eBay started out as a sort of online flea market, where anyone could sell the junk cluttering their attic and make a few bucks. The model made it easy to go beyond that too, and make a good secondary income–and for some, even a primary income. But its incredible growth has brought on big changes over the years, and the online auction house has lost its original aura of being a haven for small-time entrepreneurs.
According to a report in Tuesday’s Wall Street Journal, traditional eBay dealers who focus on auction sales are being pushed out of the market by larger retailers who sell fixed-price goods. The fact that eBay is de-focusing the auction to some extent was inevitable. It’s a simple matter of size: When it was smaller, there were fewer competitors and it was easier to sell that stuffed moose head you’ve had in your garage for the past ten years. But today, if someone wants to buy a stuffed moose head, chances are, there are dozens of others just like yours on sale at the same time, as well as a fixed-price vendor called “Moose Heads Boutique” selling imported heads at deep discounts. There is just a greater chance of being lost in the shuffle, and as a result, casual sellers lose out. Staying on eBay is serious business that requires constant vigilance.
ebay is shifting away from the garage sale model and more towards the secondary market, which is good for those retailers who are serious about obtaining wholesale goods and finding an outlet. Out-of-stock goods, overstocks, and wholesale lot purchases are fast becoming the stock and trade of successful eBay merchants. The auctions will still be there, but eBay’s main focus is going to be the fixed-price listings.
Last year’s eBay fee restructuring was the framework for the shift in focus–the percentage of sales collected increased, and the fee per item decreased, and listings for fixed-price items dropped way down, allowing merchants to pay a small flat fee to list multiples of each item. This fee structure naturally favors larger merchants who put large amounts of goods up for sale. One of the biggest complaints about eBay prior to the fee restructuring was that the individual listing fees could quickly kill a small business–if you weren’t selling just about everything you listed, those fees would drown you.
Can you still make money on ebay? Sure. But the days of trading in individual items at auction are coming to an end. If you have a hundred unique doo-dads and gizmos for sale you want to offer at auction, you’ll pay a fortune in listing fees, and maybe sell 15 or 20 of them when it’s all over. That’s not a good way to make money. But if you have a hundred of a single item that you want to offer at a fixed price, your listing fees will be minimal–so even if you only sell 15 or 20 on this basis, you’ll still come out ahead from a fee standpoint.
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