Hundreds of eBay online stores closing
Published August 27th, 2006
US Auction Info
Hundreds of eBay Inc. merchandisers say they have closed their online storefronts, and some took their listings elsewhere, in the wake of a controversial fee increase eBay began charging earlier in the week.
The exodus was expected after eBay raised the amount it charges to run an online store. By raising store fees an average of 6%, eBay was hoping many stores would close up shop, thus engineering a return to a mix of lots of auction listings — its most profitable product — and a tiny sliver of items listed for sale in stores, which generate much less revenue for the firm.
Currently, there is about four times the number of items listed for sale in stores than in auctions on eBay.
The imbalance has hit eBay hard. During the second quarter ending July 19, eBay said its profit dropped 14% from a year earlier.
Shares of eBay closed down $1.22, or 4.5%, at $25.78.
