EBay's New Fixed-Price Move: Amazon Envy?

Can eBay (EBAY) still be eBay as it moves toward a fixed pricing model?

Possibly, but it’s going to be really difficult to change its auctioneer image. On Wednesday, eBay announced new fee changes. It is lowering its listing fees for sellers that use the “Buy it Now” fixed price feature by 70 percent. Sellers can now list multiple items under Buy it Now for 35 cents for a 30-day listing period.

That fee is a big carrot to encourage sellers to use fixed pricing. The new listing fees take effect Sept. 16. In a statement, eBay said  “The change is the most competitive pricing eBay has ever offered sellers.” Previously sellers on eBay had to pay more per item listed.

The company has multiple examples in its statement and site of potential savings, but each seller will have a different result.

The broader question is whether eBay’s Amazon envy makes sense.

Let’s face it. This move by eBay is all about Amazon (AMZN). Amazon's fixed price structure is easier. And to be honest I have always viewed eBay as the shop of last resort (like when you can’t get your kid a hot toy because you procrastinated). I don’t have the time or inclination to monitor some auction. Give me a price and I’ll pay it or walk.

Amazon comes in with its third party selling network and gives eBay a run. Now eBay is downplaying its auction heritage to appear to be a more conventional e-tailer.

The problem here is perception. Clearly eBay wants to hang on to its sellers and prod them into putting more inventory on the site. And sellers are likely to be happy with lower fees for fixed price goods. But there’s also a consumer angle here.

EBay in its statement noted that the fee reductions will set it up nicely for the holiday shopping season. The question, however, remains: Will consumers go to eBay to buy something over Amazon? Probably not. eBay noted in its statement:

While the pricing changes take effect in September, other improvements to the buyer experience on eBay will occur in phases through November. Buyers shopping for a great deal on eBay can expect to find greater selection at better prices than ever before. Improvements to eBay’s product search will make it easier for buyers to find the best deal on the product that’s right for them. Buyers who complete their purchase with PayPal, the safer way to pay and be paid online, will enjoy buyer protection. PayPal will offer protection for the full purchase price and original shipping costs on eligible transactions paid with PayPal at no additional cost to the buyer.

That’s a long-winded way to say shopping on eBay was too damn hard. You don’t turn that around overnight on the perception front.

Comments

[sign9:]

I really like how ebay's examples ALL assume that you relisted the item three times before it sold.... If you assume that it sells on the first go 'round, then the fees are UP substantially - not down.....

2008 Aug 20 04:35 PM

[Tony P.:]

"I don’t have the time or inclination to monitor some auction. Give me a price and I’ll pay it or walk."


I understand, believe me, I do. I've used ebay to auction my Old Crap to a specific group of people known as Collectors,and have done so since 1999. Over the years, prolly half have left ebay (for good, more or less) due to ebay pissing them off.

For several years now Ebay has been on an Improving Quest, which isn't conducive to the Collector-Buyers' interest. What is ebay's quest? To provide the growth-crack that the Street has demanded from them.

Sorry, but the dealer is OUT of product. It just ain't gonna happen, any more. Too bad ebay and the street didn't just stick with those Collectors and nurture that business. Heck, it still accounts for 57% of the business, yet ebay says it's in decline.

Sure it's in decline, when you turn your back on something and ignore it, it does tend to drift away. When you call it Noise, it does have a tendency to become a bit absent.

Too much negativity? You want some constructive help? How about ebay lowers the auction fees and sets it up so that high-dollar items don't bear a disproportionate fee amount.

That would actually undo the last couple of "fee decreases" (which weren't!) and might even return some quality items to the site. Understand? Try not to beat the living chit out of the items that could possibly bring back the magic and the fun.

It ain't everyone's cup o' tea, that is for certain, but it did take ebay to the dance where they were playing that song from long ago... $52 per share. It was a fairly sure thing then and it is still waiting over in the corner, wanting to dance.

2008 Aug 20 05:47 PM

[nadine:]

Larry, don't be fooled by ebay's usual bs. They have changed the fee structure so that different categories pay different back-end fees. For most categories, it is a BIG increase. The examples ebay quoted were from the few categories that did not see an increase. Go look at the schedule, otherwise you're just spreading misinformation.

2008 Aug 20 10:48 PM

[ebaywonderland:]

There is nothing good in the bulk of the policy changes since February of this year, this latest round is another set of bad policy. Forcing paypal be announcing policy that personal checks and money orders can no longer be forms of payments offered for goods come October gives ebay another way to ring up the cut they take from sellers.

In ten years on ebay I've never seen such insanity and rapid fire changes that are driving good sellers away and watching ebay ditch a once viable and leading venue.

They have thrown away the business model that brought them solid success and now are trying to be a wannabe Amazon.

What a huge waste.

2008 Aug 21 08:37 AM

[User 247417:]

“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 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.”

2008 Aug 21 02:11 PM

[Et tu, Brute!:]

Response to Tony P:

I think you have hit the nail directly on the head. For years now ebay has attempted to pry the buyer's interest away from the special and unique. This last year, especially 2008, proves this.

I agree wtih you absolutely! The prized market could have continued to thrive if ebay had not set about trying to smash it! Look how hard it's been to destroy!

Idiots!!!

2008 Aug 21 08:36 PM