For eBay, Amazon-ification Takes Hold

The Amazon effect is getting deeper at eBay. The e-commerce giant that built its business around online auctions is stepping up an overhaul aimed at getting more users to sell items at fixed costs. On Aug. 20, eBay will announce plans to slash the upfront fees it charges to list sale items by as much as 75 percent, while increasing its final sales commission.

The goal is to manufacture it easier to list items for a set, “buy-it-now” price on eBay. That, in turn, would increase the stock of items for sale and — eBay hopes — attract more buyers seeking the Web’s limitless selection and the convenience of one-click shopping. “We think that that is the biggest, most fundamental change we have made,” says Lorrie Norrington, president of eBay’s global marketplaces business.

Lower Up-Front Fees

What the change will additionally do is produce eBay look a lot more like Amazon, whose emphasis on fixed-price

sales has surged in popularity as the more auction-oriented business on eBay declined. Amazon doesn’t charge sellers a cent to list items, and instead charges a commission on sales. eBay, on the other hand, has traditionally made as much as 60 percent of its shopping revenue from upfront fees — levied regardless of whether an item sells. The structure encouraged more sellers to list items for auctions, which at least guarantee a sale, than for fixed prices.

But eBay was slow to revamp its fees even as online shoppers shunned auctions in favor of fixed-price arrangements. “From 2000 to the end of 2007, eBay kind of fought the trends — they tried to keep auctions the focus of the company,” says Scot Wingo, CEO of e-commerce software company ChannelAdvisor, which advises thousands of eBay sellers. “And buyers voted with their wallets.”

Under the new fee structure, eBay will charge just…

Orginal post by Mike

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