PowerSeller revolt looms as eBay CEO Donahoe tinkers with business model
Filed under: Company News, Technology
Online auctioneer eBay's legions of sellers are digesting the likely fallout from a significant raft of policy and fee changes announced by company CEO John Donahoe today. The quick and dirty version -- kiss the old, quirky fun eBay (EBAY) goodbye and say hello to a site that looks a lot more like Amazon.com. I spoke at length to Ina Steiner, editor of AuctionBytes.com, a noted eBay expert who has been critical of the website at times. Steiner has a decidedly opinionated take on the likely impact of the changes, which she sees as both carrot and stick. "For companies that are selling one-of-a-kind items such as antiques or rare jewelry, these rules could have a really negative impact," says Steiner. That's because the company will now offer a higher 20% discount on fees paid to eBay for its new Top-Rated Sellers category who have the very best customer ratings, while offering a diminished 5% standard PowerSeller fee discount to longstanding vendors whose customer ratings don't qualify them for the higher discount.
The move underscore the dilemma CEO John Donahoe faces as he tries to move the company away from a maxed-out auction model, to a more staid e-commerce platform without causing faithful eBay sellers to bail out in droves.
The fee discount difference can mean thousands of dollars in extra costs or extra savings for many eBay sellers. To access the newly created Top-Rated Sellers category, eBay merchants must have virtually zero negative feedback ratings from customers. This is not a problem for buyers of items such as electronics or office supplies.
But it will hurt eBay resellers moving quirkier or more unique wares, says Steiner. It's much harder for vendors to move specialty items and avoid all negative feedback. That's due to the inevitable disconnect between buyers' expectations and the reality of their purchases, which many times are not always exactly what they imagined or equal to what they saw in an online photo. For vendors of unique wares, making disgruntled customers happy through discounts or refunds may not be an option. "They want sellers to do what it takes to make a buyer happy. On eBay, that's not always a practical approach," says Steiner. "Sellers who are selling valuable antiques or high value item, its not as easy to say, keep it and I'll refund you because you are complaining."
She also noted that new search results pages on the website will look a lot more like Amazon results pages, with a product description, some product information, and a "buy box" with two or three leading eBay merchants. Links to other eBay merchants will be lower down the page. And, Donahoe has announced that eBay is aggressively moving toward more fixed-price item sales, much like Amazon.
Not that Donahoe has a made a secret of his intentions to abandon eBay's core to become a more polished e-tailer. Donahoe is on a mission to make eBay ubquitous with a massive keyword acquisition strategy to goose search engine results for eBay items. He's going to need all the help he can get if traffic to eBay continues to fall and faithful sellers abandon ship for greener pastures at niche auction and e-tail sights like GoAntiques and Etsy.com. And there is cold comfort in locking horns with Amazon, an online retailer that has increasingly sucked up a larger percentage of the e-tail market. But judging from its recent earnings call, eBay's management team sure seems eager to get into that race.
Alex Salkever is a Senior Writer at AOL Daily Finance covering tech, clean tech and green tech.You can follow him on Twitter at alexsalkever.
The fee discount difference can mean thousands of dollars in extra costs or extra savings for many eBay sellers. To access the newly created Top-Rated Sellers category, eBay merchants must have virtually zero negative feedback ratings from customers. This is not a problem for buyers of items such as electronics or office supplies.
But it will hurt eBay resellers moving quirkier or more unique wares, says Steiner. It's much harder for vendors to move specialty items and avoid all negative feedback. That's due to the inevitable disconnect between buyers' expectations and the reality of their purchases, which many times are not always exactly what they imagined or equal to what they saw in an online photo. For vendors of unique wares, making disgruntled customers happy through discounts or refunds may not be an option. "They want sellers to do what it takes to make a buyer happy. On eBay, that's not always a practical approach," says Steiner. "Sellers who are selling valuable antiques or high value item, its not as easy to say, keep it and I'll refund you because you are complaining."
