According to some initial seller feedback and a recent Fortune roundup, eBay sellers are irate about eBay’s recent fee change–in part because, for many, it represented an increase presented as a price cut. eBay sellers are a rowdy, vocal lot, so isolated screams need to be taken with a grain of salt. But given the volume of this latest protest, it seems conceivable that eBay might have to cave and reverse (or at least adjust) the fee changes.
As we said yesterday, we believe eBay blew the fee change. We think the company should have cut fees across the board by at least 25% to compete with Amazon, Google, and other viable alternatives that didn’t really exist five years ago. The stock is already in the tank, so the market would likely have forgiven the expectation of a rebuilding year in 2008. Instead, eBay tried to have its cake and eat it, too–dropping listing fees but jacking final value fees so as to maintain (or even increase) its take rate.
Unless eBay finds a way to significantly improve its value proposition for sellers, we believe the company will continue to lose users (the organic user base probably shrank in Q4, something that would have been unthinkable only a few years ago). A stealth price increase, in our opinion, isn’t the way to do it. So we wouldn’t be surprised if eBay soon backtracks and adjusts its new fee structure–just as it was forced to do after a similar fee change a few years back.
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