EBay mollifies enraged small business owners with fee reduction

SAN FRANCISCO — 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 this 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.

Although the company isn't backing off price hikes announced in mid-January, the missive — posted to a popular eBay community site 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.