Ebay policy changes, good or bad?

"Increasingly, many sellers are asking themselves this question, especially in view of the recent and proposed changes to ebaY's modus operandi, i.e. final value fee increases of up to 66%, increasing the integration of paypal, together with it's associated high fees (in some instances this will be the only payment method allowed), new feedback rules, due to come into effect in May, reduced visibility for many sellers in the item search and of course incoming CEO John Donahoe's statement that he wants to rid ebaY of it's "fleamarket" image and referring to protesting sellers as "noise".
Whilst ebaY is by far the largest and busiest online auction at this moment in time, in my opinion, sellers would be foolish not to explore other online options, as I feel this is only the start of many more changes to come.
Finding viable alternatives is no easy task, but it is not impossible either. Many competing auction sites have seen large increases in their user bases in recent weeks, partly due to disaffected sellers and buyers leaving ebaY, if this growth continues, some might just offer the alternative many are seeking.
In my view, if enough sellers start using alternative online auctions, this may just tempt some buyers to use these same auctions.
This will not happen overnight, but if sellers are prepared to put their efforts into promoting their new "home", they may succeed.
Sellers can promote their inventory in numerous ways.
Firstly let all your new and existing customers know where you are going by putting a link to your new "home" in any emails you send.
Offer discounts to buyers, (everyone loves a bargain), this may be a viable option, as many other online auctions have much lower listing and selling fees.
Join forums and blogs, put a link to your chosen venue in your signature, this will help to increase traffic.
Consider opening your own website to run in tandem with your auction listings.
In my opinion, the time to act to protect your own interests is NOW, not months down the line when you see your hard earned reputation going to the dogs, after all who knows what John Donahoe may come up with next."

"If you are a user of ebaY, you may have heard about the recent feedback policy changes, new fee structure and new item search priorities.
Whilst I have issues with all of the proposed changes, my main concern is the change to the feedback system, which is due to take effect in May.
Under the new feedback system, sellers will not be able to leave neutral or negative feedback for buyers, whilst buyers still retain the right to leave negative, neutral or positive feedback.
In my opinion, this new system is totally unjustifiable, as it allows one party, the buyer, free to manipulate the feedback system in any way they see fit (whether the feedback they leave is justified or not), without any possibility of reprisal from the seller, who can only leave positive feedback.
The new system will enable manipulation of sellers feedback by both rogue buyers and also their competitors.
Rogue buyers will be able to use the threat of leaving a negative as a tool to try to get a price reduction or reduced or free shipping, whilst competitors could buy a low value item with the sole intention of leaving a negative comment to harm a sellers reputation.
This is not as trivial as you may think, once a seller's feedback drops below a certain percentage (about 95% I think), their listings will receive less visibility in search results (thus lowering their sell through rate), with priority given to sellers with a higher percentage of positive feedback.
These changes to feedback will have a real impact on many sellers profitability, indeed, many sellers are already actively seeking alternative venues to sell their inventory.
The present feedback system is not perfect, but it has worked reasonably well for the last 10 years, giving both buyers and sellers a means of establishing whether or not to enter into a transaction, whilst the proposed feedback system will alter this drastically, especially from the sellers perspective, making it impossible for many sellers to continue doing business here."

In my opinion, relying exclusively on Ebay, especially if it is your major or only source of income, is foolhardy to say the least.


In view of the statement by incoming CEO John Donahoe, that he wants to lose Ebay's "fleamarket" image, I would question if Ebay wants the smaller independent seller at all or is it just possible that these new changes are designed to push the independent sellers out?


Consider this, come May, when the new feedback system kicks in, you start getting negatives,(for reasons given in the post above), so then your feedback percentage drops dramatically, this then has an adverse effect on your items visibility in search results (priority in search results will be given to sellers with a higher % of positive feedback), as a result your sell through rate also falls.


Add to this the fact that pay pal can hold on to funds, for up to 21 days in some cases, things then begin to look rather bleak for the independent sellers.

Of course I may be wrong, but I would recommend
Ebay sellers to actively seek viable alternatives, just in case I'm not.

OK, you're selling on ebay, results are pretty good, why look for alternatives?


The main reason is not to have all your eggs in the one basket. Total reliance on ebay, or any other venue for that matter, is a risky strategy, simply because if that venue ceases to work well for you and you are totally reliant on that income, where doe's that leave you? Up the proverbial creek without a paddle, is where.


In my opinion, sellers need to start exploring other options, to lessen the impact of decreased sales on ebay, which I feel are inevitable due to the policy changes, so that they are better placed to survive without ebay.


