Ebay slashes sellers' fees - Seller infact pay more if item sell

EBay Inc. said Tuesday that it will lower the fees it charges sellers to list items as part of an effort keep the online marketplace's increasingly critical users from defecting to rival Web sites.

The move is in response to complaints that the San Jose company charged sellers too much up front. Instead, eBay said it will increase the fees it collects from merchants after an item is sold, reducing their risk if a product fails to find a buyer.

The site is cutting the cost of listing an item for sale by around a third and increasing the fee charged to the vendor for each item sold from about 5.25 per cent to about 7.5 per cent. Those who sell large amounts of items on eBay, classed as power sellers, will get discounts of up to 15 per cent on the final value fees.

EBay is seeking to reverse slowing revenue growth in its marketplaces business, which is roughly half the level of three years ago. The company telegraphed that changes were in store last week when it reported its 2007 year-end results.

The moves initially take effect February 20 in the United States across both auction bidding and fixed price markets. In coming weeks, similar changes will be introduced in Germany and Britain, eBay's No. 2 and No. 3 markets. Eventually, the pricing and other rules changes will take effect worldwide.