eBay to change its fee structure?
At the recent UBS 35th Annual Global Media & Communications Conference,
eBay Marketplace President John Donahoe indicated a new pricing structure is on
the horizon in 2008. According to Donahoe, eBay has been running tests since
September this year, in the form of several promotions with reduced insertion
and gallery fees.
eBay generates income by charging a higher insertion fee currently, selling add-on
features, and charging a lower final value fee when the item’s sold — a format
to keep junks out of auction listings.
That’s not necessary with fixed price items, says Donahoe, as search functions
allow people to sift through listings by price. And fixed price listings continue
to be the format of choice for most business sales.
The new pricing structure for fixed price listings will more closely mimic the
current Store Inventory fee structure: lower insertion fees for a longer listing
duration, with a higher final value fee.
It’s a pricing structure that attracts sellers like crazy. Donahoe points out that
store inventory items account for a staggering 60% of all inventory worldwide!
Using the results of promotions so far, eBay intends to re-balance their fee
allocation to attract more sellers, but earn the same by charging more on the
back end.
“We’ll be testing what levels at front (insertion and gallery) will stimulate the
right kind of marketplace dynamics.”
It’s an exciting change, which we’ll probably hear more about early in 2008.
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Alley Insider
Tags: eBay, eBay Marketplace, eBay fee structure,
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