In the business with private households, Ebay is struggling with falling sales.
The online retailer is now testing a new model.
It's a revolution.
Kleinmachnow - The online trading platform Ebay is about to take a groundbreaking step in Germany: from Wednesday (March 1) all private sales will be free.
With the elimination of listing fees and sales commissions, the biggest hurdle that consumers have seen when selling via eBay.de has been eliminated, the company in Kleinmachnow near Berlin explained.
The regulation is unlimited in time, but limited to Germany.
After the USA and Great Britain, Germany is the third largest sales region in the world.
So far, sellers have had to cede around eleven percent of their proceeds to Ebay as a commission.
In addition, there is a setting fee of 35 euro cents.
However, the costs for commercial providers should not change.
Ebay: Private sellers are more active buyers
The managing director of Ebay Germany, Oliver Klinck, said that the elimination of fees for private sales is an investment by eBay Germany in the entire marketplace business: the incentive of private sales is driving the business of private sales, expanding the variety of offers on Ebay Germany and thus increase the attractiveness of the marketplace.
The cancellation of fees should also pay off for the platform itself.
“We see that private sellers are also much more active as buyers.
Those who sell on eBay also shop twice as much as shoppers.”
Klinck said the initiative also fits the current economic environment: "We live in a time when many families lack money in their wallets." A representative opinion poll commissioned by YouGov showed that because of the energy crisis, inflation and other adverse circumstances an average of 180 euros a month is what the families lack.
"Therefore there is a great need in Germany to generate additional income through private sales."
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Algorithms control credibility
The exemption from fees and commissions only applies to private sellers.
On the one hand, Ebay relies on the information provided by the seller himself. In addition, the platform also uses algorithms to check whether the self-disclosure is credible.
"If someone regularly sells 20 iPhones a day, then that is a very clear indication for us that this is not a private seller."
Klinck said the private sale was of great importance.
“Ebay has always been strong in private sales.
The first product we sold was a used laser pointer.
Private sellers were also very active on the platform before Corona.
There was another boost during the pandemic.” Private sales are now being boosted by the economic circumstances.
The bottom line is that commercial trade is significantly larger and accounts for around 80 percent of the business.
Around 20 percent is accounted for by private sales.
However, the Ebay management cannot be satisfied with the overall business development.
A week ago, the trading platform reported weak numbers for the past Christmas quarter.
Year-on-year revenue fell four percent to $2.5 billion.
Adjusted income from continuing operations fell 10 percent to $581 million.
Like other online platforms, the company has had to cooperate with the German tax office since the beginning of the year.
Anyone who makes sales of more than 2000 euros in a year or processes more than 30 transactions must be reported and may have to pay income tax.
Ebay: light years behind Amazon
In the long term, the balance sheet is even more sobering.
In the past 25 years, Ebay has fallen far behind the largest online retailer, Amazon, with which it was neck and neck in the early years of the dot-com boom.
For many years, Amazon gave up profits to fund rapid growth.
On Ebay, on the other hand, investors wanted to cash in earlier at the expense of growth.
Ebay had to separate from PayPal in 2015, long before the payment service had become widely accepted.
Amazon was able to build a stable second pillar with the AWS cloud business, while Ebay passed on divisions such as the video conferencing service Skype to Microsoft far too early in 2011.
In the summer of 2020, Ebay cashed in with the sale of its classifieds division, which in Germany includes the eBay classifieds and Mobile.de portals.
While Ebay and the Ebay classifieds portal operated by the Norwegian online marketplace Adevinta have so far hardly gotten in each other's way, this could quickly change with Ebay's free initiative.
Ebay: “Kleinwerbung.de” as a separate brand
For consumers, this is all still quite confusing at the moment.
The Ebay trading platform and the Ebay classifieds bargain portal are constantly being confused with one another.
However, that will change in the coming year.
By the year 2024, eBay classifieds will remove the eBay name and appear under the “Kleinwerbung.de” brand.
Those who type the new address into their browser no longer end up with an error message, but are instead redirected to the website www.ebay-kleinwerbung.de.
(dpa/utz)