Strange Ebay Business Model

[Archive]

Posted By: boxingcardman

Based on the marketing analysis of its customers and its technical capaclties. Everything Ebay does to alter its product is carefully tested before it is made permanent. For example, they studied the outcomes and learned that listings with pictures do considerably better than those without (as they say whenever they offer a picture package special), so they decided that allowing a free picture per listing made Ebay more money than it was making charging for a picture.

I know these fixed price listing promos work; I've done very well selling from them. It is no great feat to figure out a price, either. You either work off your costs and mark them up with a return you like or, with services like VCP where you can readily determine the sales price for mainstream stuff, you price them to market. Combine that with the best offer option, which allows you to automatically weed out the nimrods trying to steal a deal, and you can control the outcome quite nicely yet still make the item attractively priced relative to the market.

Also remember that this two-week sales isn't a business model, it is a short term promotion. The other 50 weeks of the year sellers must deal with either the auction format or the fulll cost BIN format, and given the relatively small numberof BINs we normally see, thus far it appears that sellers in the collectibles category faced with full cost BIN listing fees are more likely to choose the cheaper auction format.

One last point: Although it means everything to us, collectibles are a tiny sliver of Ebay's business. I am pretty certain that the effect on tbe baseball card listings ranks rather low on the list of considerations when Ebay management kicks around the idea of a promotion. The vast majority of the items listed are consumer products that are readily priced through retailers. A fixed price model of selling works just fine with those and is already the accepted norm; you don't go into Best Buy expecting a $0.99 minimum bid on your new camera...

Sic Gorgiamus Allos Subjectatos Nunc