AE Monthly

Articles - September - 2008 Issue

eBay Slashes Fixed Price Listing Fees...<i>But Why?</i>

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As for the future of auctions, Ms. Norrington offers a comment that could make auction sellers a bit squeamish: "Auctions will always have a place on eBay – they are a proven way for sellers to get the best value for their unique items, and they continue to receive significant exposure in search as they are sorted primarily based on time ending soonest." That "always have a place on eBay" sounds like auctions have been supplanted by fixed price sales as number one in their hearts. It reminds me of the guy who, dumping his girlfriend, assures her she will always have a place in his heart. Sure, but nowhere near as large a place as the new girlfriend. The "best value for unique items" implies that for other items, auctions are no longer the best value. The rare and collectible may still be suitable for auction, but for everything else, eBay seems to be saying fixed price is the way to go.

In related news, Amazon took a shot at one of eBay's core businesses, PayPal, by launching its own electronic checkout service, Checkout by Amazon. As with PayPal, this will also be available for use by merchants other than Amazon. This would put them into competition with Google as well, which not long ago initiated its Google Checkout. Then, of course, there was Amazon's recent purchase of AbeBooks. We do not know whether this transaction played a roll in eBay's decision to increase its emphasis on fixed price sales by independent sellers, but this is precisely what Abe does in the used book field.

While eBay has not solicited our advice, we would issue a note of caution to them. The grass may, at the moment, look greener in Seattle, but eBay is not a fixed price retailer. It is the one, and effectively only, online auction. It is a powerhouse that totally dominates its field. As a fixed price retailer, it is one of many, and it would have to throw out the winning formula that made it successful - listing other sellers' inventories while stocking none of its own - to be able to compete in the fixed price market on an even plain with Amazon and others. Ebay is the online bazaar, not the established online department store. If it gives up its soul to become Amazon II, it will instead become nothing. It will also open the door a crack for someone else to become eBay.

That is not to say it should abandon efforts to expand fixed price sales. There is opportunity for growth for eBay within this field. I have made fixed price purchases from eBay, but not because I went there looking for that type of pricing. It is the auctions, and the possibility of unique bargains, that sucked me in, where searches also found fixed price listings of interest. Auctions are eBay's unique draw. Without them, it would be just another retail seller, and one that does not provide the aura of security that comes with buying from the brand name retailer itself. Ebay should never forget who "brung them to the dance."

AE Monthly


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