Tech Industry

Amazon auction fee hike angers sellers

The company is quietly quadrupling its rates on merchants who sell in its auctions and zShops areas, enraging many sellers who say they can no longer afford to offer their goods there.

Amazon.com is quietly quadrupling its rates on merchants who sell in its auctions and zShops areas, enraging many sellers who say they can no longer afford to offer their goods there.

Starting next month, Amazon will charge its auctions and zShops sellers $39.99 a month to list up to 5,000 items. Currently, such sellers pay $9.99 per month to list up to 3,000 items.

The rate increase comes as Amazon adds more services for its sellers and focuses more on business-to-consumer auctions. Jeff Blackburn, general manager of Amazon's auction site, said that despite the price increase, Amazon is still "inexpensive" compared with other auction and store-hosting sites.

"Anyone who is seriously selling through Amazon knows this is a great deal," Blackburn said. Amazon recently notified sellers by posting a notice on the site.

But on message boards on Amazon's site and at AuctionWatch.com, which helps people manage their auctions, many sellers begged to differ.

Lisa Simen, of Toledo, Ohio, said she "hates" the new listing fee. Simen, who has auctioned Beanie Babies, CDs and books through Amazon for the past year, said she is in the middle of moving all of her items over to eBay.

"Sales are way down for me, and the $39.99 fee is more than what I've made in profits in the past few months," Simen said.

The price increase is only the latest change for sellers on Amazon. In recent weeks, the e-commerce giant has opened a new outlet for surplus and damaged goods and has revamped its zShops area, allowing sellers to create personalized storefronts for the first time.

Auction analyst Mark Gambale said Amazon is trying to reposition its auction site to better compete against eBay. Instead of going head-to-head with eBay in person-to-person auctions, Amazon is trying to create a place that offers unique merchandise from well-known sellers, he said, pointing to recent Amazon auctions of items from the movies "American Beauty" and "Gladiator."

"They're never going to get the depth and breadth of what eBay has," said Gambale, of research firm Gomez. "But if they can create in the consumer's mind that they are likely to find something quite unique on Amazon, that's one way that they are trying to compete."

Perhaps the biggest and most controversial change was made to the way Amazon organizes its listings.

Previously, the company listed auctions in each category according to how soon they would close, just as eBay does. Now, however, sellers can pay for featured placement in the listing, and items that have received bids are placed higher than those that haven't.

Blackburn said that selling on Amazon Auctions is up since it launched the new selling feature. But small sellers such as Loves Park, Ill., resident Sandy Atkinson say the changes have meant a precipitous drop in sales.

Atkinson, who typically lists about 100 items a month on Amazon Auctions and another 50 on zShops, said that the number of items she sells has dropped from about 30 to 35 a month to about three or four.

Atkinson, who sells music boxes, Coca-Cola-related items and Disney paraphernalia, said she was thinking of closing her account before she knew about the rate increase. Now she's in the process of moving her items over to Yahoo and other online auction sites.

"It looks to me like they don't want all of us little people," Atkinson said. "They could have just said so. I would have left gracefully."

Blackburn said that Amazon wants to help everyone sell better in its zShops and auctions areas. But Forrester Research analyst David Cooperstein said that the price increase indicates that Amazon is trying to "weed out" some of its weaker sellers.

"They're probably trying to get more revenues from better sellers," Cooperstein said. "If anybody could raise prices it would be Amazon. They probably have the track record to prove it's worth paying extra money."

News.com's Stefanie Olsen contributed to this report.