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eBay Launches Prostore Service

By Art Micklewraith
Auction giant eBay has been taking some body blows lately but seems to be counter punching now. Their revenue, while still growing, has slowed down. The auction site angered some customers when they raised their rates about six months ago. To make matters worse, earlier this year Yahoo Auctions eliminated many of its fees and Google apparently has plans to get into the payment provider business. These actions, no matter what Google executives say to the contrary, are attempts to get a piece of eBay's giant market share.

Industry observers have wondered what eBay would do to offset these moves and now they know. The auction site announced at its shareholders meeting that it is going to offer a new set of services intended to benefit its most active sellers. The new service is called Prostore and will help sellers to, among other things, set up their own e-commerce site. eBay says that over 100,000 of its mid-level customers don't have websites of their own and they hope to change that.

The service costs $6.95 per month with transaction fees ranging from half a percent to 1.5 percent of the sell. For many people this part of the service is worth the monthly fee alone. Anyone who has ever considered hiring a professional web designer knows that they are much more costly than $6.95 a month. Professional web design can cost thousands of dollars and often offers no long-term support.

The user will still have their old eBay store front but will link it to their unique site and be able to manage inventory and listing for both. The unique site will, of course lack the auction feature and will have to operate on fixed prices.

It will allow users to link their custom-built website to use PayPal. Being able to link Paypal directly to your business site will ease the headaches and expense of obtaining a payment provider or merchant account.

The service includes help with shipping. Sellers will be able to join together and participate in bulk shipping discounts previously unavailable to them. Obviously this is a tremendous boon to small resellers.

The company also recently released a software package called Websites Payment Pro that allows e-commerce sites to except payment by credit card without resorting to Paypal at all. It also has features that allow the user to customize their site and shopping cart. The software has a $20 monthly fee but would probably prove a worthwhile expense for businesses with sufficient volume to feel constrained by payment providers.

If everything works as promised, eBay is taking a big step towards being the friend and nurturer of small businesses they have always presented themselves as. Michael Dearing, an eBay vice president was quoted by CBS news as saying, "We are all about helping sellers succeed online, and we're building products and services to help them do that."

While it is encouraging that eBay is trying to reinvent itself as a sort of consultant for small business it could be said that this new effort will also keep eBay sellers from striking out on their own by creating another level of attachment to the auction site.