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eBay Fires Customers
Last week eBay announced it will increase the fees it charges to those who sell items through its online stores. The new prices will raise fees by an average of 6 percent for the approximately 500,000 online store owners, eBay estimated. Some sellers are angry with the news, and are considering jumping ship to Amazon, Yahoo or shopping.com. But eBay is cool with this, because some experts say the move was done to "fire" its below-zero (BZ) sellers.
By raising the costs to operate stores, eBay hopes to push more listings back into the auction format, CEO Meg Whitman said in an interview. In addition, the move will eliminate many sellers who use the eBay online store platform as a "dumping ground" for hard-to-sell merchandise. Skip McGrath, author of "Titanium eBay: A Tactical Guide to Becoming a Millionaire PowerSeller," told CNNMoney.com that those types of sellers are "cluttering up the space and diluting the platform's effectiveness." eBay store inventory listings represent about 83 percent of the volume but generate just 9 percent of the gross sales volume, according to the company. So the move may streamline the platform, improve efficiency, and ultimately make the site better for its most growable and most valuable buyers and sellers.
What do you think? Is the move a good one for eBay, or will it alienate too many sellers?
IMO ebay shouldnt be looking to get rid of customers, they should be looking to find a way to make those customers profitable. because whoever dethrones ebay is going to be the person who figures out how to capture the market that ebay cant. and once they have that market, they'll be in a nice position to go after ebay's bread and butter.
I think this is the right move for eBay. This is a core principle of the 1to1 approach. By making this decision, eBay can dedicate more of its resources - be it technical, financial, or human resources - to the customers that are generating longer term value for them. If store owners want to jump ship, then eBAy should cheer them on if they're going to torpedo Amazon's margins as well.