By Corey Kossack

While eBay continues to hold on to an ample lead on a slew of competitors that have popped up in the e-commerce space over the last number of years, the online marketplace giant is slowly losing market share as new startups emerge with innovative solutions to satisfy online sellers who have been disenchanted with eBay’s ever-changing fees and selling policies.

Enter Addoway, a new free social marketplace for online merchants and service providers that recently closed an undisclosed amount of seed funding and is launching today. The best way to describe Addoway is a social alternative to eBay and Craigslist. Addoway brings together traditional online buying and selling with social media, in a more interactive environment than classifieds sites and a more open environment than your average online marketplace. The site was created to increase trust between independent buyers and sellers, while also giving sellers a new way to promote their products and services online without the burden of selling fees – which Addoway believes will lead to lower prices for buyers who use the platform.

Beyond its cost structure, Addoway’s biggest selling point is its ability to integrate social networking into the traditional marketplace/classifieds model. Users on the site can bring their reputations from other platforms by linking their social networks to their profile, and can easily publish their Addoway listings to their Facebook and Twitter feeds. They can also import their feedback and listings from eBay, if desired.

All Addoway users can post unlimited listings on the site at no cost. There is no listing fee to post an item and no final sale fee when the item sells. The site makes money by offering premium upgrades for users who want increased exposure on the site. Because Addoway has chosen to avoid the transaction-based business model that most online marketplaces use (where the seller gets charged a fee every time they sell something), they have the advantage of being more open than eBay, Etsy and Bonanzle because they aren’t concerned about ensuring that all purchases are made inside the marketplace. Instead, users can promote their own websites and social networks as well, using Addoway as a portal to drive traffic to their entire online presence in addition to selling directly through the site.

Addoway will face the great challenge that all new marketplaces face – attracting a large enough user base of buyers and sellers – fast enough to compete in a tough space against some very established competition. If they can overcome that all-important hurdle, Addoway has a shot to become a great tool to help people sell things socially and save money. Video below.

Disclosure: Addoway is part of the Game Change Ventures portfolio and I serve on Addoway’s advisory board.