She also noted that new search results pages on the website will look a lot more like Amazon results pages, with a product description, some product information, and a "buy box" with two or three leading eBay merchants. Links to other eBay merchants will be lower down the page. And, Donahoe has announced that eBay is aggressively moving toward more fixed-price item sales, much like Amazon.
Not that Donahoe has a made a secret of his intentions to abandon eBay's core to become a more polished e-tailer. Donahoe is on a mission to make eBay ubquitous with a massive keyword acquisition strategy to goose search engine results for eBay items. He's going to need all the help he can get if traffic to eBay continues to fall and faithful sellers abandon ship for greener pastures at niche auction and e-tail sights like GoAntiques and Etsy.com. And there is cold comfort in locking horns with Amazon, an online retailer that has increasingly sucked up a larger percentage of the e-tail market. But judging from its recent earnings call, eBay's management team sure seems eager to get into that race.
Alex Salkever is a Senior Writer at AOL Daily Finance covering tech, clean tech and green tech.You can follow him on Twitter at alexsalkever.
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Reader Comments (Page 1 of 4)
7-28-2009 @ 11:07AM
Patricia013 said...
I know that Ebay's goal is to become a bigger Amazon with some Overstock thrown in - all well and good, BUT John Donahoe will not keep sellers with the ridiculous requirements he's been coming out with. Ebay has lost an enormous amount of buyers - mostly because buyers can no longer find the collectibles, vintage, antique and rare items they used to find on Ebay. Right now Ebay is hardly in a position to dictate to anyone and should be thankful for the buyers/sellers who are sticking to them (for now). The truth is most sellers cannot sell on Ebay - their items are buried in a manipulated search - they are expected to give free shipping and have their sale money held by Paypal - AND they are expected to pay the same or higher fees then the huge powersellers and diamond sellers. All in all Ebay is not an attractive place for sellers. They cannot make sales and they cannot profit! They might just as well go to sites like Etsy.com, Bonanzle, com, ecrater.com, etc. and at least pay little or nothing and probably get the same few sales they were getting on Ebay, but with less spent in fees and far far less STRESS. Most sellers feel eventually their buyers will follow them and I believe this to be true too. This is John Donahoe's dilemma and if he doesn't come down to earth soon and really begin to solve problems instead of creating more problems then Ebay will keep on declining! Paypal and Skype can't hold them up forever! Its been suggested over and over again to split Ebay and make a classic Ebay for the collectibles buyers. Why he is not doing this is beyond me or anyone else who is familiar with the Ebay environment.
Who is Ina Fried? Is that Ina Steiner?
Reply
7-28-2009 @ 11:44AM
Morgan said...
Ebay has jealously been eying Amazon for many years now. Each subsequent CEO trying in vane to emulate Amazon's success while ignoring what made Ebay great originally. Almost since Ebay's inception Yahoo, Overstock and dozens more have tried to compete head to head with Ebay and all have failed spectacularly. Now with almost reckless abandon, Ebay is trying this winning strategy with it's perceived adversary Amazon. As they morph into an Etailer Borg devoid of any personality and unique seller/buyer interaction there will develop cracks in the once mighty auction giants facade. Cracks will become the footholds a burgeoning start up needs to finally tip the Goliath once and for all.
Reply
8-02-2009 @ 4:01PM
Pam said...
I agree 100%. In the beginning, eBay was unique and successful. Now it is becoming like so many other American companies...greedy. Each new CEO has to make his mark as the "exceptional businessman" and keep those stockholders happy. Except that the economy isn't what it used to be. So instead of making sure that all of the hardworking sellers are happy, they take easy route and jack up their fees. I have been a seller for several years, 100% feedback and have never had any major problems as a seller. I am honest and that has paid off. Most of the sellers are honest. Making Paypal the only way to pay was a bad move, as far as I am concerned. May have saved a few problems, but it hurt sales. But what an improvement to Paypal's bottom line! Millions of transactions took place where both buyer and small-time seller were happy. It was a grassroots phenomena. Sad end to great idea.
