It also decides to increase the shipping rate charges that sellers have no control over.

"The first product line, home entertainment products, has been popular but has also proven to be a very competitive market with thin margins. We have had to make several price adjustments, in an attempt to achieve a stable balance between competitive prices and a fair return for our Sellers and our Supplier. These changes included a recent 4% price reduction that resulted in very competitive retail prices within a catalog that sets the industry standard for depth and breadth of titles. This was accomplished without reductions in seller commissions but, unfortunately, has resulted in an unprofitable situation for Gegy."

...

"The key change is a ¹lowering of commissions from 10% to 7.5% in our Retail Storefronts effective August 1, 2004. This is being done to ensure that the revenue split and pricing model achieves a minimum return to Gegy sufficient to support our operations and growth.

The costs of providing the Retail Storefront service, including comprehensive customer service and returns management, was an important consideration in making the commission rate change."

http://www.gegy.com/news/newsletters/2004/july17-2004.jsp

They even include a graph for those math challenged comparing how badly Gegy is doing compared between a 10% comission rate and the new (Gegy Profit) 7.5% comission rate.