Monday, June 06, 2005

Yahoo Auctions is now free

Yahoo Auctions is free as of today, no listing or closing fees.

Both Amazon and Yahoo should make their auctions free or near free. Auctions are not that much different than newspaper classifieds. As Craigslist has shown, the classified advertising market is ripe for disruption. Amazon and Yahoo have a similar opportunity in online auctions.

The only quibble I have with Yahoo's move is with eliminating the listing fee. I think you want the pricing structure to encourage sellers to list quality goods at reasonable prices. If the listing fee is zero, that might encourage people to list huge piles of crap at absurd prices. If the listing fee is small but not zero (and, perhaps, refunded if the item sells), it discourages sellers from listing items that won't sell.

[via TechDirt]

Update: About two years later, Yahoo gives up and shuts down Yahoo Auctions.

Unfortunate. I still think eBay could have been defeated, but just making the auctions free isn't enough. All that does is guarantee that the listings will be filled with crap.

I suspect a more successful strategy might have been closer to what I suggested in my post "Kill eBay, Vol. 1". Focus on dominating specific verticals like music or electronics. Make deals with liquidators to ensure that there always are good deals on the site.

See also my April 2006 post, "Early Amazon: Auctions".

7 comments:

brian said...

I think it will be irrelevant to eBay because dropping fees does nothing to help the buyers. In an auction format the buyer does not benefit from the lower costs to the seller as he is competing against another buyer not the seller.

Greg Linden said...

I'm not sure that's correct, Brian. Lower costs to the sellers have to be passed on to buyers eventually.

Let's take the scenario you mentioned. Let's say a seller lists on Yahoo for no fees and gets the same price as they got on eBay.

Sellers would be getting much higher profits in this case. They'd be selling on Yahoo and pocketing the money that would normally go to paying eBay's fees.

So, what happens next? Sellers go after the higher profits. They'd switch to Yahoo in droves. With so many more sellers and so many more options available to buyers, prices will have to fall. And, in the end, buyers will see lower prices.

The great thing about Craigslist disrupting classifieds or Yahoo disrupting the auctions market is that you and I benefit. We'll all see lower fees and lower prices.

Shane Hellenga said...

I have quite a problem with Yahoo Auctions. I know they SAY that there are no more listing fees, but I disagree. I just downloaded their Sellers Manager Tool and created an auction. When I went to submit that auction to Yahoo, a fee of $.75 (defined as a LISTING FEE) was added to my auction. I did not use any enhancements or anything else. I am a very experienced seller on E-Bay and I know how to get around fees. Yahoo is full of it in my book. They are wrong and they refuse to supply me with any way of viewing their current fee structure.

Anonymous said...

I too am new to Yahoo auctions and just download the Yahoo Sellers Manager and upload 15 auctions with 0 fees. So I am a happy seller, now I just need to make some $$$$

Dave said...

I am new to Yahoo but experienced with eBay and all I can say is that Yahoo's system is crap, complicted, disjointed and above all does not work. I am in an endless loop of downloading software that requires a restart, registering and verifying who I am only for their crap software to shut down for no explainable reason. The fat cats at ebay can sleep sound at night knowing full well Yahoo pose little or no threat with their amateurish attempt at online auction trading. Yahoo auctions is the pits for me!

Powerbider said...

There are a number of other excellent online auctions that offer excellent business opportunities for the online entrepreneur and have much lower selling costs and may be a good alternative if your selling popular and trendy items. As eBay continues to raise its prices this will open opportunities for some other fine auction site to grow and prosper as online seller check them out more seriously. Some of these site are specialized or localized and can offer and effective and economical alternative, but most have been growing in the shadows of eBay. With continued price increases from eBay we may in fact see the segmentation of the online auctions market and if that happens some day we may blog about how eBay became a victim of its own success.

Anonymous said...

This seems like an over reaction from Yahoo!. I think your right Greg the volume of seller does benefit the buyers and the zero entree fee will draw in some garbage peddlers at the detriment of Yahoo. But maybe this price increase at eBay is designed to get rid of the garbage peddlers and reduce the number of buyers at eBay and Yahoo is just opening the door wider for them. One thing is for certain eBay does understand the game better than anyone and If eBay decides to change the game, everyone take notice even we at MightyBids keep our ear to the ground for the changes in the industry as we look for ways to increase the value of our auction for our customers as I'm sure all online auction operators are.