Web auctioneer eBay will debut an instant-buying service that may lead the popular bidding site to compete with traditional online marketers.
The parallel on-demand market will be dubbed eBay Express and will launch this spring, according to a memo from Bill Cobb, president of eBay North America to eBay users. An online shopping cart will allow users to choose multiple items and pay for them in a single transaction, similar to carts at Amazon.com and other Internet markets.
The FAQ for eBay Express says that the service should “encourage more shopping among our existing buyers, who today may only buy on eBay for certain purposes or types of products” and should also attract “new buyers to eBay who prefer amore conventional e-commerce shopping experience.”
EBay Express will not allow price bidding, although sellers will be able to list items both for auction on the traditional eBay channel and for a set-price sale on eBay Express. Currently eBay offers a “Buy It Now” feature in its auction marts that allows customers to pay the price set by the seller for an item. But the feature is short-circuited if bidders place bids below the set price.
EBay listings that will qualify for the new site will be cross-promoted on both eBay and eBay Express. Sellers on eBay Express will be required to have at least 98% positive ratings and an eBay customer “feedback score” of 100 or more. They will also have to accept payments through PayPal, an online payment processing service that eBay bought in 2002.
The new launch will be marketed on eBay.com and through search marketing first, and later in 2006 through television, radio and print ads.
At the same time that it announced eBay Express, the company also revealed that earnings rose 36% in 4Q 2005. Sales during the quarter were $1.33 billion, up 42% from $935.8 million in the same quarter of 2004. Earnings for the quarter were $279.2 million, a 36% increase over $204.5 million in Q4 2004. Confirmed registered users of eBay rose 33% during the year to 180.6 million, from 135.5 million at the end of 2004.
“Q4 capped off a remarkable year for eBay,” said president and CEO Meg Whitman in a statement. “We saw accelerating growth and momentum across the board, a testament to the fact that eBay has built the most outstanding portfolio of businesses on the Internet.
Analysts attributed much of the 2005 net revenue increase to growth in eBay’s core U.S. and German markets and to higher-than-expected profits from recent comparison shopping engine Shopping.com and Internet voice provider Skype, two companies eBay acquired in 2005.
The company also said it will institute an increase in fees to U.S. merchants listing items on eBay.com. Sellers of goods between $25 and $975 will now pay transaction fees of 3%, up from 2.75%.
