jan. 29 /CNW/ - eBay (Nasdaq: EBAY) announced today
that it is lowering fees for listing items, raising minimum selling standards,
and offering its best sellers incentives and discounts for the first time in
its history. These sweeping changes - which will be rolled out in eBay
marketplaces globally - are aimed at improving the overall experience for eBay
"Consumers have more choices than ever, and they expect more when they
shop online today," said John Donahoe, the President and CEO-elect of eBay, in
his keynote address at eBay's third annual eCommerce Forum.
Addressing more than 200 top North American sellers, Donahoe said, "We're
serious about making eBay easier and safer to shop."
To improve the buying experience, the company announced it is making
changes in three major areas that influence seller behaviour: fee structure,
seller incentives and standards, and feedback.
The fee changes, which vary by country, are intended to encourage sellers
to list more items and use more pictures in listings, both of which are good
for buyers. Canadian dollar fees and pricing tiers will be adjusted to match
U.S. dollar fees and pricing tiers to reflect recent changes in currency
exchange rates. Starting Feb. 20 in Canada and the U.S., eBay is reducing its
fees to list items (called "Insertion" fees) by 25 to 50 per cent. eBay is
balancing that change by increasing the fees it charges when an item is sold
(called "Final Value" fees). Sellers prefer this structure, as it lowers their
risk if an item doesn't sell. Donahoe noted to the audience, "Put simply, we
will make more of our money when sellers are successful."
The company is also eliminating fees for its Gallery option, which should
spur sellers to include more photos of the item for sale, something buyers
normally want when they shop.
Coupled with the fee changes, eBay is also making a significant shift in
the way it works with sellers. To start, the company is making its minimum
standards more stringent for anyone who sells on the site, primarily to
discourage behaviour that causes buyer dissatisfaction, such as charging
excessive shipping fees or not describing items accurately.
To this end, eBay will begin decreasing search exposure for the listings
of sellers who have high rates of customer dissatisfaction. Also, the company
will begin requiring a safe payment option, such as PayPal or a major credit
card, for sellers who have lower rates of customer satisfaction or who sell in
categories that have a high number of buyer complaints.
eBay is also setting the bar higher for sellers who aspire to its
PowerSeller program. Qualified PowerSellers will receive valuable fee
discounts and better payment protection from PayPal.
Donahoe also announced that eBay will begin increasing search exposure
for the listings of sellers with the best buyer satisfaction ratings.
"It is our intention to reward great sellers," Donahoe said to the
audience. "Sellers that describe items accurately, ship on time, and ship at a
fair price will enjoy preferential pricing and discounts on eBay. We think
this will significantly improve the buyer experience overall."
Lastly, Donahoe revealed that eBay will update its feedback system to
reinforce healthy, vibrant trading and keep bringing buyers back to eBay.
More details about today's announcement, as well as a replay of the
eCommerce Forum keynote, can be found in eBay's online press room at
The impact of the changes announced today was factored in to the
financial guidance the company issued in conjunction with its fourth quarter
earnings release on Wednesday, Jan. 23, 2008.
For more information, please visit www.ebay.ca.
About eBay Canada
eBay is the World's Online Marketplace(TM) with more than 248 million
registered users worldwide. Founded in 1995, eBay created a powerful platform
for the sale of goods and services by a passionate community of individuals
and businesses. eBay enables trade on a local, national, and international
basis with customized sites in 38 markets around the world. Through an array
of services, such as its payment solution provider PayPal, eBay is enabling
global e-commerce for an ever-growing online community. In Canada, eBay was
visited by more than 11.3 million Canadians in December 2007. (comScore Media
Metrix, December 2007).
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