EBay unveils lower fees and tighter seller standards
EBay unveiled changes to its
online marketplace Tuesday that the company characterizes as sweeping and historic
and that are aimed at boosting sales by making the shopping experience simpler
and safer.
The changes, which include lowering some fees and raising merchant standards,
were announced at the company's eCommerce Forum by John Donahoe, who will succeed
Meg Whitman as president and CEO in March.
The changes, which will be implemented at different points in the coming weeks
and months, come at a time when eBay is struggling to boost growth of transaction
volume and revenue amidst increased competition from the likes of Amazon.com,
which in recent years has attracted many merchants away from eBay.
Donahoe said last week during a conference call to discuss eBay's fourth-quarter
financials that the eBay marketplace business hasn't been growing as fast as
he would like and that changes would be coming to make the shopping experience
easier and safer.
EBay's fourth-quarter earnings and revenue exceeded Wall Street's expectations,
but its outlook for this year was considered generally disappointing. For example,
the conservative 2008 forecast, coupled with slowing growth in the marketplace
business, led Citigroup to downgrade the stock to "hold."
While eBay's marketplace "playbook" has served it well for the past
10 years, the e-commerce game has changed significantly so the company must
now try bold, new plays, Donahoe said during Tuesday's presentation, which was
webcast.
Specifically, buyers have much higher expectations about online shopping than
10 years ago, so eBay must adapt and make their experience on the marketplace
a better one, he told more than 200 of the company's largest merchants at the
Washington, D.C. event. Likewise, eBay has to do a better job of helping its
best merchants be more successful, he said.
"The Web has evolved around us, and what sellers and buyers have come
to expect has evolved right along with it. Today, buyers want a very high level
of value, selection and convenience. They want to shop on their own terms in
a safe, easy-to-use environment. Sellers want a platform that meets the reality
of doing business online today and that scales to their needs," Donahoe
said.
In short, eBay finds itself at a crossroads where it can't afford to make just
incremental changes if it wants to remain a leader and meet its customers' expectations,
said Donahoe, president of eBay Marketplaces. "We need to redo our playbook,
we need to redo it fast and we need to take bold actions," he said.
Donahoe announced that eBay will introduce an insertion fee reduction in the
U.S. Feb. 20 by cutting the cost of listing items by 25 percent to 50 percent.
By reducing the impact of items that
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