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eBay vs Amazon.com: eBay Price-Structure Overhaul Coming Today

Auction giant to incorporate Amazon-like fixed pricing from now on

Lorrie Norrington, president of eBay's global marketplaces business, has been telling BusinessWeek about a sea change in eBay's pricing structure. Calling it "the biggest, most fundamental change we have made," Norrington has told BW that eBay will today announce plans to reduce the upfront fees it charges to list sale items - source of up to 60% of its revenues till now - while increasing its final sales commission to make up for the reductions, which in some cases will be by as much as 75%.

The change, BusinessWeek notes, amounts to the "Amazon-ification" of eBay.

BW quotes Scot Wingo, CEO of e-commerce software company ChannelAdvisor, in its analysis of the news:

"EBay's move to court more fixed-price sellers is likely to be just as controversial as its prior changes. Auction sellers have argued that eBay is favoring fixed-price goods to their detriment, neglecting the business that made eBay the e-commerce giant it is today. EBay executives have countered, saying that eBay will always have auctions, though it has to give buyers the ability to shop the way they want. Increasingly, that means giving them the convenience of buying something for a set price — that is, ideally, priced-to-sell. "The vocal minority is going to be exceedingly vocal about this," Wingo says. "I think it is a great step…and for the fixed-price sellers it is a big step."


Reuters calls the eBay move "one of the company's boldest moves this year to boost merchandise for sale, lure new buyers and take on competitors," and notes:

"The novelty of online auctions has waned and rivals like Amazon have muscled in on its turf with strong fixed-price offerings."

eBay will announce the full details of its new fee structure later today, said Norrington.

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Most Recent Comments
jos 08/27/08 01:22:59 PM EDT

Looking forward to the pricing changes. The advantage for ebay has been an access to a global inventory, and the reduced pricing for listing should definitely help add to the inventory and the 3rd party providers like us (http://FindYourAuto.net) that build ajax-enabled mashups/search engines on top of ebay, that takes ebay search to the next level.

radixweb 08/21/08 05:18:45 AM EDT

Great Post...