EBay Rolls Out 'Free' Auction Listings to Attract More Sellers

EBay (EBAY), the giant online auctioneer, said Tuesday it is eliminating "listing" fees for occasional sellers, as it tries to entice more users to its website in the face of stiff competition from arch rival Amazon (AMZN). Starting Mar. 30, sellers they will be able to list up to 100 items every month for free; eBay will take 9% of the final sale price, or $50, whichever is less. The company also said it would reduce listing fees for fixed price "Buy-It-Now" goods."Free-and practically free-is great news for anyone wanting to earn extra cash or build a business on eBay," said Lorrie Norrington, president of eBay Marketplaces. "Our new success-based pricing makes eBay more attractive and competitive than ever.

Occasional Sellers Are A Mainstay

EBay's move is a shift from its current practice, which allows occasional sellers to list up to five items for free every 30 days, and then takes 8.75% of the sale price or $20, whichever is less. Occasional sellers make up the majority of the 28 million people who hawk merchandise on the auction site, which claims to connect 90 million buyers and sellers.

The company said it was introducing the new pricing after a similar 2008 switch in Europe proved successful, and "has driven strong growth for sellers in markets such as the U.K. and Germany."

It remains to be seen whether the shift will attract the new users eBay envisions. And the company needs to be careful not to alienate its core "Power-Sellers," who move large amounts of merchandise on the site. Many have already expressed frustration with eBay's frequent policy changes.

Reaction Is Mixed

"Ebay continues to make it more and more difficult for sellers to list," one heavy eBay seller who didn't want his name published told me recently. "Just when you get used to one method, they change the steps you have to go through to list your items for sale or for bid."

Reaction on the AuctionBytes blog, a kind of watercooler for the online auction business, was mixed. "Congratulations eBay!" wrote one commenter. "You got this 12 year veteran and former shareholder down from 5,000 listings to 900 listings to 200 listings and soon ZERO listings. Sadly not because I sold these items but because you bastards ground me down."

Others were more positive. "As a large seller, I think I can work with this," wrote one commenter "I just hope the free auction listing fees don't fill the site up with useless cr@p."

Beat Wall Street Expectations

Last week, eBay beat Wall Street expectations with a solid earnings report, powered by growth in PayPal, its core marketplaces unit and the sale of 70% of Web-calling service Skype. The results are a nice boost for a company that has seen its market share erode in the face of strong performance by Amazon.

In a recent poll by Piper Jaffray, only 13% of people described eBay as "the best e-commerce shopping experience," down from 27% in March of 2009. By contrast, Amazon was named "the best" by some 65% of respondents, up from 35% over the same period.

In another study, MKM Partners found that "nearly 43% of all consumers who shop online select Amazon.com as their No. 1 preferred site, by far surpassing 'other miscellaneous sites' (27.5%) and EBay (only 10.3%)."
Read Full Story