Rate Hike Causes Sellers To Drop eBay

    August 25, 2006

Frustrated customers often threaten that they’ll never shop at a store again. Now, a number of online retailers have become angry at eBay, and many of them claim they’ll never again sell on the site.

This is due to a recently implemented rate hike, which resulted in a number of protests and boycotts, as well.

eBay intended for at least some of this to occur – the fee increase was supposed to make selling items through a store less advantageous, as compared to selling them at open auction.

However, the online auction site probably didn’t want sellers to abandon it entirely.

According to MarketWatch, the impact is already being felt.

“A number of former eBay merchandisers say they’re shifting their listings to Amazon.com Inc., Google Inc. and its Google Base free classifieds listings, plus a host of other eBay competitors,” writer Ben Charny stated.

At least one notable outsider thought the rate hike was a bad idea.

The same article included a “notably dour prediction about the effort” from Piper Jaffray & Co analyst Safa Rashtchy: “eBay is plagued by other problems that a fee increase won’t cure.”

The fee increase is arguably creating (or at least exacerbating) some problems. One group has grown so frustrated with eBay that it named itself “Google We Need An Auction Site.”

Between August 15 and August 25, the group gained 99 new members, which represents an increase of about 20 percent.

eBay’s numbers have been slipping for some time now, and the figures are similarly discouraging. “During the second quarter ending July 19, eBay said its profit dropped 14% from a year earlier,” MarketWatch reported. And the company’s share price has declined about $20 from its 52-week high.

If the rate hike fails, expect the slide to continue.


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Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.