Looking to compete more aggressively with Amazon for users who want to sell items at a fixed cost, eBay is changing its pricing model, lowering listing fees by up to 75% and increasing its final sales commission, BusinessWeek reports. The goal is to increase inventory of items listed at a "buy-it-now" price, increasingly popular with buyers weary of waiting for auctions to play out.
Listing items on Amazon is free, while eBay has made as much as 60% of its shopping revenue from upfront fees charged whether or not an item sells. The new system will mean 80% of its income will come from commissions. Amazon's fixed-price business has been surging, as eBay's has slumped. "From 2000 to the end of 2007, eBay kind of fought the trends—they tried to keep auctions the focus of the company," says one software executive. "And buyers voted with their wallets."