What Drives Me Nuts? The New eBay 30% Rule

Hi gang,

As a long time e-commerce seller, there are certain things going on in e-comm land that just leave me scratching my head.

Take, for instance, the new(er) rule on eBay that if you list an Auction with a Buy It Now (so the buyer can either bid on it or just buy the darn thing already), the Buy It Now must be 30% or more higher than the open bid.

Exqueeze me? Baking powder?

In the old days, we large sellers used to have a pretty common strategy of listing an item as an auction, but if a buyer wanted it right away, we would also put a Buy It Now on the auction that was slightly higher than the open bid.  I was a media seller, and so our model would be, for example, a 5 day auction with an $8.99 starting bid and a $9.99 buy it now for the people who wanted to just snag their copy of Pretty Baby.  Of course, eBay used to and still does charge an extra fee for using Buy It Now – I think it used to be .10, so us large sellers really took a bath offering Buy It Now, but we believed that the customer didn’t want to go through the bidding process to get their item.

Back then, eBay was something like 90% auction. The auction model made eBay a totally unique marketplace and a very successful one.

Today, however, the eBay model has completely flipped to 70% Fixed Price items. Gee, what a shock that people want their goods right away (rolls eyes).

So the new eBay 30% rule just baffles me, because it seems to encourage bidding behavior again vs. Buy It Now.

Why?

Let’s say you are selling a brand name coat and you want to give buyers either the option of bidding or Buy It Now.   Before the rule, you could start a bid at $33.99 and offer a Buy It Now of, say, $35.99.  The odds of a buyer taking the Buy It Now would be quite high because that was a very reasonable price to pay.

But now?  Now your open bid is $33.99 and your Buy It Now is….let’s see…carry the one…divide by the mass of the sun….$44.19?

Am I crazy or would a buyer not hit that Buy It Now? The price difference is so much that they’ll probably risk it and bid.  It encourages bidding.

It just doesn’t make sense. Here’s a company that has completely changed its’ business model to fixed price to compete with the Amazon‘s of the world, and yet they have introduced a rule that encourages bidding.

It’s a little confusing.

youdontsay

-Kevin

P.S. Come play with me at GodImSexy.com

 

 

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2 thoughts on “What Drives Me Nuts? The New eBay 30% Rule”

  1. You could also look at it the other way. It encourages the seller to set a lower starting price and a more reasonable buy it now price. Say a $35.99 buy it now with a opening price of $26.99

    1. Yep, very true. It’s a bit like eBay is a sheep herder and is trying to nudge all the seller-cattle in one direction, isn’t it?

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