eBay Auctions vs Fixed Price

For most of us, eBay is a synonym of online thrilling auctions with last-minute bidding for that much coveted item. However, avid eBay users know that, right now, approx. 80% of the eBay sales are Fixed Price. When eBay was launched back in 1995, the Auction format accounted for 100% of its sales. Despite the fact that it is still perceived as an online auction marketplace where buyers can still bid for collectibles or rare items that can range from a pair of shoes to cars, the truth is that the Auction format has slowly become obsolete and its future seems bleak. And there are good reasons behind this steady decline.

The transition of eBay from the traditional auction-based system towards the fixed-price one was born out of the necessity to keep up with the tendencies marked by growing agencies such as Amazon, the continuous rise of FMCGs that offer lower prices, and the emergence of a new type of consumer willing to hunt for a better deal. The business model that eBay is currently promoting has at its core the buy-it-now feature, which ensures the immediacy of a purchase instead of having to wait for the auction to complete to receive the desired item.

And there is another crucial reason why fixed-price items are reconfiguring eBay's selling model: Google exposure. Since Google Shopping highlights only fixed price items, those sellers who are using eBay as a trampoline to sell their products are sure to benefit from the fixed-price system. At least as far as exposure is concerned.

Even when it comes to collectibles and rare items, most sellers prefer the fixed-price system over auctions because they can avoid selling their precious items for much less than their actual worth.

Technology advancements – such as mobile apps - have made bidding on eBay easier than ever, allowing customers to keep a real-time track of their bid and place a new one anytime, anywhere. However, that is not enough to change the dynamics of how people buy these days. Though online auctions still have a word to say, it is clear that the fixed-price model will prevail in the long run. In the end, it all comes down to adjusting the selling strategy not only to the demand-supply paradigm but also to the dynamics of the consumers' buying habits.

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