|Wed Apr 30 2014 20:56:07|
Is eBay Killing Online Auctions?
By: Ina Steiner
eBay is changing its fee structure to force lower-volume sellers to list in the auction format in collectibles and other popular categories such as Clothing, Shoes & Accessories. The reason is clear if you were listening to eBay CEO John Donahoe and CFO Bob Swan's talk with Wall Street analysts on Tuesday: auctions were down 9% in the first quarter.
But will manipulating fees help fix a part of the business that eBay has left adrift while it pumped up listings from large brands and retail chains in fixed-price format, striving for a "retail-like" shopping experience?
You can read the details of the fee changes in Thursday's EcommerceBytes Newsflash. The bottom line - non-Store subscribers will no longer get 50 free fixed-price listings in Collectibles, Pottery & Glass, Sports Memorabilia, Clothing, Shoes & Accessories and 10 other popular categories. But they will be able to list up to 100 auction listings and pay no insertion fees. (There's more to it, be sure and read the details.)
At this point, it feels like it's too little, too late for the auction business. eBay auctions have been flat for a number of quarters - and, believe it or not, that's what Donahoe told analyst he would strive for - zero growth - during Tuesday's call.
But sellers take a big risk listing in the auction format. If eBay can't drive enough interest to those listings, sellers end up with an ending price far lower than the value of the item.
In the old days of eBay, many sellers found success listing collectibles for 99 cents to draw bidders in, but these days, many sellers are reluctant to list with a low starting bid. Upon reading eBay's announcement on Wednesday, some sellers have already said they would switch from fixed price to auction format to continue to get free listings in those categories, but set a high starting bid.
eBay isn't doing anything to change the inventory listed in auction format or to drive bidders to auctions - it's a superficial change.
Here's what Donahoe told analysts:
"We saw auctions come in less than we had hoped. Auctions were down 9% for the quarter. And there are little things that impacted that, we made some pricing changes to C2C (consumer to consumer) last year, we made a little bit of search changes, and so we're making adjustments to make sure that we allow consumers - buyers and sellers - to choose the format they want - 'cause we truly are indifferent because we monetize the same way. But also to ensure we're having the best balance in our marketplace.
"And so the U.S. team is on top of that, and again Top Rated Sellers are growing faster than ecommerce, fixed price is growing faster than ecommerce and we're putting a little more focus on the C2C and auctions business to make sure it's getting closer back to kind of, you know, zero growth rates."
Former eBay CEO Meg Whitman was fond of talking about "levers" she could use to adjust the Marketplaces business, and fee changes were a big part of that. This latest fee change feels clunky and awkward, and while it might increase the number of auction listings on the site, I don't expect it to revive auctions in a positive, meaningful way.