It was reported that eBay was testing a new “automatic price reduction” function designed to help sellers increase their conversion rates through automatic price adjustment. The function allows sellers to set fixed price reductions, time intervals (3, 5, 7, 14 or 30 days) and minimum price caps to automatically lower the price of fixed-priced goods.
Similar to the “simple pricing” function introduced in 2018, the “automatic price reduction” function seeks to attract buyers through price adjustments, particularly for demurrage goods. However, “improvement pricing” is limited to new or inactive vendors and only eBay mobile end applications show a downward adjustment of 5 per cent every 5 days after 10 days until the lowest price is reached (e.g. $5.39). The new functionality is more flexible, allows for more vendor participation and provides for a wider choice of time intervals.
Some vendors at the eBay Community Forum indicated that there was a problem with the ” sticky” set-up of the function, which could be opened by default at a subsequent Listing or modification when it was enabled to create or modify a listing, resulting in the seller not being aware that the price was automatically reduced. For example, one of the sellers said: “When I change listing, the automatic price reduction function is always defaulted on, although I confirm that it was not voluntarily opened.” This ” sticky” setting may be derived from the default behaviour of eBay listing forms, increasing operational complexity and potential risk. Some sellers are concerned that this function exacerbates “price warfare” and that buyers may be used to waiting for price reductions to harm sellers’ profits. When the “simple pricing” function was introduced in 2018, vendors on Reddit had criticized similar mechanisms as encouraging buyers to “suspend” prices, even leading to repurchases at lower prices after the return.
eBay has provided a variety of pricing tools, such as “best bid”, promotional management and the preferential functions of the vendor centre, but the “automatic price reduction” function is more automated, without the need for the seller to send the premium manually, and the system automatically adjusts the price according to preset rules. It is also more flexible, with a fixed 5 per cent reduction and a five-day interval compared to the “simple pricing”, with the new functionality allowing for a self-defined price reduction and time interval. The functionality is not yet fully open and only some vendors (especially new or inactive) can see a simplified version, with a default price reduction of 7 days and suspected of being tested or phased in.
