Power to the Power Sellers

Ebay has made recent changes to its listing prices in an effort to grow their product inventory (listings).  The online auction giant has been noodling with the listing and transaction fees in search of the perfect balance between profits and inventory.  Amazon has been on a roll, and has put pressure on eBay for the hearts and wallets of small business e-tailers.  The recent listing friendly policy is in constrast to their hugely unpopular 2008 fee-hike. 

Traffic and listings have been slumping at eBay, and no doubt the rise of Amazon and the 2008 fee-policy are at the heart of the seller defections.  eBay has come to realize that taking the short cut towards profits to please Wall Street is a dangerous game.  They are now getting back on track.  Multiple item listing is going to greatly improve power sellers sales velocity, and the listing friendly policy will increase inventory.  Cross-town rival Craigslist provides a model example of how listing friendly policies lead to high for-sale inventory, and in turn page views and unique visitors.  Craigslist and eBay have very different business objectives and profit targets, so the comparision is not apples to apples.  Ebay can win by being more pay-per-action (transaction fees on successfully completed sales) driven, than PPC (listing fees).

Expect eBay to have a strong comeback if they stay true to this listing friendly policy and do not once again try and milk the listings fees too hard.  The argument for listing fees is that you keep weak sellers and crap from being listed.  The reality is that anyone who is going to take time and energy to post on eBay is most likely a serious seller looking to make a buck for their wares.  That's the whole point of eBay.

When eBay announced their fee hikes in 2008, it seemed like the wrong tactic.  Ebay has a strong hold of the auction market, and it seemed the 2008 fee policies would lead to a lot of grumbling, though not much attrition.  However, the negative impact of the 2008 fees were notable.  The powersellers were able to fight the fees and punish eBay for their unwelcome policy changes.  Congrats to the eBay community for winning the stare down, and good job to eBay for realizing their mistake and backing down the listing fees.