By Eric Auchard
EBay Inc. on Wednesday said it planned to offer an instant-purchase
service to supplement its bid-and-wait online auctions, pitting the
company directly against conventional e-commerce retailers.
Bill Cobb, president of eBay North America, said in a memo to eBay
users on Wednesday that the new service -- to be called eBay Express
when launched this spring -- aims to broaden the range of products
shoppers can expect to buy on eBay.
EBay also disclosed changes to the fees it charges in the United
States for listing items on ebay.com, raising by 9 percent the
percentage transaction fee that it charges on the value of goods
between $25 and $975 in value. It said it would cut prices on
low-priced items and other seller features.
A year ago, broad changes in pricing for eBay auctions provoked a
rebellion among a vocal minority of sellers. But eBay officials
stressed that last year's increases were steeper and that
U.S. business growth had nonetheless accelerated.
Overall, the changes are likely to add to earnings, Chief Financial
Officer Rajiv Dutta told investors on a conference call following the
company's 2005 year-end financial report.
EBay spokesman Hani Durzy said that eBay now charges 5.25 percent of
the first $25 of the final sale price of an item; 2.75 percent of the
next incremental $975 of value, and 1.5 percent of the incremental
value above $1000 of the item. The middle tier of prices -- from $25
to $975 -- will now be charged transaction fees of 3 percent, up from
2.75 percent.
"It feels like we are hearing the same record again from last year,"
said David Edwards, an analyst with American Technology Research in
San Francisco, who rates eBay shares a "hold" in terms of their
investment potential.
SHOPPING BASKET
EBay Express will feature an online shopping cart that allows buyers
to select multiple items and pay for them all at once, as Amazon.com
Inc. shoppers are used to doing.
EBay already offers a "Buy It Now" feature that allows bidders to
short circuit the eBay auction process and pay a set price specified
by a seller. But the feature is designed to attract buyers and
disappears once bidders join an auction.
By contrast, Express will be a full-service shopping site that only
offers goods or services at fixed prices. Sellers will be able to list
items both for auction and for outright purchase, eBay said.
EBay Express is described as a "specialty site" that will be part of
the broader eBay marketplace, alongside its exiting eBay Stores and
"Fixed Price" listings.
EBay sellers with strong buyer ratings will qualify to sell their
items on both eBay Express and traditional ebay.com sites. Initially,
eBay Express will only be available to U.S. sellers, but plans are to
extend the service internationally.
EBay price increases initially apply only to
U.S. listings. International price changes will be announced later
this quarter, eBay executives said. EBay also said it was waiving all
final sale fees in its EachNet China business.
Last February, eBay compromised over the price increases by offering
price decreases under certain conditions.
Copyright 2006 Reuters Limited.
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Eric Auchard (reuters@telecom-digest.org)