*from www.bloomberg.com, Mar. 19, 2013 (To view original article click here.)
Take Away #1: eBay Inc. (EBAY) is overhauling fees for sellers for the first time since 2010, to reduce costs and make pricing simpler.
Key Facts and Figures:
- Fees will range from 4% to 10%, depending on the size of the seller and the type of products sold.
- The company will also stop charging sellers to list most items.
Take Away #2: CEO John Donahoe is taking steps to keep individuals and small businesses from gravitating towards Amazon.com Inc.
Key Facts and Figures:
- Amazon boosted the number of items sold by outside sellers by more than 40% last quarter.
- eBay’s new structure is aimed at quelling criticism that eBay’s pricing is overtly complicated.
- “What we wanted to do was give some transparency around profitability,” said Brian Hsu, eBay’s senior director of pricing.
- eBay’s shares rose 1.5% to $50.87 at 3:04 p.m. in New York.
- Amazon declined 1.2% to $255.79.
Take Away #3: Donahoe, eager to narrow sales-growth gap with Amazon, spent last year simplifying online and mobile shopping experiences.
Key Facts and Figures:
- Donahoe updated the eBay logo and rolled out same-day shipping last year.
- The new pricing structure may help eBay retain merchants who have said it is hard to tell whether it is cheaper to sell on eBay or Amazon.
- The old system may have made eBay seem more expensive than it is for sellers.
- People already on Amazon may now be prompted to get them to experiment with eBay.
Take Away #4: Still, the new structure has many different tiers and varying monthly fees, depending on sales volume, and remains somewhat complicated.
Key Facts and Figures:
- This is a necessary step to compete with Amazon, which charges about 12% per transaction on average.
- eBay separates its sellers into two groups: consumer, or small merchants who may sporadically list a few items a month, and stores, which move higher volumes of merchandise.
- Previously, eBay charged consumer sellers 50 cents to list a product, and tacked on another fee tied to the final price after an item sold.
- The new system assigns those merchants a flat fee of 10%, capped at $250, and as many as 50 free listings a month.
- Fees for eBay stores will range from 4% for lower margin electronics to 9% for higher margin items.
- Stores also have to pay a monthly fee of $19.95 to $199.95 and will get 150-2,500 free listings a month, depending on the type of store set up.
Take Away #5: Top-rated sellers will get a 20% discount.
Key Facts and Figures:
- Top-rated sellers accounted for more than 42% of U.S. merchandise volume in the fourth-quarter.
- “There’s’ a lot of noise out there of Amazon being a competitor to merchants. For some folks, that’s as important as price,” says Scot Wingo of ChannelAdvisor Corp.
- Still, some of eBay’s largest sellers will probably see higher costs, according to ChannelAdvisor.
*To view original article from www.bloomberg.com click here.