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Ebay to Emphasize Fixed-Price Sales Format

Sep 1, 2008

Acknowledging that most online shoppers cannot be bothered with auctions, eBay plans Wednesday to announce changes to its fee structure that emphasize fixed prices over bidding. The move is intended to help eBay compete more effectively with Amazon .com and other big online retailers.

The announcement, timed to increase sales during the holiday shopping season, is just one of the changes eBay has made in the last few months aimed at reducing its dependence on its auction business. It provides yet more evidence that consumers are losing interest in auctions now that online shopping sites have become more affordable and easier to use. "Buying online has changed," said Scot Wingo, chief executive of the market research firm ChannelAdvisor. "Retail sites no longer make customers choose between convenience and price." Lower upfront fees will enable sellers to offer a bigger selection, helping eBay better compete with fixed-price retailers, Mr. Wingo said.

Among the changes being announced Wednesday is a new pricing plan for sellers who offer fixed-price items in eBay's "Buy It Now" format. Starting in mid-September, sellers will pay only 35 cents to list an item for 30 days, a reduction of about 70 percent in upfront fees. EBay also announced that it would no longer allow most customers to pay by check or cash, a change aimed at curbing fraud. Users will need to pay with a credit card or through eBay's PayPal online payment service.

Yet even as it shifts away from the model that made it unique in the first place, the company insists the auction model is still viable, and that it intends to offer sellers and buyers a choice of formats. Auctions are often a better approach for sellers when items are in high demand, the company says, or when the seller is uncertain of an item's value.

Information in this article was edited from a story in The New York Times.

Topic: Wholesale News

Related Articles: eBay 

Article ID: 725

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