Interview Question

Interview San Jose, CA

eBay reduces the commission from sellers. The Average

  Selling Price goes up. Why?
business case

Interview Answer

2 Answers


I guess because sellers can spend more time. Let's consider reducing commission in an auction - if a customer is supposed to pay $1 for 7 days instead of $2 for 7 days, she is more likely to spend more time i.e. 14days instead of just 7 days. And because she has more time available for auction, she would set minimum price to a higher value than before.

Anonymous on Feb 1, 2013

Commission for sellers means that the seller are more will to give discount to the buyers. Increase in ASP could be because people buy more expensive products because of the discount.

Anonymous on Nov 13, 2014

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