Current Strategies of eBay
* Fixed-price listings would be favored over auctions
* A new fee structure would drop the cost of listing an item but increase eBay’s cut when the item is sold * A new search engine algorithm would give top billing to items based on price and customer satisfaction rating * Seller feedback to buyers would be eliminated
* Fee reduction for highly rated sellers, fixed-price listing, and sellers offering free shipping is implemented Q: Do you agree or disagree with Donahoe that eBay’s current strategy doesn’t mean that certain sellers will lose? A: No, I disagree.
Let’s look through some of the strategies and analyze them. To compete in the fixed-price marketplace, eBay enacted a series of policies and site changes that favored power sellers at the expense of smaller sellers. As casual sellers abandoned the site, buyers have migrated elsewhere. Not only are fewer shoppers returning to the site, but average order values have stagnated at around $28. Since eBay’s marketplace revenues are driven by fees charged to sellers, declining traffic and flat transaction values have led eBay to raise its fees in hopes of meeting Wall Street’s expectations. As a result, eBay is squeezing the very sellers on whose backs the success of its business rests. By focusing so much on fixed-priced items sold by large sellers, eBay has blurred the distinction between it and the litany of shopping comparison sites and tools on the web. In so doing, eBay has traded away much of the brand equity that once set it apart from the rest of the online retailing universe. With its greater emphasis on fixed-priced goods, it’s not surprising that eBay has seen a steady increase in the number of shoppers making "Buy-It-Now" purchases over the past year. However gains in fixed-priced activity have been eclipsed by declines in eBay’s traditional auction business. The percentage of eBay’s traffic that made a bid on an auction-style listing dropped from 13.5% in February 2009 to 12.2% March 2009. In total, 1.5 million fewer shoppers placed a bid on eBay in that month.
The more eBay has tried to be a retailer, the more its customers have gravitated to sites offering better overall shopping experiences with lower total prices, better customer service, and predictable deliveries. The percentage of eBay’s visitors who shopped at Amazon jumped from 41% in February 2008 to 53% last month. Over the same period, Amazon visitors’ cross-shopping of eBay has remained unchanged at 58%, suggesting eBay’s fixed-price strategy has failed to attract significant numbers of new shoppers to the site.
BookSalefinder.com just released the results of a recent survey done to thousands of used book sellers. There are many online sales venues for books, each with its own rules and fees. Many book dealers list their books with multiple online services, and some maintain a private web site for purchases. We asked the dealers to tell us which online venue accounted for at least 50% of their sales. Most (60%) listed Amazon, with eBay a distant second. At the same time, eBay is increasing Final Value Fees (FVFs). Items that sell for under $25 are currently charged 5.25% of the closing value - this will be increased to 8.75%. The FVF for items that sell for between $25.01 - $1,000 are currently 5.25% of the initial $24, plus 3.25% of the remaining closing value balance; this will change to 8.75% and 3.5%, respectively. FVFs for Store Inventory listings will rise from 10% to 12% for items that sell for $25 and less. For items that sell for between $25 and $1,000, the fees will be 12.00% of the initial $25.00, plus 8.00% of the remaining closing value balance.
Auction-style format listings
Starting or reserve price
| Insertion fee
Free for 50 listings
$200.00 or more
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