7-30-2009 @ 9:44AM
Joseph Marlowe said...
E BAY NO LONGER ALLOWS SELLERS TO LEAVE NEGATIVE FEED BACK TWICE IN RECENT MONTHS BUYERS UPON ARRIVAL WANTED TO GET A LOWER PRICE OR THREATENED BAD FEED BACK. I SENT ONE PACKING AND NOW I HAVE A NEGATIVE BECAUSE I WANT LEGITIMATE BIDDERS T HAVE A FAIR CHANCE. AS IT STANDS NOW YOU CAN OUT BID EVERY ONE AND THEN THREATEN BAD FEED BACK IF THE SELLER DOES NOT WANT TO LOWER THE PRICE. YOU CANNOT LEAVE NEGATIVE FEED BACK TO WARN OTHER SELLERS. I SELL A LOT ON EBAY I AM HOPING SOON SOMEONE ELSE WILL COMPETE WITH THEM I AM MORE THAN READY TO JUMP SHIP
Reply
7-30-2009 @ 10:51PM
JANET said...
GO TO www.ForSaleInc.com
ITS FREE!!!
7-30-2009 @ 9:49AM
stupid f**ker! said...
Well that certainly sounds crappy. Who is going to step up and be the next awesome auction site?
Reply
7-30-2009 @ 10:51PM
JANET said...
GO TO www.ForSaleInc.com
IT IS FREE!!!
7-30-2009 @ 9:53AM
hondaquote said...
Hello Craigslist !
GoodBye eBay - you got no brains !
NOT our problem........
Reply
7-30-2009 @ 9:59AM
mermaid said...
I buy on ebay and hate doing the star rating thing- take too much of my time to answer the questions. I place my comment on service of the item in the remarks. So that means the seller gets penalized. Sorry! I come to buy not critique.
Reply
7-30-2009 @ 10:20AM
big B said...
Been a seller for years, feedback is over 5,000. I have said since day 1 that FEEBAY sux & all that hot air about "we are doing this & that for the buyer or seller" has ALWAYS been a line of steaming crap. THEY do NOTHING if it doesn't not favor them. I love watching them go down & i hope the fall gets faster & more painful for them.
Reply
7-30-2009 @ 10:22AM
Rudy said...
I used to sell and buy on Ebay a few years back, and really enjoyed it. The program seemed fair and equitable all around. Haven't been on lately and was glad I saw the comments. I wasn't aware of Donahue's proposed and (already done) options. Now my question is, where are most of the Ebayer's going? Would like to know as I may like to follow. As one individual suggested, this is a "new" niche to open a new auction/buy/sell site to cater to the "hard core" auction buyer/sellers. Give a person a fair price on buying and selling charges, and you will soon see your garden grow. Just a little "watering" (advertising) is all it takes if the site is genuine.
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7-30-2009 @ 10:28AM
Barry B said...
I love to see E-Bay squirming. They are certainly not what they were. I stopped selling their. Couldn't deal with their crap anymore. And as others have stated, yhe feedback system is awful. There are no guidelines to customers as to what feedback is. I sell movies, a customer buys a movie and gives me a negative because they didn't like the movie. That is not the forum for rating movies, but people are stupid and e-bay doesn't explain this to anyone.
Reply
7-30-2009 @ 10:50AM
Fran said...
