News Column

EBay Takes Aim at Amazon With Revised Seller Fees

March 20, 2013

Amy Martinez

ebay

March 20-->Amazon.com faces a new challenge from Internet rival eBay for the hearts and minds of online merchants.

EBay said Tuesday it's overhauling its seller fees to make them less expensive and easier to understand.

Starting next month, eBay will do away with its complex, tiered pricing and introduce flat-rate fees based on the types of products sold. EBay also said it will stop charging listing fees for most sellers.

The move comes as sellers on Amazon's marketplace criticize the world's largest Internet retailer for raising fees and holding up payments. Amazon sellers filed a class-action lawsuit Friday in U.S. District Court in Seattle, accusing the company of holding their money for more than 90 days in violation of its own terms.

Sucharita Mulpuru, an e-commerce analyst at Forrester Research, said eBay has lost sellers to Amazon's marketplace in recent years and now appears eager to win them back. Third-party merchants accounted for 39 percent of all products sold on Amazon during the fourth quarter, up from 30 percent two years ago.

"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."

The changes follow an effort by eBay last year to make its website more attractive to online shoppers, including better photos, a new logo and same-day delivery in some cities.

"What we've heard from our sellers loud and clear is that they really like what we've done to drive sales," said Michael Jones, vice president of merchant development, adding that the new structure is a response to that feedback.

"We have a very vibrant marketplace. Now we have the most competitive marketplace," he said.

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 of between 4 and 9 percent, depending on the product, plus a subscription fee, and receive up to 2,500 free listings a month.

Amazon charges a commission ranging from 6 to 25 percent, in addition to small fees. Seattle-based Amazon says it has more than 2 million sellers worldwide, versus 25 million at eBay.

Scot Wingo, chief executive of e-commerce consulting firm ChannelAdvisor, said eBay's new fee structure helps sellers compare prices with Amazon. EBay even included a chart that compares its pricing with Amazon's fees, Wingo noted.

EBay, of San Jose, Calif., also aims to set itself apart by playing up the fact it doesn't actually sell products. It mentioned Tuesday that, "unlike other merchants, eBay doesn't compete with our sellers at the marketplace."

"The No. 1 fear sellers have of Amazon is do they compete with me?" Wingo said. "EBay is amplifying that by saying, 'We're not going to compete with you.' They're really coming out swinging."

At the same time, Google is rumored to be building its own marketplace amid reports that it's testing a same-day delivery service with stores, and Walmart is trying to expand its online marketplace.

"To be very clear, we are a technology and services company that helps sellers of all sizes," said eBay's Jones. "What we don't do is buy or make products. We're not a retailer."

An Amazon spokesman did not reply to an email seeking comment Tuesday.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com. On Twitter: @amyemartinez. This story includes information from Bloomberg News.

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(c)2013 The Seattle Times

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