EcommerceBytes-NewsFlash, Number 1150 - November 14, 2005     1 of 5

eBay Eliminates Third-Party Developer Fees

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eBay has eliminated fees for members of its Developers Program, which helps third-party companies and individuals develop solutions for eBay buyers and sellers. eBay said free access will allow developers to create new solutions, explore new business models and expand on their current offerings. The news may be especially welcomed by those developers who feel eBay competes with them by offering sellers software tools like Selling Manager Pro ($15.99/month) and Blackthorne ($24.99/month).

Greg Isaacs, director of the eBay Developers Program, said that by eliminating the fees, "we hope to encourage new ideas and accelerate the growth of our developer and affiliate communities who are taking the eBay buying and selling experience to the next level."

The news will have a positive financial impact on many companies, including auction-management service providers. ChannelAdvisor CEO Scot Wingo said his company, including its German subsidiary AuktionMaster, pays eBay well over $50,000/month in API fees. He said eBay's announcement does not change the barrier of entry for becoming a company the size of ChannelAdvisor, given the millions of dollars it has invested in hardware and with large bandwidth fees. Wingo said he would invest the money he had been paying in eBay fees into R&D projects.

4D President Brendan Coveney said the elimination of eBay fees is very good news for eBay users. "Vendors were using it as an excuse for expensive fees, and the change may cause problems for some of the larger software companies." 4D markets a tool for eBay sellers called MarketBlast with a one-time $99 price tag. "The more competition, the better," he said.

Coveney predicts some of the companies who operated outside of eBay's Developers Program will now come into the fold. "These companies were innovative but couldn't afford to take the risk of joining the program" due to the fees.

Today's announcement could be seen as a preemptive strike against Google, which is rumored to be developing a service that would compete with eBay, since companies must vie for developer attention. eBay also reached out to its developers in June when it introduced an online forum for open-source developer collaboration called eBay Community Codebase, free to all third-party developers enrolled in the eBay and PayPal Developers Program. Community Codebase gives developers access to source code for various eBay and PayPal tools and sample applications, and allows them to collaborate on new projects and innovations.

Developers are also important to eBay's recently acquired Skype service. Integrating eBay and PayPal with Skype will certainly take some innovation on the part of developers, and eBay CEO Meg Whitman has spoken on the importance of Skype's "ecosystem of developers."

eBay said membership in its Developers Program will now include free use of the eBay's Application Programming Interface (API), free membership and certification, and the availability of live technical support for all members. (It had previously charged developers for customer support.)

Members will also be able to promote their application in the eBay Solutions Directory, a directory of third-party solutions (http://solutions.ebay.com). The eBay Developers Program has more than doubled over the past year, to 21,000 members and more than 1,600 member-developed applications.

Wingo said he believed the announcement was good for innovation, but is concerned that companies may launch services that are not reliable. "People underestimate what it takes to build auction management services, and it's hard for consumers to differentiate among the services." He hopes eBay will make vendors live up to standards, perhaps by conducting audits.

Update: eBay said it does still charge for live technical help. It's $75 per hour or $250 for 4 hours. Previously this was only available to commercial tier members and not to individual members. Now it is available to everyone.

http://www.developer.ebay.com


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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