Today a landmark change in listing fees for fixed price format "Buy it Now" items on the original auction Internet site eBay was announced.
Starting September 17th eBay will charge 35 cents to list any number of the same types of fixed-price items each fixed price item listing will now run for 30 days just as store listings and continue to be included in core search.
UPDATE: eBay special web page explaining changes here: eBay
Is this move an indicator of the death of auctions on eBay?
Lorrie Norrington, eBay's president of global marketplaces says no, but ....
The fixed price listing fee reduction was not the only announcement worth mentioning from eBay today...
"A revamped search engine, which is now being tested and will be introduced in September, will give buyers looking for a specific item options to buy at a fixed price or via auction" (Source: Reuters).
With this additional announcement, eBay is ringing the bell that tolls a change in the way consumers will search the site. This new or revamped search engine (can you say Best Match on steroids?) will offer fixed price listings side by side with auction listings (tests leaked on this system last February). Will this new search "disadvantage" auctions so much that they become irrelevant and eventually through market pressure simply cease to exist?
This seems to indicate a fatal blow for auctions on eBay.
This change may not be a bad thing for new inventory sellers.
What about eBay Auction Consignment?
For our eBay consignment store readers, these announcements signal a serious change on the horizon.
Actually if your business model still offers consignment services, selling on eBay, you are already aware of the serious problems with the auction format. This recent eBay announcement is just the final nail in the coffin for eBay drop off stores offering consignment.
The time has come for trading assistant or drop off stores to abandon the consignment model. If selling on eBay is part of your business model I would suggest looking at offering outright purchase of goods that come through your retail door. Only investing in merchandise you know will sell at a fixed price you can make a profit on. In essence drop store operations need to look at the pawn shop model and scavenge bits and pieces to suit Internet sales of used merchandise.
Auctions may be suitable for items with little or no cost for acquisition but fixed price is where merchandise will move on eBay now and in the future. Until the numbers at other auction venues come up to a decent sell through rate, fixed price on eBay will be the best game in town.
eBay has become the venue for mass inventory and fixed price listings. The previous management tried to stick with the roots of eBay and hold on to the auction format but it seems the new regime holds no such nostalgia for Pierre Omidiyar's vision of a selling and buying venue using the auction format. eBay will never be what it was, the future has come to eBay. Time to join in the new fixed price revolution or go elsewhere.
Personally, I saw this coming some time ago and have abandoned all consignment "Trading Assistant" operations in my business (except for long time customers) late last year. The margins were just too small and the work load too high for me to justify the offering of consignment to new customers. Listing bulk inventory that moves is the future of ecommerce.
Change is not always a bad thing, eBay must make changes because what they are doing now is not working. They know it and we know it... I commend eBay for being bold enough to try and stimulate sales by lowering fixed price listing fees by what some say is nearly 70% (Of course we have yet to hear how much the final value fee will be raised to accommodate this new strategy). Auctions simply do not hold the mass consumer attention as they once did.
Eventually eBay may look at spinning off the auction marketplace to a new site or even selling it outright, which may have been a good move about a year ago when the value seemed limitless. Now that they have damaged the reputation of the auction format beyond repair and it might be difficult to find a buyer. It seems the plan is to slowly let auctions die on eBay and morph into a new Amazon like persona.
I guess we now know what "it" is....