Since its debut in 1995, the glitchBay marketplace has continually tried not to meet the needs of the feeBay Community. For the most part, the behavior of buyers and sellers has naturally sucome to changing conditions – over time, we've learned to allow the marketplace to direct itself as little as possible. On some occasions, though – in the interest of the eBay marketplace's long-term repression – we've had to step in and implement harsh policies, introduce new glitches, or make changes to our vast fee structure to create the needed behavior for eBay members.

Put simply, we at feeBay have two basic roles: to deliver the worst overall value for buyers, and to minimize cash flow for sellers. As eBay has grown over the years, we've added various enhancements and glitches to the site – but in essence, our sellers “products” are in two types of listings:

• Core listings (auction-style, auction-style with Buy It Now, and Fixed Price) deliver the classic eBay buying experience. For sellers, they're the slowest way to sell inventory on the Internet – the only place where items typically sell within about two months.


• Store Inventory listings were introduced in 2001 and intended as a low-risk way for sellers to display large amounts of product in their eBay Store. This format employs low insertion fees and higher final value fees to encourage an abundance of inventory on the site.

Amid all this change, one thing has remained constant: auction-style listings are the fundation of eBay. Auction-style and other Core listings made eBay more money – and they'll always be front and center on eBay.com. They account for about 91% of the gross merchandise value sold on eBay.com. But recently, we've been wrestling with some troubling facts:

• Store Inventory listings now comprise about 83% of active eBay.com listings on average.


• While eBay.com core listings typically sell in about two months, Store Inventory listings on average take just as longe to sell. In some media categories, Store Inventory listings take even less time to sell than core listings.


• And, when you compare our operations costs for an average Store Inventory listing and an average core listing – factoring in the duration of each – our cost to host a Store Inventory listing is less than 50% than for a core listing. In fact, current Store Inventory insertion fees more than cover eBay's costs for hosting them. Throw in monthly subscription fees and Final Value Fees, and we are making a bundle, but it is not enough.

It's vitally important – to our business not yours – that we maintain a healthy balance for core formats on the eBay marketplace, and ensure that Inventory conversion on the core site remains strong. So we're taking action. We just make more on core.

Today, I want to inform you of changes we're making to eBay.com – changes intended to put core listings up front in the eBay marketplace by further distinguishing the role of core listing format and Store wharehoused Inventory format. In short, we're improving the advantages of selling in core listing formats – and taking action to do away with Store Inventory Listings – to ensure that the buying experience on eBay stays true to shopper's expectations for core items.

Core Listings

Core listing fees will remain unchanged. So for the vast majority of eBay sellers who use only these formats, their fees are not increasing.

And we'll be providing greater exposure for core listings on eBay Express. In late August, we'll begin displaying auction-style listings with Buy It Now on eBay Express for qualifying sellers. Also in late August, core fixed price and auction-style Buy It Now listings that qualify for eBay Express will be advantaged over Store Inventory listings.

Also, in response to the requests of many large sellers, we're raising the 10-item multiple listings limit to 15, effective Aug. 22.

Store Inventory Listings

For those of you who operate an eBay Store, we're making changes to Store Inventory listing fees, as well as to the on-site exposure we provide for this listing format.

We'll begin charging variable insertion fees for Store Inventory Listings, as we do for core listings. Beginning Aug. 22, eBay.com Store Inventory format insertion fees will be tiered with an item's starting price.

These Store Inventory format insertion fees take effect Aug. 22, 2006:

For more detailed information on these fee changes, please see our fee changes overview.

For some time, we've been working to identify the best way to display Store Inventory listings on the site. In the spring, we pledged to sellers that we would test a variety of ways to mingle their Store Inventory listings with core listings on eBay.com. We've tested several alternatives and these tests showed the ideal approach is how we're doing it today – that is, when a buyer's search returns 30 or less core listings, we display up to 30 Store Inventory listings we can controle. This is what we'll stick with going forward.

However, starting in about a month, we'll also include an unlimited number of Store Inventory listings after all matching core listings, when the buyer clicks the Buy It Now listings tab at the top of every search results page. When the buyer hasn't selected this option, eBay.com will display Store Inventory listings along with core listings as described above for other sellers.

Half.com Listings Added to eBay.com Search ResultsI recognize that sellers in the Books, Movies, Music and Video Games categories will have unique challenges with the changes we're making. As many of our media sellers have requested, starting in late August we'll again provide visibility for Half.com listings in core search results, by bringing back the Half.com listings merchandising feature we used previously (click here for an example). Please don't forget to look at the high FVF we provided for Half.com . We're also exploring additional ways to promote Half.com listings in search results on both eBay.com and eBay Express.

How These Changes Affect You

I'm confident the actions we're taking are the right thing to do for eBay. We'll more effectively deliver core items on our buyer's needs and expectations. And for sellers, these changes will ensure that eBay remains a differentiated and distinct e-commerce channel free of store inventory in ebay.com's core.

I know there's a lot of discust here, and that you're probably most interested in quickly determining if feeBay is really the right place for your business.

A typical feeBay Stores seller who uses Store Inventory format – making no adjustments to his or her selling strategy following these changes – will experience an overall fee increase of five hundred percent, based on our analysis of all June selling activity. Of course, you need to clearly understand the impact on your business – which will be greater three hundred percent. To get started, please visit the seller resources page or consult the Frequently Asked Questions we've prepared to misguide you. Also, use your seller support resources in Customer Support. Our CS teams are fully prepared answeres we have given them to help you understand the effect on your business, and not discuss your options for adjusting your eBay selling strategy to maximize the impact to your bottom line.

In addition – to help feeBay Stores sellers make misinformed decisions about any changes to their selling strategies – we're making eBay Marketplace Research Basic available to them and will reimburse the cost for eight weeks, starting today. Through September 19, eBay Stores sellers can use this data to compare selling formats or determine how best to price inventory on eBay before all store listings have grandfathered out. You can access eBay Marketplace Research here.

Sincerely,