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Kai Ryssdal: The company that invented the online auction is rethinking its business model. EBay announced a new fee structure today. Never fear, you’ll still be able to bid on that deck of vintage playing cards, or whatever it is that you collect. But starting next month the company’s going to be emphasizing its fixed-price listings to help keep up with the competition. Marketplace’s Dan Grech has more on whether users might buy into the changes.
Dan Grech: Sellers used to pay up to 57 cents a day to list a fixed-price product on eBay. Next month, they’ll pay just a penny. EBay hopes lower fees will attract more sellers — and buyers. That will help it compete with online giants like Amazon. But the shift to fixed prices moves eBay away from its signature auctions. Online marketing consultant Kevin Heisler says the company has no choice.
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.
He says mom-and-pop sellers often prefer 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.
EBay pioneered the online marketplace. Its site gave smaller vendors access to the World Wide Web. Now those vendors are eBay’s competition. Nia Hartman in Rossmoor, California, says she doesn’t bother with auctions. Instead, she uses eBay as a referral service.
Nia Hartman: EBay was good for looking for a variety of things, like a tuba mouthpiece or a wireless card for my computer. And I’d be able to see a whole bunch of different vendors and manufacturers. And then I would go to their sites.
Even with the lower listing fees, eBay still doesn’t match its biggest competitor: Amazon lets sellers list items for free.
I’m Dan Grech for Marketplace.
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