EBay lowers sellers' fixed price fees

 

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Posted on 20 Aug 2008 at 16:40

Ebay has announced it will be cutting the fees it charges British sellers to sell its "Fixed Price" items. The company hailed the move as one of its boldest ever, as it looks to boost sales, lure new buyers and withstand competition.

Sellers' fees will decrease in most cases as eBay sets out to improve the balance between buyers and sellers, in the hope that it can halt the trend of losing customers to rivals such as Amazon.com.

"I'd say this is the most fundamental change we've made, ever, to the marketplace," said Lorrie Norrington, president of eBay marketplace operations. "It's a huge shift from where we've been."

Rather than charging sellers to list each item separately, eBay will charge 15p to list any number of the same type of item in the fixed-price format. A similar change is being made in Germany and the US.

The move will take effect on September 16, is a bid to reduce the clutter of similar items on eBay. Fro example, 100 pairs of white socks will now be sold as a group.

All "Buy It Now" items will also remain listed for 30 days instead of seven, with the option of automatic renewal. EBay says the move will help sellers avoid the time-consuming process of re-listing unsold items and lowering the risk of inventory going unsold.

Fixed price items make up 43 per cent of sales on eBay last quarter, and often attract new or impatient buyers who don't want to wait for a multi-day auction to close. EBay says fixed-price sales are popular because they bring in newer, more in-season goods, whether its plasma televisions or the latest video game.

EBay has been trying to attract more buyers as its main auction site has experienced slowing growth in recent years. The novelty of online auctions has waned and rivals like Amazon have muscled in on its turf with strong fixed-price offerings.

"Consumers are voting with their wallets and saying, 'Auctions aren't really the way I want to buy cosmetics,' or something like that," said Scot Wingo, chief executive of ChannelAdvisor, a sales consulting firm that advises online merchants who sell through eBay and other sites.

He called eBay's move a "relatively big change" to make before the holidays that also shows eBay's new management is willing to look beyond the traditional auction format.

Patti Freeman Evans, research director at Jupiter Research, said given the fast-growing nature of fixed-price sales, eBay's move is "very opportunistic, but also in line with what their customers are telling them they want."

Among the changes, eBay will revamp its search engine, which is now being tested and will be introduced in September. The new search will give buyers looking for a specific item options whether to buy at a fixed price or via auction.

EBay has also been taking steps to reward its best sellers and give new incentives to buyers, including coupons.

Fraud protections have been enhanced and upfront listing fees have been cut in favour of fees for successful sales. Sellers with high customer service ratings have won discounts and their goods featured more prominently than other sellers.

Author: Theo Salvador