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eBay changing its fee model

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Bob Moon: When it comes to online auctions, most of us think "eBay." But there's word this morning the company synonymous with the online auction market is moving away from that model. Today, eBay is announcing a new fee structure that emphasizes fixed-price listings. In a move to attract more sellers, eBay will be slashing its fixed-price listing fee by almost 70 percent starting a month from now. Marketplace's Dan Grech has more.


Dan Grech: eBay hopes lower upfront fees will increase its selection of products. That will help it compete with other online sellers like Amazon. But it moves eBay away from its signature auctions.

Online marketing consultant Kevin Heisler says eBay has no choice. Many people seem to prefer the ease of an immediate sale over the anxiety of an auction.

Kevin Heisler: A lot of buyers have become disillusioned, I think, with the idea that they're really not getting a great value, because they can't count on winning an auction and they're not sure that the auction is always going to be fair.

Mom and pop sellers often like auctions, because people tend to overpay.

Heisler: When people buy at an auction, they have oftentimes that kind of auction fever where they'll pay more than what an item is worth. So there is that dimension that has given sellers much more revenue through the long haul.

The eBay auction isn't going away quite yet. Auctions still account for more than half of eBay's revenue.

I'm Dan Grech for Marketplace.

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