Can Dropping Fees Revitalize eBay?
from the time-to-reinvent dept
The real problem may simply be that eBay is too constrained by its own success. It's attempts at branching out with things like Skype and StumbleUpon certainly haven't done much to help eBay, as the eagerly prayed-for synergies turned out to not exist. eBay's own attempts at revitalizing its core business have been equally pointless. So, it seems like something of a desperation play to lower fees, but it's difficult to see it having much of an impact. Certainly, it will make eBay sellers happier, but the transaction fees aren't the barrier eBay is facing in staying relevant. In fact, eBay itself should know this. When Yahoo tried to compete with eBay, it's key selling point was lower transaction costs for sellers, and that didn't do much to attract users.
eBay finds itself in a tough position. If it changes anything in its core business too drastically, it risks alienating those who helped bring the company to its current position. But, not changing will continue the stagnation process and certainly make the hole it needs to dig itself out of that much deeper. In figuring out a new path, it may want to take a few lessons from Amazon, which has been successfully reinventing itself from the inside with its web services offerings, while still striving to keep its core userbase satisfied. Amazon recognized that it could expand into a non-competing business that leveraged its strengths. While some might say that's what eBay tried to do with Skype, that was an acquisition, rather than a ground up offering, and it's still never been clearly explained what synergies there are between the two. In contrast, Amazon's web services offering clearly builds on its experience managing large scale backend operations, as well as its ability to handle a massive number of transactions. eBay probably should be trying to become the "Kinkos" of the web -- a small business's ideal partner -- but has yet to figure out how to do so.
Update: As noted in the comments and elsewhere, this isn't so much a cut in rates as a change in rates. For many sellers, the fees will actually be higher.