eBay CEO: 'store inventory listings' fee increases to restore 'magic' of eBay

eBay CEO Meg Whitman addresses “growing imbalance

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eBay CEO Meg Whitman addressed a “growing imbalance” between core and store inventory listings at eBay, during the eBay Q2 2006 earnings conference call today, and announced “correcting” store inventory listings fee increases.

Whitman said:

While Q2 growth in our eBay business met our expectations, we want it to be stronger…growth for the quarter, primarily in the U.S., was most affected by the ongoing listings imbalance…

today sellers list two products in two primary ways. The first way is through our core traditional eBay auction format that also includes Buy It Now listings…

The second way is through store inventory listings, which gives our sellers the ability to list large amounts of products in their eBay store. This format features low insertion fees and appropriately higher final value fees to encourage an abundance of inventory on the site.

eBay's innovation in listing formats have been a critical part of our successes since 2000. Our varied formats entice a wide array of buyers, while giving sellers the flexibility they need to be successful. Over time, however, we have seen sellers shift their listings from core auction style to fixed-price store inventory format because of the lower insertion fees. Too many items in store inventory format -- rather than in core auction-based format -- have caused the buyer experience to suffer.

The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience. This has resulted in fewer return visits, higher exit rates and fewer bids per listing. In turn, conversion rates and successful listings have declined and eBay's GMV growth has not been as strong as we would like...

we are refocusing our marketing to drive buyer demand to traditional core listings…

Next, we are increasing exposure for core listings in eBay Express and will be advantaging all core listing formats over store inventory listings.

Finally, we are raising fees for store inventory listings to better align our pricing and enhance the value for sellers to list items in the core format. We are confident that these changes will rebalance our Marketplace and revitalize GMV growth rates. A balanced, healthy Marketplace provides the best buying experience for buyers, while maximizing cash flow for our sellers.

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