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eBay vs Amazon.com: eBay Price-Structure Overhaul Coming Today
Auction giant to incorporate Amazon-like fixed pricing from now on
Aug. 20, 2008 08:00 AM
Lorrie Norrington, president of eBay's global marketplaces business, has been telling BusinessWeek about a sea change in eBay's pricing structure. Calling it "the biggest, most fundamental change we have made," Norrington has told BW that eBay will today announce plans to reduce the upfront fees it charges to list sale items - source of up to 60% of its revenues till now - while increasing its final sales commission to make up for the reductions, which in some cases will be by as much as 75%.
"EBay's move to court more fixed-price sellers is likely to be just as controversial as its prior changes. Auction sellers have argued that eBay is favoring fixed-price goods to their detriment, neglecting the business that made eBay the e-commerce giant it is today. EBay executives have countered, saying that eBay will always have auctions, though it has to give buyers the ability to shop the way they want. Increasingly, that means giving them the convenience of buying something for a set price — that is, ideally, priced-to-sell. "The vocal minority is going to be exceedingly vocal about this," Wingo says. "I think it is a great step…and for the fixed-price sellers it is a big step."
"The novelty of online auctions has waned and rivals like Amazon have muscled in on its turf with strong fixed-price offerings."
eBay will announce the full details of its new fee structure later today, said Norrington.
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