The evolution of Ebay to a fixed price platform explained

[frankbmd]

We all know that the Ebay of today is quite different from the Ebay of 10-15 years ago. Auction volume has decreased dramatically and been replaced by the Ebay Store catering to both high volume sellers and high volume consignors in what is left of the auction format. I am attaching a link to a paper that tries to explain the reasons behind this evolution from an academic perspective. I found it interesting in that the data presented confirms my empirical observations. It is quite long, but worth a look. The link provided may not open the article, depending on your browser settings for pdf documents, but may download the article to your computer, where you can open it.

https://web.stanford.edu/~jdlevin/Papers/AFP.pdf

[Jayworld]

Frank:
Thanks for the link. Very enlightening article. I found it interesting that in the Alternate Hypothesis section, this sentence stood out to me: The first is
changes in the eBay platform that might have favored posted price listings. After reading the paper, it seemed to me (from the mathematical analysis of the writers) that even though fixed (or posted) prices were introduced in 2002 in eBay, the straight auction format was still going strong in 2003. I think a major factor in the change from 100% auction environment to now a less-than-50% auction environment was eBay's decision (over a period of time) to change its business model for better financial gain on their part, thus producing the current environment that favors large volume sellers (through perks and discounts in listing fees, number of listings, etc.).

Gone, I believe, are the days in which infrequent sellers (I would be part of that equation) used eBay as an "electronic garage sale" to sell items to a much larger demographic than a local backyard weekend sale. If I had extra stuff (baseball cards, vintage toys, comics, video games, books, etc.), I could post on ebay and realize some money, even after shipping costs, eBay seller fees, etc. Now, with very few exceptions, anything I've tried to sell on eBay (cards, game-used jerseys, etc.) have been at a loss when factoring in seller fees (item cost + shipping cost percentages), shipping costs (gone up quite a bit since when I first joined eBay in 1998), etc.

This is one reason I hardly ever sell on eBay anymore. I still buy on eBay from time to time, and still mostly favor the auction formats, but I guess that's because I'm old school. Of course, bargains can be had on many BIN items, especially when one price compares with other online "fixed price" venues such as amazon.com, sports collectible dealers, etc....

Thanks, Frank!

[ajjohnsonsoxfan]

Craigslist has replaced eBay as the local go to for selling "yard sale" type stuff

[pbspelly]

It's too bad, in my opinion, because eBay used to be great for setting a market price. I used to sell restored 1940s telephones (called Lucy phones, because one was used prominently in "I Love Lucy") on eBay. I'd always list them at .99 cents and see where the market took them. Some weeks they'd sell for $120, sometimes for $150, sometimes for $100. But I was always confident that the market would determine a relatively fair price. I actually wrote eBay a long letter urging them to encourage more of what I termed "eBay market pricing" by giving extra discounts for anyone listing an item at auction for .99 cents or less. Instead, they went the other direction, and encouraged people to list lots of items for set prices. I would now be hesitant to just list an item for .99 cents.

[Cozumeleno]

Originally Posted by pbspelly

I would now be hesitant to just list an item for .99 cents.

It's weird - it's been very much a mixed bag for me. I am not a major eBay seller by any means but will use it to move duplicates or other items I pick up as parts of collections if I don't sell them here.

I've listed items that have sat and sat with what I felt was a very fair selling price. If it sits too long, I will generally start it at $.99 just to get something for it. Sometimes I don't get what I wanted for it, but often it will encourage more bidders and either reach/exceed my initial asking price or it will come very close to it at a point where I would have gladly sold it to begin with.

[ullmandds]

I'm glad I could help keep you busy in retirement!!!!

[savedfrommyspokes]

Originally Posted by pbspelly

I actually wrote eBay a long letter urging them to encourage more of what I termed "eBay market pricing" by giving extra discounts for anyone listing an item at auction for .99 cents or less. Instead, they went the other direction, and encouraged people to list lots of items for set prices. I would now be hesitant to just list an item for .99 cents.

Ebay does encourage user's to use the auction format.....they now go as far as offering to credit back a seller's listing fees on any auction listing that sells. You only pay for the listing if it does NOT sell.

[frankbmd]

Don't the higher final value fees of today more than offset the benevolent credit of a listing fee?

[savedfrommyspokes]

I do not recall the previous FVF rates for sports cards sold on ebay, however, the 9% (or 7.2% FVF for TRS) in FVF currently being charged has been in place for 4+/- years (?).

With ebay now offering the listing fee credit for sold auctions listings and improved discounts on listing fees for store owners, this would be the first time that I can recall an instance where ebay offered a reduction in listing fees without an offsetting increase in fees elsewhere.

If I recall correctly, several years back the FVF rate was higher, but was reduced by approximately 2% when ebay began charging FVF on the s/h collected. For most this sellers, this change did not increase costs, however, the "free s/h" sellers obviously did benefit from this.