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Yahoo! Auctions Restructures User Fees

Yahoo! Tuesday says it is making some subtle changes to its Yahoo! Auctions service.

In response to e-mails form sellers, the Santa Clara, Calif.-based media company says it will introduce a performance-based pricing model on its U.S. auction platform in which sellers will pay based on their success.

Beginning on Nov. 20, 2001, Yahoo! Auctions will begin charging sellers based on the final value of an item sold.

So now Yahoo! will charge a fee ranging from two to one-half percent based on the final value of the item sold.

The company also says it is reducing its listing fees ranging from $0.05 to 0.75 depending on the starting price of the item.

Yahoo! Auctions says it will continue to refund 50 percent of the money sellers spend on various marketing features to promote their auctions, and will begin rebating the second listing fee when an item is posted a second time and sells.

Both moves are meant to undercut the leader in the online auction space, eBay .

"Since introducing a listing fee back in January, we achieved our objective of greatly improving the quality of our site, making it easier for buyers and sellers to connect," says Yahoo! Auctions and Yahoo! Warehouse VP & general manager Norm Hullinger.

Hullinger says Yahoo! Auctions is also launching a community page accessible from the front page of Yahoo! Auctions, where buyers and sellers can come together online to communicate with one another through Yahoo! Message Boards, keep abreast of information and give feedback to Yahoo!'s customer care team.

But how will customers respond? It was this time last year that Yahoo! began charging for its auction service and many users closed their Yahoo! Auctions accounts.

This time around, the company seems less worried about a mass exodus.

"With this new pricing model and recent enhancements to our overall commerce offering, we are strengthening our partnership with the seller community and clearly demonstrating our commitment to our sellers' success," says Hullinger.