They're ripping out gavels and replacing them with cash registers.
Leading online marketplace eBay
The timing of the move is intentional. Charging sellers a flat $0.35 insertion fee on longer listings will stock eBay's virtual marketplace with a ton of fixed-priced goodies in time for the holidays, when shoppers need a little more certainty than the adrenaline-pumping fervor of its flagship auction format.
Priced to move, over
The new pricing also means that the traditional bidding wars will be harder to find on the site, robbing eBay of the excitement that it has invested so heavily to promote. Wasn't it just a few months ago that eBay's "shop victoriously" televised ads were promising that "it's better when you win"? Windorphins, anyone?
For better or worse, eBay will become more like a haggle-free flea market than a competitive bidding floor. In short, it's going to start looking a lot like mainstream online retailers like Amazon.com
eBay has cleaned up on that front in recent years, but it certainly doesn't help to have Tiffany
The reinvention revolution
It's never too late for eBay to reinvent itself. priceline.com
The key is mastering the delicate balance. If eBay becomes better known as a fixed-price haven than a place to bid on garage-sale Picassos, it will have a hard time distinguishing itself from sites like Amazon and Yahoo!
eBay has spent more than a decade establishing its identity. How many companies have the honor of being verbs? The last thing it would want is to open up the playing field for a niche auctioneer like Bidz.com
Perhaps the bigger potential pitfall in dropping its listing fees on fixed prices will be out-of-whack price tags. If listing costs just $0.35 for a month of visibility, how many people will put up items at ridiculously high prices? There may be the occasional great deals, but too many sellers will aim for the moon. That would kill eBay, wouldn't it? If strolling through the site's virtual categories becomes a fruitless exercise of skimming past overpriced junk -- because all of the good deals get snapped up quickly, while the rest collect cobwebs -- it will dent eBay's already roughed-up brand.
Yes, eBay has to do something. Consumer listings have been running stagnant on the site in recent quarters. However, just because something must be done, doesn't mean that just anything should be done.
I don't mind going out on a limb in predicting that eBay will regret this move. If I can ruffle through my pocket lint until I find $0.35 in spare change, I may very well pay to list that prediction on the eBay site for a month.
More items in the eBay playbook:
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Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 173 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.