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eBay on Wednesday announced that it has dropped seller fees in an attempt to save you some money and increase the number of listings on each page.

According to the company, sellers will now be levied a flat 35 cent listing fee and will base fees on the successful sale of items instead of the fact that you’re simply listing them. Of course, that drop in rates will only impact those trying the company’s Buy It Now feature.

Although I commend eBay for trying to increase the number of listings on the site and trying to make customers happier with the service, I see so many glaring problems with the company that I don’t even know where to start.

According to eBay’s second quarter numbers, profits are up to $460 million, but its stock price is down 26 percent. And in a protest of eBay’s ridiculous idea of charging more to increase profits and (hopefully) listings, the company witnessed a 13 percent decline in listings — a figure that is simply unacceptable for a site of this magnitude.

But it’s as if all that doesn’t matter. As I just noted, profits are up and things have been going relatively well for eBay when all things are considered. Let’s not forget that part of those profits can be attributed to other sectors in the company’s business like PayPal and Skype, and that as listings continue to decline, it can only enjoy a profit for so long.

Suffice it to say that eBay has lost its way and is only successful today because no other online auction site has been able to offer the kind of community and marketing eBay has.

eBay was originally created to be an auction site; nothing more, nothing less. But today, the site lets you buy products outright through its Buy It Now feature and has significantly reduced the number of real auctions on the site. A quick glance at the company’s main page will tell you everything you need to know about today’s eBay: it’s just as much a retail store as it is an auction site.

But that’s unacceptable. eBay is an auction site and the only reason it was ever successful in the first place. Why would it want to abandon its roots in favor of competition with Amazon and other online retailers? It doesn’t make sense.

eBay’s problems go far beyond retail. The company’s page hasn’t been updated in years and it’s still the same, ugly, Web 1.0 website that makes it too difficult to find anything in a reasonable amount of time.

And that’s why I think some companies could jump on the auction bandwagon and supplant eBay in that space. Right now, eBay has few competitors and none that can compete to the same magnitude. But that doesn’t mean that eBay is unbeatable. Quite the contrary, eBay is vulnerable.

All it will really take is a site that’s well-designed and has some strong financial backing with a focus on online auctions to knock eBay off its pedestal. eBay is too anti-customer and too focused on everything other than its auctions to truly stand up to a real online auction competitor. Granted, a slew of companies have tried and failed, but that doesn’t mean it’s impossible. In fact, I’m willing to bet that the majority of eBay users would be more than happy to move to an alternative if that meant getting away from eBay’s draconian policies and downright ludicrous money-making schemes.

eBay is not the impenetrable force it once was. It may still enjoy profits and sit atop the online auction hill, but it’s not going to last forever if it doesn’t start adapting and changing its business model to a strategy that adequately reflects its original vision: Online auctions. And for goodness sake, update the site — it’s poorly-designed and much too old.

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