TechWag

Even though many Amazon sellers are whining that sales are down on the Amazon sellers’ site, the general trend for people to purchase things fixed price, which has been Amazon’s strength, is now being hotly pursued by eBay. This has both good and bad connotations; people who picked up things at flea markets will have a harder time selling things at a huge profit, because now they have to think of fixed pricing. The other is how this will distribute folks across the internet in terms of small retail folks who are competing heavily for a dwindling supply of dollars.

While high gas and high food prices are getting people to make tough choices about where their money goes, the more interesting part is that while the economy is slower, and dollars are fewer, the field should be narrowed a bit as sellers with no staying power attempt to move from auctions to fixed pricing. Those cannot do fixed pricing relying on the bidders running up the price will begin to move off eBay, and onto other auction sites, or start their own systems. The idea that fixed pricing is in the way to go is in the numbers.

Since taking the helm in March, eBay Chief Executive John Donahoe has made it clear that fixed-priced items are key to future growth. EBay’s “Buy It Now” business, where shoppers can purchase items at a set price even when the merchandise is also listed in an auction, makes up 42% of all goods sold on eBay. It’s growing at an annual 22% pace, the fastest among eBay’s shopping businesses. “As [Web] search has developed, you can get a great deal in a fixed-price format,” Donahoe said in an Apr. 16 interview after his first earnings call as eBay’s top executive. “We are going to let our buyers choose.” Donahoe did not comment for this story. Source: Business Week

The interesting part is not just the competition, but the smaller sellers who will also have to change their business model to accommodate fixed price. While this will dilute profit for those smaller sellers, in the longer run it is the buyer who makes out here as pricing competition to be the lowest becomes an issue. There are already complaints about “penny sellers” on Amazon, while systems like Alibris enforce a general minimum price of 1.99 per item, how small sellers move off to other platforms is also important. Not every other platform will help you sell those adobe PDF’s that you wrote, sites like Amazon and Alibris have a quality bar that some sellers will have a hard time meeting with their goods.

This is where it gets interesting, and where it gets difficult for smaller sellers who grew accustomed to the auction format, and will have to move to fixed pricing. Some will fail, some will win, and the sellers on the other platforms are always going to whine about the issues with people fleeing other systems, to sell on Amazon or otherwise.

Tags: amazon, alibris, ebay, sellers, auction, fixed, price, format, money, profit, loss

Tags: technology, business //