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SAN JOSE (Startupnation.com) – To enhance the recent fee changes that will force sellers to offer free shipping, eBay announced this morning that all sellers must offer their items for sale for free as well.
The new program will be called “FreeBay”, and will be effective as of April 10th.
“We have really been listening to the needs of the eBay buyer over the last several years,” said John Donahoe, eBay’s CEO, “and what we really feel that the buying public is saying to us loud and clear is that they need better customer service from our sellers, free shipping of goods, and product that is completely free as well. We believe that this move will be well received by the eBay buying community. Of course, buyers will still be able to pay for their free items with the convenience of PayPal.”
When asked how the seller community might react to such a move, Todd Lutwak, eBay VP of Selling Experience, replied, “we think this will be seen as a welcome opportunity for the eBay seller base. With FreeBay, sellers are now able to streamline their auction and fixed price strategies substantially. Sellers have been concerned in the past that frequent eBay fee changes have forced them to reevalutate their business models, and we think this change will end that concern for good. We are also happy to announce that eBay will not be adjusting fees for the rest of the year for this program, so they will be able to list their free items for as little as .05 with very low final value fees. We expect selection on the site to increase substantially”
There has been mixed reaction to FreeBay from the eBay seller community this morning. Jay Senese, a large seller of CD’s and DVD’s, is optimistic. “You know, with the declining eBay auction model that we’ve stuck with, we were pretty much giving the stuff away for free anyway,” he says. “This just makes the whole thing a lot easier”.
Jack Sheng, CEO of a large electronics accessories eBay seller, concurs. “We do well over a million dollars in sales a month on the site right now with a net profit after eBay listing, final value, and Paypal fees of about $25.00, so offering our items for free should really help increase our volume substantially”
Other sellers, however, seem concerned. “I’m not so sure about this,” says Kirk Holbert, a seller of toys and memorabilia. “Before I really buy in to the idea, I will have to make sure that all of my suppliers are on board with giving me the products to sell at no charge.”
The move also seems to enhance eBay’s recent acquisition of GSI Commerce. “Large retailers who have in the past been hesitant to offer their in season items for sale on eBay will now see the value of giving their items away on the site, ” Donahoe says. “Of course, all of their eBay fees will be waived anyway, so we don’t expect much of a bottom line impact on their costs. The GSI warehouses can hold a LOT of free goods.”
When Donahoe was asked if he thought that FreeBay may have a significant impact on the profits of eBay sellers, Donahoe replied, “I’m sorry, I don’t understand the question.”
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