eBay 2003 Annual Report Download - page 9

Selling Items
Registered sellers can list a product for sale by completing a short online form or using ""Turbo
Lister,'' ""Selling Manager,'' ""Seller's Assistant,'' or third-party tools that facilitate the listing of multiple
items. The seller selects a minimum price for opening bids for the item and chooses whether the sale will
last one, three, Ñve, seven or 10 days. Additionally, a seller may select a reserve price for an item, which is
the minimum price at which the seller is willing to sell the item and is typically higher than the minimum
price set for the opening bid. The reserve price is not disclosed to bidders. Sellers with appropriate
feedback ratings may also choose to use the Buy-It-Now feature at the time of listing, which allows sellers
to name a price at which they would be willing to sell the item to any buyer. Listings that oÅer the
Buy-It-Now feature are conducted in the normal auction-style format, but will also feature a Buy-It-Now
icon and price. Until the Ñrst bid is placed, or in the case of a reserve auction, until the reserve price is
met, buyers have the option to buy the item instantly at the speciÑed price without waiting for the auction
to end. A seller can elect to sell items in individual item listings or, if he or she has multiple identical
items, can elect to hold a ""Dutch Auction.'' For example, an individual wishing to sell 10 identical
watches could hold 10 individual auctions or hold a Dutch Auction in which the 10 highest bidders would
each receive a watch at the price bid by the tenth-highest bidder. To be eligible to hold a Dutch Auction,
a seller must have a suÇciently high feedback rating and must have been a registered seller for at least
60 days. A seller may also specify that an auction will be a private auction. With this format, bidders' user
names are not disclosed on the item screen or bidding-history screen.
Sellers generally pay a nominal listing fee to list items for sale. By paying incremental placement fees,
sellers can have items featured in various ways. For example, a seller can highlight his or her item for sale
by using a bold font for the item heading, have his or her auction displayed as a ""Featured Auction,''
which allows an item to be rotated on the eBay home page, or select the Buy-It-Now feature, which
enables a seller to close an auction instantly once a speciÑed price is reached.
When an auction ends, the eBay system validates whether a bid has exceeded the minimum price, (and
the reserve price, if one has been set). For each successful auction, or if the buyer has elected the
Buy-It-Now feature, we automatically notify the buyer and seller via email, and the buyer and seller can
then complete the transaction independently from us. At the time of the email notification, we generally
charge the seller a final value fee. eBay does not take possession of either the item being sold or the buyer's
payment for the item. Rather, the buyer and seller must independently arrange for the shipment of and
payment for the item, with the buyer typically paying for shipping. We also offer sellers a free checkout
feature that provides a consistent process for exchanging payment and other details at a listing's end. This
process helps sellers get paid faster and reduces the number of emails between buyers and sellers.
Under the terms of eBay's user agreement, if a seller receives one or more bids above the stated
minimum or reserve price, whichever is higher, the seller is obligated to complete a transaction. We have
no power to force the seller or buyer to complete the transaction, other than to suspend them from using
the eBay service in the future. In the event the buyer and seller are unable to complete the transaction
and the seller notiÑes us, we have the right to credit the seller the amount of the Ñnal value fee.
We send invoices for listing, feature and Ñnal value fees using email to sellers on at least a monthly
basis. We require all new sellers to have a credit card account on Ñle. Sellers who pay us by credit card
are charged shortly after the invoice is sent. Our fees vary based on country. Our U.S. listing fees, or
insertion fees, range from $0.30 to list an item with a minimum bid, opening value or reserve price of
under $0.99, to $4.80 to list an item with a minimum bid, opening value or reserve price of $500.00 or
more. In addition to the insertion fee, we charge a Ñnal value fee if the item sells. These Ñnal value fees
range from 5.25% of the Ñnal listing price for items that sell for less than $25.01, to $28.12 plus 1.5% of
the amount over $1,000 for items that sell for over $1,000. The insertion and the Ñnal value fees are higher
for our special category items such as vehicles or real estate. Through our eBay Picture Services, we oÅer
one free picture in each listing, and charge $0.15 for each additional picture. A detailed listing of our
eBay.com fee structure as well as other features available, can be found under ""Selling Fees'' on our
website at www.ebay.com. All pricing is subject to change.
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