eBay Encourages Sellers to Build Web Sites
SAN JOSE, Calif. — Eager to find new sources of income beyond its popular online auction format, eBay Inc. launched a new service Thursday that encourages small- and medium-sized sellers to build Web stores that operate independent of the e-commerce powerhouse.
EBay’s new ProStores service will allow sellers to design their own fixed-price e-commerce site with a unique Web address. The service, which costs $6.95 per month with fees ranging from .5 percent to 1.5 percent of transactions, will allow users to link their custom-built site to their eBay site and use PayPal, eBay’s popular online transaction service.
The move, which eBay announced at the start of its annual shareholder meeting here, comes as revenue growth slows in the company’s core auction format – particularly in the United States and Germany, where eBay’s market penetration is nearing saturation.
The San Jose-based company has been aggressive about expanding into emerging markets such as China and India, but it also has experimented with online classified advertisements, real estate and other new business ventures to try to maintain double-digit revenue increases in the lucrative e-commerce markets of North America and western Europe.
For several years, eBay employees have been charged with expanding the company beyond an online auction – including creating services that transform eBay into a sort of consulting service for small business owners looking to build their e-commerce presence, said Michael Dearing, eBay senior vice president and general merchandise manager.
About one in three of eBay’s largest sellers – such as those who sell entire lines of discontinued clothes from China and computer vendors who sell millions of dollars of equipment each month – operate their own e-commerce stores. But the hundreds of thousands of smaller sellers, who hawk everything from handmade sweaters to Pez dispensers, often don’t have sites other than their eBay store, Dearing said.
"We are all about helping sellers succeed online, and we’re building products and services to help them do that," Dearing said in a phone interview Thursday morning. "The marketplace will continue to be a foundation for a long time, but we know that sellers are interested in finding buyers all over the place and this can help them do that."
The new service comes about a half-year after the San Jose-based company enraged many small-scale sellers with a hefty price hike that threatened to dent their profits. In mid-January, eBay warned sellers in a terse e-mail that the monthly subscription fee for people who operate "Basic eBay Stores" would increase from $9.95 to $15.95, and the fee for a standard listing of 10 days would double, from 20 cents to 40 cents.
After sellers peppered executives with angry phone calls and e-mails for several weeks, executives relented with a conciliatory gesture that reduced some fees. In February, executives also promised to boost customer support services for small sellers in the United States and Canada, who have long complained that eBay had become unresponsive to their concerns and focused mainly on wooing million-dollar vendors, known as "PowerSellers."
EBay executives will host an annual shareholder meeting Thursday, where investors will vote on whether to double the number of authorized common shares to 3.58 billion and CEO Meg Whitman will deliver a speech about the company’s upcoming initiatives.
The company also will host an annual extravaganza for sellers dubbed eBay Live, which is expected to attract at least 10,000 users in San Jose throughout the weekend.
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