eBay prices going, going...staying put

The online auction giant is expanding on its foray into fixed-price goods, allowing people to sell multiple items through short-duration ads.

4 min read
Online auction giant eBay is expanding on its popular foray into fixed-price goods.

By next month, eBay plans to introduce a fixed-price trading format that will allow people to sell multiple items through short-duration ads. Buyers will not be able to bid on the items like they can through ads that feature the company's "Buy It Now" format.

"Since we introduced Buy It Now for auction-style items, our community indicated a strong desire to buy and sell some items at a set price," eBay said in a note on its Web site.

eBay representatives did not return calls seeking comment on the new feature.

eBay has been gradually augmenting its fixed-price options over the last two years. The company bought fixed-price trading company Half.com in 2000. During the holiday season that year, eBay introduced its Buy It Now format, allowing customers to buy last-minute gifts on its site without waiting for auctions to close. Last year, the company launched its storefronts, allowing sellers to set up shop in a virtual eBay mall.

The fixed-price features have proved popular with buyers and sellers. During the first quarter, nearly one-fifth of the sales made through eBay's sites were conducted using set prices.

But the fixed-price features haven't come without problems.

Just last week, Northwest Airlines acknowledged that it was no longer providing discount tickets to Priceline.com. The airline company's move came in response to Priceline's decision to sell tickets at a fixed price on eBay. eBay and Priceline teamed up earlier this year to create a new travel site on eBay.

eBay also backed off a plan to roll Half.com into eBay.com and rename it eBay Express Buys. Meanwhile, a later attempt to integrate the two sites' feedback systems initially resulted in incorrect ratings and the inability of some Half.com users to leave comments for sellers.

Meanwhile, some sellers complained when eBay introduced fees on its Buy It Now feature earlier this year. The company now charges 5 cents for most items that use the feature--a cost that some sellers who offer low-value goods say is prohibitive.

Sellers can use the new fixed-price feature to run ads for three, five, seven or 10 days, the company said in a note on its Web site. eBay will charge the same listing and transaction fees for the set-price ads as it charges for its regular auction listings, but sellers will not have to pay an extra fee for the fixed-price option.

Sellers will be able to offer multiple items within one ad, and buyers will be able to specify the quantity they want. eBay plans to launch the new feature by the end of next month, the company said in its note to users.

When it introduces the new feature, eBay will also update its search system. On the search results page, the company will add a new tab for "auctions" to its current tabs that display "All Items" and "Buy It Now" listings. In addition, the company will add details to the search results that will indicate the bid price and the Buy It Now price for all listings.

"We believe that this functionality will be especially attractive to high-volume buyers and sellers seeking to transact online on a greater scale," Deutsche Bank analyst Jeetil Patel wrote in a research note. "As such, we believe that the new fixed-price format could draw in new users from both sides of the transaction, thus driving growth."

eBay is limiting the new feature to established sellers. Only sellers with a feedback rating of 10 or more will be able to use the feature to sell single items. To sell multiple items through one ad, sellers will have to have a feedback rating of 30 or greater.

The new feature differs slightly from eBay's current fixed-price options. The Buy It Now feature allows sellers to add a set price to a regular auction, through which a buyer can close an auction early and circumvent the bidding process. Unlike the new fixed-price feature, the Buy It Now feature can only be used on one item at a time. In addition, if a buyer bids on an auction with a Buy It Now button, the button goes away, and the listing won't close until the auction is scheduled to end.

Sellers can also list items at set prices for up to 120 days in a storefront on eBay Stores. But items listed in eBay Stores are separated from other eBay items; buyers won't find them by browsing or searching eBay's main site.

Sellers also have the option of listing items on Half.com, eBay's fixed-price trading site. Sellers can list items for an unlimited time for free on Half.com, but the site takes a much higher commission on sales than eBay typically does.