eBay Eats Humble Pie On Fee Hikes

Less than a month after announcing a price hike that enraged small business owners, eBay Inc. said it would reduce some fees and promised to improve customer service.

The online auction giant said in a Web posting Sunday it would credit $15.95 — the cost of a one-month subscription — to small business owners who operate "eBay Stores" in April. EBay also announced it would reduce the minimum fee for inexpensive auction items from 30 cents to 25 cents, starting Monday morning.

Bill Cobb, who became president of eBay North America in December, said in an e-mail to eBay buyers and sellers that the company would provide more pricing details in upcoming weeks.

Buyers don't pay fees to eBay, only sellers.

Although the company isn't backing off price hikes announced in mid-January, the missive — sent to eBay users Sunday morning — struck a conciliatory tone and might repair bruised relations with small business owners.

"There's a lot on your minds right now. I've been taking it all in and thinking hard about how we can make sure eBay remains a fun, safe place to trade, and a prosperous home for our many dedicated sellers," Cobb wrote. "We're listening to everything you have to say."

In mid-January, eBay warned sellers in a terse e-mail that the monthly subscription fee for people who operate "Basic eBay Stores" would increase from $9.95 to $15.95, and the fee for a standard listing of 10 days would double, from 20 cents to 40 cents.

The price hikes — which could dent profits for thousands of small business owners who hawk clothing, electronics and other low-margin commodities on eBay — are still expected to go into effect Feb. 18.

For the past three weeks, eBay sellers have peppered executives with angry e-mails, threatening to increase the prices that buyers pay, close their stores or defect to auctions hosted by Yahoo.com or plucky startups.

The price hike, combined with eBay's dominance in the auction and online payment sectors, prompted some members to ask whether the government or a fair-business consortium should regulate fee structures so small-scale entrepreneurs don't get gouged.

Cobb's letter appeared to mollify some sellers, including Lynn Parker of Beaverton, Ore., who designs and sells custom Renaissance, Napoleonic, Baroque, Halloween and bridal costumes on eBay. Although she had never previously been involved in eBay sellers' chat groups, she spearheaded a letter-writing campaign to eBay executives to complain about the price hike.

"I feel this is a good faith effort to retrieve confidence lost," Parker said of the credit and minimum fee decrease. "There has to be a time for healing, as many people have had their livelihoods affected by what seemed to be dictated by corporate greed."

"They can no longer raise fees and have people just accept it because there is no reasonable alternative," said Todd Ronnei of Eden Prairie, Minn., on the stamp collecting message board of The Virtual Stamp Club. "They've got a mini-revolt on their hands, and they have to squash it or there will be another lackluster quarter for stockholders."

Cobb also announced Sunday that the San Jose, Calif.-based company would improve customer support services in the U.S. and Canada.

Within the next 90 days, eBay will stop sending automated e-mail responses to buyers and sellers who send questions to customer service representatives.

Instead, Cobb promised, people will "hear from a human being who will try to help you with your problem or question right off the bat." The company will only use automated responses to acknowledge receipt of spam or policy violation reports.

Ebay also expanded the number of sellers who may call a telephone line for live help. Phone support is now only available to high-volume "PowerSellers," but starting April 1 it will be available to all eBay Stores owners.