On Tuesday, eBay (NASDAQ:EBAY) got into the holiday spirit by charging its members just 10 cents to set up a new auction all day long. On any other day, eBay's insertion fees will run a user between $0.25 and $4.80. That's in addition to the final auction fees that may run as much as 5.25% on any successfully completed auctions.
Offering the bargain listings two days after Christmas has become an eBay tradition over the years. In fact, until just last year, community members bent on clearing out their unwanted holiday gifts and cobweb-collecting wares could count on free listings on Dec. 27.
Probably the biggest question leading up to Tuesday's dime listings was whether eBay would revert back to its freebie listings. That's because the company had a challenging start in 2005 before surprising investors with accelerated growth in its domestic auction business in the second half of the year. Maybe a throwback bone was in order.
Thankfully, eBay stuck to its new tradition by forcing listers to ante up a dime. Allowing gratis insertions made eBay a sea of noise for the next seven days, when ludicrous listings at insane asking prices filled up the site. Because bidders knew better than to take a chance on many of those outlandish auctions, eBay didn't profit at all from the experience, since there were no final auction value fees to collect. Yes, a dime isn't that much of a barrier, but it does seem to be having some effect. At least the listings seem to have more reasonable start prices this time around.
While others such as Amazon.com (NASDAQ:AMZN), Yahoo! (NASDAQ:YHOO), and Overstock.com (NASDAQ:OSTK) offer consumer auctions, it's not as though top dog eBay really needs to look over its shoulder. It's still where bidders go because it's where the sellers are. It's where sellers go because it's where the bidders are. And it's this perfect moat of circular logic that makes eBay such a powerful entity.
Maybe there was a brief moment in time -- around the middle of January this year -- when an eBay hike was not taken well by affected power sellers, but eBay weathered that storm in shipshape fashion.
It's probably not much of a surprise that eBay has been a market-thumping stock recommendation for Motley Fool Stock Advisor subscribers. Amazon has been another winning pick for the newsletter service. The jury is still out on Overstock, singled out last year in Rule Breakers. Then again, companies like Amazon and Overstock were picked because of their main course flagship retailing businesses, not the auctions side dish. That's something only eBay can serve up as a satisfying entree. Rivals have tried to compete on price, but you just can't nickel and dime your way to making a dent on eBay. On Tuesday, though, eBay members were certainly able to put their dimes to good use.
On the subject of sparing dimes, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com.
Longtime Fool contributor Rick Munarriz is a satisfied eBay user, and he's ready with a roll of dimes in his pocket. He does not own shares in any of the companies mentioned in this story. Rick is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance.
