eBay’s New Fees: A Win for Micro Sellers

eBay is lowering fees for smaller sellers, hoping to capture marketshare in commissions from Amazon. eBay has removed listing fees for the first 50 products listed each month. http://pages.ebay.com/help/sell/fees.html#if_auction What they could really benefit from is a redefined position in front of potential customers. If eBay can attract high-quality customers and help sellers turn a decent profit, sellers will continue to list products there no matter what Amazon does with its fees.

From a customer experience standpoint, the biggest difference between Amazon and eBay is still that customers tend to see Amazon as a place to SHOP for NEW items. Amazon’s listing structure is focused on providing a great experience for shoppers. First, they enhanced their product pages with tons of valuable information in the form of high quality product copy and customer reviews. Then, they put a lot of (painful) effort into getting as many listings as possible onto a single product page, which prompted sellers to price more competitively. Finally, they got aggressive against unprofessional sellers that shipped late or inaccurately described their products. These efforts combined to provide a better shopping experience that attracted more shoppers, which in turn, attracted more sellers. Amazon’s strategy is very effective for selling items that are brand new or that, like books, tend to retain most of their resell value after being gently used over time.

eBay’s place in the online market has changed. For years, eBay was THE exciting place to find new merchandise, but then Amazon’s new and improved customer experience strategy won over shoppers. eBay used to have a decent customer base of auction gamblers who loved the excitement of bidding and winning all sort of items. Since then, certain auction sites like UBid struck gold by charging bidding fees to gamblers looking for penny auctions. With Etsy taking over the handmade and bespoke audience, eBay’s vast sea of customers is rapidly shrinking. Where eBay really has the potential to outperform Amazon is in curating rare and collectible items. Amazon’s listing structure is less than ideal for this type of merchandise, and eBay, by developing a strategy around one of its own strong points, could capitalize here.

Even if eBay doesn’t target its marketplace at a specific kind of shopper, marketplace sellers can. For sellers, knowing what to sell is important, but the most profitable sellers pay attention to which items bring in the most profit across several different platforms and develop a listing strategy around multichannel profitability. If you’re interested in learning how data-driven merchandising can improve your bottom line, register for SCOE2013 and meet up with Kat Simpson for a one-on-one conversation.