Tech Industry

Yahoo auction observers see dive after fees start

The number of auctions listed on the company is plunging weeks after it began charging fees, according to some auction watchers.

Weeks after it began charging listing fees, the number of auctions listed on Yahoo has plunged, according to some auction watchers.

"I've noticed these things drop precipitously," said auction seller Rick Gagliano, who tracks Yahoo's auction listings on his Downtown magazine Web site and calculates that the number of listings has plunged by 82 percent.

A Yahoo representative acknowledged a decline but couldn't confirm any figures, saying Friday that the company only releases listing figures on a quarterly basis. As a result, information regarding the number of listings following the new fee plan will be released in early April.

The representative added that drop is in line with what the company expected when it announced the fee plan in early January.

"We are thrilled with the changes listing fees has made to our site, and the sellers who have stayed are reaping the benefits," said Jackson Holtz, director of consumer public relations.

The new fees, which range from 20 cents to $2.25 depending on the value of the item being sold, have helped to raise the quality--if not quantity--of the items, Holtz said. And despite the drop, the amount of goods actually sold through Yahoo has remained steady and the percentage of auctions that end with a sale has increased. He would not offer specific figures.

Yahoo has not been alone in attempting to pump up the revenues derived from auctions. eBay recently increased its listing fees, and Amazon has announced that it will soon charge sellers a commission on sales. Previously, some sellers were exempt from the fee.

Even start-up auction site has announced that it will begin charging sellers fees based on the final value of the items sold in March.

Gagliano said he tracked the Yahoo decline by counting the number of listings within category and sub-category pages on a weekly basis.

According to his numbers, Yahoo's listings peaked at 2.6 million auctions on Jan. 10, when the new fees went into effect. As of this week, there were about 460,000 listings, Gagliano said.

At Auctionwatch, which provides a listing service that allows people to post multiple items at once on a single site, there has been a 70 percent drop in the number of Yahoo auctions listed through their service, executives said.

If the calculations are correct, they would match initial expectations by some analysts. Henry Blodget, who covers eBay and Yahoo for Merrill Lynch, had originally estimated that the fees would cut Yahoo's listings by 70 percent to 80 percent.

Yahoo auctions were attractive to sellers because they were free and because of Yahoo's enormous traffic, Blodget said.

"If they were giving it away and not making any headway, it's hard to believe they will make headway now that they are charging," Blodget said. "I believe this will be relatively small business for them."

While some sellers say they are going to smaller free sites, others argue that the listing fees mean there are more serious sellers--and buyers--out there.

Sam Golden, who sells Jaz drives and other storage devices on Yahoo, said he's seen a huge jump in the number of auctions he's closing. He usually lists about five to 10 new items each week, and since the listing fees went into effect, the percentage of his auctions that close with a sale has gone from about 15 percent prior to the fees to about 80 percent now.

"Things are better since the listing fees," Golden said. "If the listings drop, it makes me more visible."

But fewer people are bidding, one Auctionwatch member said on a message board.

"I sold items on Yahoo for two-and-a-half years," the person wrote. "It was fun, but I'm not going to lose money. They just don't have the bidders to pay to list."

Many of these sellers say they are returning to eBay or are testing out free auction sites such as and Bidville. Some sellers, Gagliano suggests, are even setting up shop on their own Web sites. That's the route that he's taking to sell his collectible magazines.

"A lot of people are looking at other solutions, Gagliano said. "People are trying different channels."