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eBay listings plummet in France

French auction sellers are pulling their products from the Web site after the online auction giant tells them to pay up or pack up.

French auctions sellers are pulling their products from eBay after the online auction giant told them to pay up or pack up.

The number of auctions listed on eBay.fr dropped from more than 300,000 to about 37,000 auctions Monday, said Jeetil Patel, an analyst with Deutsche Banc Alex Brown.

eBay, which already charged sellers on its French site a transaction fee when they sold an item, is charging the new fees when sellers list items on the site. The fees range from about 13 cents (0.15 euros) to about $2.11 (2.40 euros).

The company warned its French users in February that it would be charging the new listing fees. In a note on its announcements board, the company acknowledged that listings might drop but said that the new fee would benefit sellers.

"The reduction of listings will greatly increase the visibility of your items," the company said in its note. "We are aware that these expenses may represent a new burden for you. However, we believe and hope you will see that this change represents a true opportunity for the development of your sales and your effectiveness on eBay."

eBay representatives did not return repeated calls seeking comment.

Auction companies typically introduce listing fees to increase revenue and clean up some of the excess items on their sites. The fees tend to prompt sellers to only list those items they think will sell.

But such fees often irritate sellers, many of whom are far happier to pay a commission on their sales once they've sold something than to pay to list an item regardless of whether it sells.

Two years ago Yahoo seemed poised to challenge eBay in auctions in the United States--with its listings growing to more than 2 million auctions--until it introduced similar fees last year. Its listings dropped by more than 80 percent. While Yahoo reported that the percentage of auctions that closed successfully increased after the introduction of fees, the company has since been unable to challenge eBay's primacy in auctions.

Similar to one eBay introduced on its U.S. site several years ago, the new fee structure at eBay.fr is tiered so that sellers with more valuable items pay a larger listing fee. The fee on more expensive items is proportionately less than that on less expensive items.

Thus, a seller who offers an item with a starting price between $0 to $1.75, for example, will pay a listing fee of about 13 cents, or more than 7 percent. In contrast, a seller whose item has a starting price of more than $87.93 will pay a listing fee of about $2.11, or about 2.4 percent.

eBay charges a separate transaction fee on its French site, which ranges from 1.5 percent to 5 percent of the final price of the item, depending on the item's value.

Noting eBay's recent retreat from Japan, Rick Gagliano, who periodically tracks auction listings for his Wednesday Report newsletter, said the listings drop in France could indicate that the company is having problems adjusting to the French culture as well as the Japanese one. The drop-off indicates that French users don't want to pay a listing fee, he said.

"They instituted a fee and the sellers rejected it, I guess," Gagliano said.

The drop-off isn't an immediate concern because eBay gets little revenue from its French site, said Steve Weinstein, a financial analyst who covers eBay for Pacific Crest. eBay has seen its listings fall or plateau after introducing or raising fees on its other sites. Typically, the listings rebound after a short amount of time after sellers grow accustomed to the charges.

But the listings decline would be a concern if it continues into next year and the future, when eBay expects to see significant revenue from its French and other, smaller European sites, Weinstein said.

"The big European markets--Germany and the United Kingdom--those continue to do well," he said. "Those are the only material markets in Europe in the near term."

Meanwhile, the listing fees could actually benefit eBay's French site, Patel said. Not only will they clean up the listings, but they will bring in a new source of revenue, he said.

"Is this a negative? Probably not," Patel said. The new fees will "act as a self-policing mechanism to encourage sellers to clean up poor inventory and poorly merchandised product on the site. It basically allows eBay to keep its content fresh or relevant to the buyer."