New eBay Strategy Favors Big Sellers

Excerpted from “EBay Deal With Buy.com Angers Auction Site’s Sellers” (NYTimes.com):

Consumers appear to be tiring of online auctions, and rivals like Amazon.com are attracting more shoppers with fixed-price listings, while eBay has been struggling for growth. To shift toward that model, eBay has struck a deal with the Web retailer Buy.com that allows the company to sell millions of books, DVDs, electronics and other items on eBay without paying the full complement of eBay fees.

The recent change is one of several under eBay’s new chief, John Donahoe, that is stirring rancor among the faithful who depend on the site for their livelihood. The deal with Buy.com has added over five million fixed-price listings to eBay.com since the beginning of the year — for items from Xbox 360 video game consoles to Weber grills.

Since eBay’s search listings favor larger sellers who can add perks like free shipping, which improve their feedback ratings, Buy.com’s presence has hurt many smaller sellers that compete in those product categories.

EBay is signaling that its future lies with big, reliable sellers, not the mom and pop shops that are objecting so vociferously to the Buy.com deal, said Tim Boyd, an Internet analyst with American Technology Research. “It’s a tragic ending to what was once a warm and fuzzy Silicon Valley story,” he said.

EBay Deal With Buy.com Angers Auction Site’s Sellers – NYTimes.com.

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