Ebay...ha!... that's just the tip of the iceberg. Paypal in collusion with ebay now puts a hold on all funds regarding ebay purchases until such time the item is shipped, received and Buyers are satisfied; i.e, of course unless Buyer(s) consent(s) to leaving you positive feedback before
the item is shipped or received. One would think that using ebay and Paypal alone would suffice for Buyer/Seller protection, yet Paypal purveys that the newer policy of escrowing or "holding" funds is for Buyer/Seller protection... NOT. All is does is serve thier purposes of floating monies, earning interest, etc. When selling on ebay, I disclaim Paypa's policy and suggest that unless Buyers understand and accept MY POLICY of NO SHIP UNTIL MONIES ARE FREE AND CLEAR... not to buy. Paypal's policy is reasonable for Sellers with a less-than-desirable ebay rating. But for those of us with 100% positive ebay ratings, Paypal's policy is just a nuisance. I suggest that everyone
who utilizes ebay and Paypal get on the horn to protest some of these new fangled policies. Then again, ebay and Paypal are more like machines, run by computers and servers with very little human interaction. Ever try contacting these people by phone?... It's a long, difficult and measndering path that most people don't have the time for. And it is intended that way if one has followed the experience curve all these years. Just my 2 cents...but those pennies add up, right Obama?
Reply
7-30-2009 @ 12:14PM
Dave said...
E bay has gone down hill a long way since I started and PayPal is a joke I had my first dealing with them recently because a pkg got lost in the mail The took money out of my account I had to prove I mailed it and I did but I still don't know what the outcome is the case is closed but I didn't see the money yet By the way I have maintained 100% pos feed back for yrs I'm not sure I'll sell anythig else
If anyone know of an other auction please post it or e mail me
Thanks and down with E Bay and Pay Pal
Reply
7-30-2009 @ 12:28PM
Maureen Parce said...
HELP~~~WHERE CAN WE GO?????? HAVE YOU NOTICED THAT EBAY AND OUR DEMOCRATIC CONTROLLED CONGRESS HAVE SOMETHING IN COMMON???? THEY DO NOT LISTEN TO THEIR BUYERS/TAXPAYERS???? WHAT HAPPENED TO NO TAXES WITHOUT REPRESENTATION??? THE SAME CAN BE SAID FOR EBAY....THEY HAVE A COURSE SET, AND ....DO NOT INTEND...TO CHANGE DIRECTION. WE, THE PEOPLE, MUST STOP THEM.....BUT WHERE CAN WE GO.....PLEASE SEND NAMES.....READY TO THROW IN THE 'TEA TOWEL'.......MAUREEN
Reply
7-30-2009 @ 3:49PM
Shona said...
You don't know what you are talking about! The former CEO of Ebay is running for Governor of California. McCain just endorsed her. Ebay is a Republican run company. Wow..what an idiot!
7-30-2009 @ 10:51PM
JANET said...
GO TO
www.ForSaleInc.com
ITS WORKS AND ITS FREE............... ;)
7-30-2009 @ 12:27PM
Andrea said...
I used to shop on Ebay all the time, but I stopped when they instituted "no money orders" policy. I started using money orders when my Paypal account was hacked (no, I wasn't stupid enough to share my PW or make it my dog's name.) I really miss shopping/buying vintage jewelry - I haven't bought any in about a year. But I refuse to use paypal.
Reply
7-30-2009 @ 8:17PM
BC said...
I have been selling on ebay for years. Each time they have a new policy change or format change I loose sales. I have watched my sales drop drastically each time over the years. I am sure that I am not the only one this nonsense affects. Ebay forgets that it is the seller who keeps them in business. It is the seller who makes their paycheck. Not the buyer. It is the seller that pays the listing fees, the end of sale fees, the paypal fees, and the store fees. Yet, they keep shafting the sellers and are always in favor of the buyer automaticallly when there is a dispute. I value my customers and do everything possible to make them happy. This is why I have over 6000 positive feedbacks, no negatives at all and a seller rating of 4.9. Although this new policy change will help me, it is still not fair to those who have worked hard to get where they are and, due to no fault of their own, are ripped off by unscrupulous buyers who have learned to use the system to their advantage...yes, they are out there and ebay allows them to operate. Untill ebay recognizes the value in its sellers, and learns to control its nasty habit of fixing things that are not broken, they will continue to fall. The old auction system worked very well. Why change it?
8-03-2009 @ 9:10AM
Catherine said...
Please check out Etsy.com for vintage jewelry. Lots of wonderful sellers there who offer outstanding customer service as well. You won't be disappointed. :)