eBay is considering lowering fees for sellers
Let me repeat that…
eBay is considering lowering fees for sellers!
The “market” is wondering if this would be a good idea? I don’t think any serious eBay sellers would question the wisdom of such a plan.
In fact with the increase in revenue for PayPal primarily from eBay transactions, I personally would recommend that eBay make it’s auction and Stores services…
The exponential growth of PayPal has proven that eBay is simply a feeder system for the money machine known as PayPal. PayPal would not be the cash cow it is today if eBay did not exist, eBay may not exist if it continues to increase fees and limit the ability of sellers, both new and experienced, to make sales. Sales are what drives the engine of the cash flow which feeds PayPal!
Imagine – if you will… a system of eBay where fees were completely removed (Somewhat like CraigsList or Kiiji). This would be a free market system like no other and the exponential growth of the PayPal transactions would more than cover the losses from removing fees for sellers.
The competition (Amazon/Google Checkout) would no longer be a threat to eBay/PayPal because eBay has the advantage in worldwide numbers. That advantage is dwindling only due to the fee changes over the last several years. If eBay were to remove fees for listing and re-listing and continue to insist on the use of PayPal for transactions then I say eBay would have a complete stranglehold on the Internet marketplace for years to come.
So, if the market is afraid of eBay reducing fees, what do you think they would say about removing fees altogether?
I doubt eBay will listen to us… But it would be a rather fine idea if they did, right?
Possible EBAY Fee Change Scares Wall Street, Analysts
December 10, 2007 9:39 AM|
eBay is reportedly evaluating new fee changes that could meaningfully affect the company’s financial performance and user experience.
At eBay Strategies, Scot Wingo relays recent comments made by eBay CFO Bob Swan and President of Marketplaces John Donahoe suggesting that eBay may radically lower listing fees (presumably in an attempt to entice sellers to stick around instead of absconding for Amazon, et al). That eBay is focused on competition, financial performance, and the “buyer experience” is good news. The bad news, as Wingo suggests, is that the possible fee change may not help any of the above.
Reducing listing fees, Wingo intelligently points out, will increase listings. Unless the site’s “Finding” experience is radically improved, however, this will result in more clutter and fewer clickthroughs, as buyers struggle to find the listings that merit paying attention to…
Donahoe notes that the changes make sense in some categories and not others, which suggests that eBay is being careful here. But Donahoe’s comments also reveal that eBay has not yet tuned into the real problem with the buying experience–the one that has allowed Amazon to become the gold standard “start-page” for anyone trying to figure out what to buy (more on this here).
Wingo walks through several scenarios, noting that the key issue for eBay-the-company is whether the listing change causes Gross Merchandise Sales (the dollar value of stuff sold through eBay) rises or falls. Wingo doesn’t know the answer, and neither do we.
On Wall Street, an increase in uncertainty is expressed through an increase in the discount rate (and a corresponding drop in the value of the stock). So that’s one reason EBAY continues to get pounded even though Citi and other firms continue to bang the drum.