Sweeping Changes Mimic Amazon

eBay revises pricing, shipping and DSR requirements.

by Auctiva.com staff writer
- Aug 20, 2008

So much for the summer doldrums. eBay is unveiling dramatic changes sure to stir up controversy for seasons to come.

In one of several moves aimed at helping eBay achieve its retail-like aspirations, the online auction giant is reducing the upfront cost to list an item at a fixed price, and extending the duration from 7 days to 30 days—in effect making all Buy It Now listings equivalent to those listed as store inventory.

eBay hopes that lowering insertion fees will encourage sellers to put more fixed-price inventory on its site, in turn, boosting sales. Consequently, eBay says it will shut down its separate fixed-price-only site known as eBay Express.

"For sellers whose items may take longer to sell, this change will be a huge cost reduction and time saver," says Lorrie Norrington, president of eBay's Marketplaces division.

Further to its retail goal—which some have dubbed "Amazonification"—eBay is offering sellers free subtitles (a 50-cent value) when free shipping is offered on listings from October 1 through the end of the year.

And still another pricing change that mimics eBay's largest rival: eBay will place a cap on shipping and handling charges for media items, including books, DVDs and movies, music and video games. eBay did not provide specifics, but says the dollar limits are "fair," and will help eliminate excessive shipping charges. eBay gave no hint whether shipping caps will later be extended to other categories.

New fees

Starting Sept. 16, a flat insertion fee of 35 cents will apply for all fixed-price listings, except media items, which will cost 15 cents. Additionally, for media items using pre-filled item information, eBay is offering a 5-cent listing fee through the end of the year. Currently, fees are based on starting price and range from 25 cents to $4.

Auctions will always have a place on eBay—they are a proven way for sellers to get the best value for their unique items

eBay is also fulfilling an earlier promise to make its pricing more "success based," by hiking back-end fees to 12 percent for most categories. Meanwhile, categories deemed "extremely competitive"—including computers, cameras and electronics—will see a reduction in final value fees to between 6 percent and 8 percent.

Pricing for auction-style listings will not change, according to Norrington. "Auctions will always have a place on eBay—they are a proven way for sellers to get the best value for their unique items, and they continue to receive significant exposure in search as they are sorted primarily based on time ending soonest," she says.

Visibility in search

Along with pricing changes oriented toward increasing fixed-price listings, eBay is reformulating its search algorithm to more fairly sort Best Match listings, whether they are auction-style of fixed-price.

Auction listings will continue to be sorted by item relevance, detailed seller ratings (DSRs) and "time ending soonest." However, for fixed-price listings, total cost (price plus shipping) and recent sales history will carry more weight. In effect, for fixed-price listings with multiple items, the more items sold, the better the listing will be positioned in Best Match searches.

Seller standards

eBay is also getting tougher on sellers who don't meet minimum performance standards. Starting November 1, eBay will impose a minimum threshold of 4.3 across all four DSR categories, including item as described, communication, shipping time and shipping and handling charges.

eBay says this more stringent requirement will affect roughly 4 percent of sellers. Sellers will be evaluated on the past 30 days of DSRs, or over the last 12 months if fewer than 10 DSRs are received in the past 30 days.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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