To be perfectly honest, at the moment, ebay is by far the largest online auction, with easily the largest audience, so finding alternatives is not going to be easy, far from it, it's going to be hard work. There are ready made alternatives in certain categories, such as Amazon for books, dvd's, software etc., other specialist sites for different collectables such as "Delacampe" and "Specalist Auctions" and other niche sites for crafts etc. However, the choice of viable venues for general merchandise is limited, to say the least.


Well, Rome was not built in a day, neither was ebay for that matter, so the only way to build viable alternatives is to try other venues, give them some of your business and maybe we can then enable a few to become strong enough to give ebay a run for their money, after all this is what ebay needs, competition, to stop them from introducing even more draconian measures in the future.

The title is from an ebay announcement on 20th March.

Good news, or is it?


Let's examine their announcement a little closer. First I will quote from Ebay's original announcement, section by section, then I will offer my views in the brackets which follow.


"We recently announced substantial changes to the eBay marketplace for 2008."

(We recently announced changes that will make it:- impossible for sellers to maintain a high positive feedback score, harder to get their items seen in search results, easier for scammers and rogue buyers to create havoc in the marketplace).



"These changes are designed to provide clear incentives and rewards for sellers to continue offering good service, and give buyers even greater confidence to come back more."

(These changes are designed to increase our already substantial pay pal revenues and give scammers the green light).


"Since we announced our Final Value Fee (FVF) discount scheme for high volume sellers who offer great customer service, we've been encouraged by the intense focus that our seller community have placed on improving their own Detailed Seller Ratings (DSRs). To support this effort, sellers will be excited to hear that we've set up an extra bonus discount for Final Value Fees recorded in March."

(Since we have just increased final value fees by up to 66% and made it nigh on impossible for 95% of our sellers to maintain a high enough DSR to quallify for these reductions it will not cost us a bean).


Which outcome do you favour, Ebay,s or mine?

Sounds difficult I know, but read on to find out.

Ebay made the following announcement to UK sellers on 24th March 2008.

"Buyers are more confident and likely to buy on eBay, and sellers more likely to see their listings convert into sales, when PayPal is offered as a payment method. It also means we can provide protection for buyers should things go wrong.

We'd now like to update you on a number of changes we're making that will make it safer and easier to buy and sell on eBay.co.uk.

Offering PayPal as a payment method

Currently, PayPal is offered on about 95% of listings on eBay.co.uk. Starting in late April 2008, we will require all sellers on eBay.co.uk to offer PayPal on their listings.

Transactions made using PayPal result in significant reductions in fraud, and having every listing on the site offer a trackable, protected payment option will boost buyers' confidence so that they return to shop with you even more.

Sellers will continue to be able to offer other payment methods alongside PayPal, as per eBay's Accepted Payments Policy. Listings in the Motors Vehicles category will be exempt from this policy..

As an intermediary step, announced in January, we will require sellers to offer PayPal as a payment method in the following cases from 25th March 2008:
1. For all sellers who have a feedback score of less than 100 (regardless of feedback percentage)
2. For all sellers when listing an item in several specific categories

Find out more about offering PayPal on your listings.

Holding Payments

We want buyers to enjoy shopping on eBay, so that they return often to buy from eBay sellers.

To ensure this continues, PayPal is targeting a very small percentage of sellers who pose the greatest risk of driving away buyers by not successfully completing a transaction, and holding their payments until we know that everything in the transaction has gone to plan.

This measure is targeted at a small percentage of sellers and the overwhelming majority of sellers will be unaffected.
Find out more about payment holds and who will be affected.

Finally, we look forward to announcing the details of expanded protection for Powersellers in the coming days.

These changes are part of an ongoing plan to evolve the eBay marketplace, and we thank you for your support in helping ensure buyers and sellers are increasingly protected and confident transacting on the site.

Regards,

The eBay Team"

What is Ebay really saying?
Should their announcement really read something like this?
We realize our recent changes to the feedback system, massive increases to final value fees, impossible to meet criteria in our detailed seller ratings and open invitation to scammers to use the Ebay marketplace, will make it impossible for most of our sellers to maintain their current sell through rate. However, as we own pay pal, we thought this would be the ideal way for us to increase our revenue, without the need to actually increase sales on the site. We here at Ebay are 100% motivated by the desires of our shareholders, if this means penalizing, or possibly putting some sellers out of business, we are confident our shareholders will agree that this is a small price to pay.


Oh well, why expect anything different from Ebay, after all the massive final value fee increases were
hidden in the announcement telling sellers that listing fees were being reduced.