An eBay "at a crossroads" slashes fees: Ebay announced deep fee cuts and other moves Tuesday to bolster what president and CEO-elect John Donahoe said is an online company "at a crossroads."

Donahoe announced the changes at the company's annual eBay Forum in Washington, D.C.

The San Jose online auction site has faced increased competition from Amazon Marketplace but is still the world's largest online auctioneer. It is reducing the fees it charges sellers from 25 to 50 percent and giving breaks to sellers who score highest in customer satisfaction.

Part of that drop includes dropping all charges for posting photos of items and is redesigning its feedback process to exclude negative comments about buyers by sellers. The fee changes were greeted with a relative - for eBay user groups - calm, but the change in feedback is generating a torrent of angry seller postings on eBay message boards.

A Bank of America analyst called the moves no surprise but encouraging and something eBay needed to do. The company's management "as been reluctant to make bold changes" but is moving now to meet eCommerce marketplace challenges, reported BofA analyst Brian J. Pitz.

EBay shares dropped 75 cents a share or 2.79 percent to close at $26.12 a share.

The fee changes vary by country, but starting Feb. 20 in the U.S., sellers should see reductions of 25 to 50 percent when they are charged for listing an item.

If an item doesn't sell, they'll be out of pocket less money. If the item does sell, they'll pay a higher fee. Donahoe said sellers prefer this structure because it lowers their risk.

Photo fees - an obstacle to showing pictures of items for sale - also will be dropped, contributing to the fee reduction.

The auction site is also increasing its standards for its PowerSeller program and decreasing exposure of sellers with high rates of customer dissatisfaction while increasing search exposure for those with high rates of customer satisfaction.

"Great sellers" will get five to 15 percent off final value fees depending on their level of buyer satisfaction, Donahoe said.
Bebop

According to my calculations the fee cuts are only for posting the auction. On a 30 dollar item, after it sells the fees add up to a dollar and some change more than the old rates.

So you only save money if the item doesn't sell.