eBay Announces Lower Fees, Higher Commissions

Change is in the air when it comes to online retail, and we can thank the ever-worrying economy for that one. The R-word (recession) is causing currently employed Americans to start thinking about what to do should they find themselves suddenly unemployed. Many of these businesspeople are considering the option of going into business themselves, and will make marketplace competition that much tougher.

So what does that mean for eBay (EBAY)? It seems that the online marketplace behemoth is continuing to shift its focus from auction site to mega-retailer, courting high power small and medium businesses to sell through eBay's platform. eBay announced today that is is restructuring fees to encourage more listings, which were up in the fourth quarter, reversing two previous quarters of declining listings. It will now cost less to list an item on eBay, but the company will take a larger commision after the item sells. EBay is looking to encourage more people to choose to sell using fixed-price sales, the area where it sees the most potential for growth.

eBay can't be faulted for its changing attitude toward sellers. If a recession hits, the marketplace will change dramatically, and eBay has to be prepared with a plan to keep revenue up and retailers happy. eBay is also facing threats like increased competition from Amazon.com (AMZN) and has to keep their business model flexible.

by Hillary Mark |  01/29/08  |  Stocks: AMZN, EBAY,