eBay Fixated on Fixed Price as Revenues Decline

eBay Fixated on Fixed Price as Revenues Decline

I'll say one thing about the online tech-news site The Register - they aren't subtle, as in this headline published after eBay and Amazon released first quarter earnings this week: "Amazon shames eBay with 24 per cent profit bulge." eBay was not alone in seeing a sales decline, however - Overstock.com experienced an 8% decrease in sales in the first quarter.

The Register's post was a far cry from this Bloomberg article whose author was impressed with eBay's performance, starting off with, "EBay Inc., the most-visited U.S. e-commerce site, reported sales and profit that beat estimates, a sign that efforts to overhaul its auction and fixed-price retail site are working."

BusinessWeek was more matter-of-fact in its assessment: "When it comes to overall market share growth, one rival that Amazon continues to steal share from is eBay, analysts say. One highlight of the quarter was the growth in the number of products sold by other merchants who list their products on Amazon's site. Those sales represented 32% of overall Amazon revenues, up from 27% in the fourth quarter and 30% in the year-earlier quarter."

Bloomberg said Donahoe overhauled listing fees last year and encouraged sellers to offer more fixed-price items. Sell-fulfilling prophecy - as we reported yesterday, Fixed Price format grew 12% during Q1, while auction format declined 20 percent (the law of unintended consequences?). But despite the fact sales are down, Donahoe's not changing course: he told Bloomberg he expects fixed-price sales to account for as much as 70 percent of the site's sales within a few years.