EBay Just Wants to Sell: Moving Away From Auctions
Today, eBay announced a number of changes to its fee structure, which will emphasize fixed-price sales over eBay's traditional auctions. Fixed-price sales have been growing at a faster rate than auctions for eBay, so emphasizing this business model makes a lot of sense for eBay. To do so, the company has reduced the price to list an item for a fixed price by over 70% to 35 cents and sellers can now list multiple quantities of the same item for the same price.
The new price structure will take effect on September 16th and is clearly timed in order to increase business for the upcoming holiday season. eBay will also make similar changes to its sites in England and Germany. Of course, the last time eBay made changes to its pricing structure earlier this year, it drew the ire of its most valuable sellers, who quickly initiated a boycott. Now, eBay is moving to simplify the pricing structure that upset its customers so much earlier this year.
Final Value Fees
While the listing fees have been reduced substantially, the overall fees for a listing still includes what eBay calls a 'final value fee,' which is determined by the sales price of the item to be sold. These fees have been simplified, but also increased. Overall, however, this change in eBay's pricing structure could result in substantially lower cost for a lot of eBay's sellers.
Consumers Don't Want Auctions
As Laurie J. Flynn in the New York Times points out, these changes are also driven by a change in consumer behavior online. There is simply less interest in the auction model these days, which, even though it might be very exciting, just isn't as convenient as just heading over to Amazon and buying a product right away.
And Amazon is exactly the company that eBay should fear the most. For consumers buying anything on Amazon is easier (and often cheaper) than going to eBay - and it isn't loaded with the same potential for fraud. Amazon is also constantly making it easier for sellers to list their items in its database.
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No wonder, even Craigslist performs better than eBay to find what you're looking in a matter of seconds. eBay's auction system makes the buying process so complicated! Plus you don't even know if you're going to get the thing you ordered (or bid on). When I really want something, I go to the store, because I know I'll get it right away. Transactions are high when access to the product is direct and simple.
I can totally see why they did this. From my perspective, I never look at auctions anymore - I always select show me buy it now only. I think the original bargain hunters on ebay loved the auction aspect, the feel of "winning" something, but now it's just another place to buy stuff - and if there are a hundred of the same laptop, I don't want to wait 3 days and see if maybe I won something, I just want buy it and get my items. It used to be consumer to consumer auctions, but with supersellers it's really just business to consumer for many common items now. Often I'll visit ebay and find the same item from the same merchant whose website I was one - except it's 10% cheaper on ebay through their ebay store.
eBay has continued to ostracize it's driving force, it's sellers, and is on the road to self destruction. Initially by raising seller fees, then by implementing their own super buggy low-payout affiliate network (eBay Partner Network) that forced many sellers to finally call it quits, and now by moving away from their bread and butter (i.e. auctions). There's no way eBay can compete against Amazon. Why would any seller or buyer want to stay with eBay when Amazon has so many merchants to choose from and can ultimately find any new or used product for the lowest price? Moreover I expect Amazon's WebStore service to provide a great alternative home to all those disgruntle eBay sellers.
"There is simply less interest in the auction model these days, which, even though it might be very exciting, just isn't as convenient as just heading over to Amazon and buying a product right away."
which is true - *for products* - but as an individual with surplus stuff to clear out, ebay was a very attractive option - a global market with prices going up, rather than being knocked down from your asking price (the traditional garage sale, card in the window model), so objects found their own value.
recent changes (no seller allowed to give buyer negative feedback) and the upcoming trend to favour BIN pricing, looks to me to be opening a gap.
anyone got a fledgeling auction site?
;o)
Tony,
Check us out at Dawdle - http://www.dawdle.com - we're the largest online marketplace for new and used video games, systems, and accessories. We're now the cheapest media marketplace with 11.99% commissions as opposed to the 15% plus fees on Amazon, eBay, and Half. (We just tried to be price neutral with eBay when we soft-launched last November.)
There are plenty of other marketplaces, such as Etsy, TIAS, and Abebooks that may have what you need in certain niches.
“This is a half-hearted attempt by eBay to address recent seller complaints: they essentially appear to be just subtracting fees on one end and adding them to the other. I’d be surprised if online sellers fall for this. They are more savvy now than ever and know the profits they want to earn, which is why we developed www.Wigix.com to be very straightforward with a simple, transparent fee structure (no listing fees and no limitations on listing periods) that allows sellers to keep their profits.”