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Sellers irate over auction fee hikes

Upset auction sellers are threatening to take their business elsewhere after the recent one-two punch of Yahoo Auctions charging fees and eBay raising their fees.

4 min read
Upset auction sellers are threatening to take their business elsewhere after the recent one-two punch of Yahoo Auctions charging fees and eBay raising their fees.

And while eBay may be able to shake off any long-term impact, Yahoo's move was considered much more dramatic by industry watchers. Yahoo had been essentially the last large free auction site on the Web before they decided to start charging listing fees.

"Will eBay lose in the long run? To a certain degree, but not enough to affect them and not enough so that they care," said Rosalinda Baldwin, who tracks online auctions as editor of The Auction Guild, an online newsletter.

But Yahoo's move was "suicidal," she said, pointing to a sharp drop off in listings on Yahoo Auctions.

AuctionWatch.com Chief Operating Officer Dan Neary said the number of auctions listed on Yahoo through his company's listing services has dropped more than 50 percent since the fee increase went into effect earlier this month. In contrast, AuctionWatch has not seen a significant change in the number of listings on eBay to date.

Yahoo spokeswoman Nancy Gallinghouse said the reaction to its listing fees were "in line with our expectations. No surprises."

Yahoo started charging the listing fees earlier this month amid concern about a downturn in online advertising revenues. The portal giant later announced that while its fourth-quarter earnings met Wall Street expectations, it expected that its 2001 earnings would come in below analysts' projections.

The following week, eBay announced that it was raising its fees, in some cases by up to 65 percent. Unlike Yahoo, eBay not only beat analysts fourth-quarter expectations, it raised its projections for 2001 earnings.

eBay's new fees will take effect on Jan. 31. Sellers began paying the new listing fees at Yahoo on Jan. 10.

Some eBay sellers have threatened to boycott the online auction site to protest the new fees and have even put together a Web site to promote the boycott. eBay members have threatened boycotts in the past, but they have never had a noticeable, long-term affect on the site.

Instead of boycotting, some eBay members say they will stop using services, such as featured listings and photo promotions, that they have to pay extra for. But in the end, most sellers will probably stick with eBay, said The Auction Guild's Baldwin.

eBay spokesman Kevin Pursglove said that the immediate reaction on the company's message boards to its listing fees was unfavorable, but that sentiment seems to have died down, he said. The company is aware of the boycott movement, but isn't particularly concerned about it, he said.

"We don't want our users to take their listings anywhere else, but we think in the long run users will recognize the value of the eBay marketplace," he said.

For online auction seller Richard Fulton, the new fees mean it's back to the future.

Last year, Fulton stopped selling his Civil War memorabilia and collectibles on eBay after being a seller there for about two years. Upset over recurring outages and other issues, the Perkasie, Penn., resident shifted most of his inventory over to Yahoo Auctions.

But now Yahoo's new fees have him shifting back to eBay. He says he plans to stick it out, despite eBay's own fee hike.

"We're all running back to eBay right now, eating McCrow sandwiches and loving it," Fulton said. "I think everyone is so ticked at Yahoo, they're not noticing what they're paying at eBay."

The message boards at AuctionWatch and other sites suggest Fulton is not alone.

Nancy, a seller from Sumner, Wash., who declined to give her last name, said that she will no longer list on Yahoo. Instead, she said that she is exploring some of the smaller auction sites and, if necessary, will return to eBay, where she sold previously.

"Yahoo was adequate and I would have stayed until they stabbed the sellers in the back when they announced the fees and refused to listen to sellers' concerns," Nancy said in an e-mail to CNET News.com. "I will not be paying the fees on Yahoo. The traffic does not warrant it."

"They're resentful, they're angry, they're not happy about it," Baldwin said. But she added, "Overall, I think people will just grit their teeth and go with it."

Some smaller sites have seen a boom in traffic and listings in the wake of the fee announcements. eBay and Yahoo sellers say they have begun to list their items on free sites such as Pootah.com, AuXPal.com and BidBay.com.

DutchBid.com President Eric Rosenberg said traffic on his online auction site is 20 percent higher now than before Yahoo decided to charge listing fees. Meanwhile, James Kim, chief executive of ePier, said the number of page views on his site has gone up 5 times since Yahoo's announcement.

"We're getting a lot of new users, that's for sure," Rosenberg said. "Folks have been looking for a new home. This opens their eyes to other options."

But the increased attention has not been without cost. Plagued by service problems, Pootah is in the process of moving their auctions to a new server. ePier's Kim said that his company will have to add additional servers to handle the surge in traffic.

The new traffic and listings haven't necessarily led to an upswing in bidders or sales. Many of the listings on the smaller auctions sites have no bids at all.

Fulton said after leaving Yahoo, he moved his collectible coins on to Pootah. Although most of his auctions have closed without bids, he plans to keep them on Pootah for a while because the site's management has been responsive to his requests for new categories and tools.

"I'll probably keep some stuff there just to support their efforts," he said.