eBay is taking on Internet retail giant Amazon by implementing new seller fees that are easy to understand and operate at a reduced seller cost.
eBay has put up a huge challenge for Internet retail giant Amazon with a move that is sure to win the hearts of many. San Jose, Calif.-based eBay announced Tuesday that it will implement new seller fees that will reduce the cost and make their pricing easier to understand. From next month, eBay will stop using its current complex, tiered pricing and introduce flat-rate fees based on the types of products sold. Additionally, it will also stop charging listing fees for most sellers.
The move is in complete contrast to the move Amazon made by raising fees and holding up payments, which gathered a ton of criticism. Sellers filed a lawsuit against the company Friday, accusing it of holding their money for more than 90 days, which is against the company's own terms and conditions.
eBay has lost customers to Amazon and by this new move, the company hopes to win some of them back, said Sucharita Mulpuru, an e-commerce analyst at Forrester Research.
"For the most part, fees have only ever gone up over time, and this is basically cutting fees. It's kind of war," Mulpuru said. "It certainly makes a compelling case for merchants, especially those who've been burned by Amazon, to go back and give eBay a chance."
This is not the first time eBay has implemented changes to lure customers to their website. In an attempt to attract more customers, the website added better photos and a new logo along with a promise of same day delivery in some cities in the U.S. last year.
Michael Jones, vice president of merchant development, said that sellers have responded very positively to the new structure and have whole-heartedly approved of it.
For small-volume sellers, eBay will offer 50 free listings a month and take a 10 percent cut of each sale. Previously, eBay charged them 50 cents to list a product, as well as a fee tied to the sale price.
Larger sellers, called eBay Stores, will pay fees between 4 and 9 percent, depending on the product, plus a subscription fee, and receive up to 2,500 free listings a month.
