Can Lowering Prices Be A Bad Thing?
EBay (Nasdaq: EBAY) might just be jeopardizing its long-standing role as Internet retail king. And all because they’re lowering prices.
As of September 16, sellers will be charged a flat rate of $0.35 to show an item on the eBay site versus the seven day maximum before. In addition, they’ll be able to list multiple quantities of the same item for just that one price.
According to some, the online venture has operated with the higher costs in order to weed out the lower quality items and customers from the more legitimate ones. Unfortunately for that line of thinking though, Amazon and similar competitors don’t require any such payments from their clientele.
eBay’s response will most likely result in at least an initial jump in prospective sellers and buyers alike. But that all depends on whether the site keeps their search engine updated. If they don’t, higher volume could just make it more confusing to navigate, therefore actually driving people away.
http://www.smartprofitsreport.com/archives/2008/ebay549.html
Wednesday, August 20, 2008 — by Jeannette Di Louie, Assistant Editor of Mt. Vernon Research
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