EBay Auction Site Behaving like a Teenager

First of all, rather than bore readers with all the new fee details being reported in numerous places around the Internet, I offer these links to get the specific information yourselves direct from eBay.

• For eBay.com Changes click here
• For eBay UK Changes: click here

Having done that I can now look at the deeper impact of the changes being made and offer my opinions.

I've learned over recent years to ignore the terminology used in eBay speak and focus on the substance. For example, we should all know by now that fees that are going down will be called just that, decreases, and we also know that rising fees are not increases but 'adjustments'. Clever eh? So my advice is to disregard everything but the actual facts contained in all that was said and announced in the past day or so.

Once you've cut through all the babble, and examined the substance of all the changes what do you find? Do you see the attention you thought was necessary to tackle the worrying business trends eBay seemed to be admitting to at last? They think you should I'm sure, but do you? What I see happening is a huge gamble but I'm not sure they would agree with me.

It seems eBay decided it had so many changes to introduce it was going to get it all done in one big hit for sellers and clear the way I guess for some carrot throwing to buyers as the 'Best Match' search and feedback changes come to the fore in coming weeks.

But the effect of this worldwide set of changes all at once was to virtually silence opinions in favour of just statements being posted on many blogs, confused sellers were left unsure what to think for hours on end and some mixed messages from real time commentators led to several misunderstandings, swaying opinions, repeated questions and general uncertainty continuing in blogs and forums for much of the day. But in the end I was left thinking that, what we were all led to believe would be announced, was announced and it was only the actual detail that will worry people.

So the pro-everything-eBay commentators remained up beat as usual - choosing to suggest everything was probably 'good news' and, at the other extreme, we had the usual people crying 'foul' before speakers had even sat down.

As the day unfolded and the impact of announcements started to take shape I sensed it was largely pointless for me to form any opinion until it was all out and available to analyse. So the only news about eBay you've seen from me since these changes started to be announced was to confirm the closure of eBay Express in the UK. I guess it was viewed as a good day for eBay to mention that with all the other distractions around.

So, anyway, now I've looked at it all. I think I've seen all the new changes planned to the feedback regime and understood the new fee structures - and I've also noted the odd surprising variation that's occured between the US and UK.

I can see why some of the headlines about the feedback changes will scare no end of sellers initially. But I can also see the importance and sense in removing the ability for rogue sellers to scare buyers away from eBay too. On balance I can see feedback causing much more grief among sellers than it truly merits once you come to terms with the full impact of all the annoucements made.

So why do I dismiss the feedback changes so lightly? Well, I think you need to look at how this feedback will be used in future. There are many aspects in the revised system of benefit to sellers. Poor histories can be repaired more quickly if feedback standards improve, buyers will not be able to leave bad feedback for a few days after a sale and so on. But the most important reason I'm glossing over the feedback changes is to recognise who it will be that receives buyer feedback in future.

If I understood things correctly, a sellers Detailed Seller Ratings (DSRs) will now impact heavily on eBays new default search known as 'Best Match'. Also, reading between the lines, the bigger the volume of sales you make on eBay, the more visibility you will get from 'Best Match' too. I suggest you read this paragraph again to be sure you understood it before moving on.

In addition to this search bias toward powersellers, the bigger volumes you sell on eBay the bigger discounts you can qualify for. If you don't sell at least enough to qualify as a bronze level powerseller you wont get any discount. In addition to this, if your DSR feedback slips down, you lose discounts too - powerseller or not.

So it looks to me that 'best match' means placing the items listed by well behaved powersellers first and effectively hiding the listings of small sellers and less well behaved volume sellers last. I presume eBay will be opening a site on the Moon for the badly behaved small sellers!

Free gallery pictures were only granted to users on the US site, but the sale of a £10 or $20 item on both sites will cost much the same in combined listing and final value fees (using $2=£1) after these changes. That amounts to roughly between 11 and 12% of the final sale price until you reach the lower FVF levels(and before the new seller discounts are applied) compared to about 10% before. In fairness, those with poor sell thru rates will see a little additional saving in their relisting overhead from now on.

In the UK the discounts to volume sellers will range from 20% to 40%. In the US the discount rates will be less, ranging from 15% to 35%. So, it does seem volume sellers can reasonably expect a marginally lower fee burden on both sides of the Atlantic when it all works out.

But getting back to 'Best Search' a moment. The silly ones among us will assume this means the best matching items for the search term a potential buyer types. But in reality it seems this will really return the best items being listed by the sellers that match eBay's powerseller profile - and then only if that powerseller hasn't had a feedback issue lately.

So what is eBay becoming? It certainly isn't a level playing field now for any number of reasons. It certainly isn't the trading platform for 'Moms and Pops' Pierre Omidyar founded in 1995. It is very definately discriminating in favour of the powerseller profile now. That will bring smiles to some faces and scowls to others. Fair play I say. It's their site and they can favour a certain profile of seller if they want to. Who are we to say they can't?

Moms and Pops - or casual sellers if you like - were effectively told today that their fees are rising, their visibility is reducing and, if they don't behave and attract a bit of neggy feedback at some point in time then their items will be automatically listed for buyers to browse on www.eBay.moon in future.

Now I dare say eBay - having turned 13 - doesn't give a stuff about 'Mom & Pop' any more. After all teenagers know Mom and Pop are old has beens and stupid. Huh? Ten sales a week for a measly seventy bucks? Waste of time dude! If you are a powerseller your own stats may well lead you to agree. Why bother investing in these old fashioned has beens? It's the big boys in the hood that do the real business... isn't it?

I can see how the modelling of this new pricing worked like a charm in the spreadsheets. There may even be an employee somewhere that knew what a slide rule was but it probably got listed under antiquities. But what was obviously lacking was a mature brain that doesn't expect human beings to behave like bots and wont always obey the laws of maths or respond to a formula typed in a spreadsheet. But eBay knows best. eBay's 13 now don't you know!

So, if he can turn his baseball cap backwards to be prepared, I have a few questions I would like to ask our adolescent friend.

• So, eBay, you're happy to see your struggling competitors have the crumbs of business that your Moms & Pops currently generate and concentrate everything on the powersellers now. Is that right?
• Did the spreadsheet calculate the loss of business for your powersellers as a result of these changes and the reduced buyer activity that will result?
• Are you sure the carrots you are throwing affiliates and buyers will redress that loss?
• What was the average level of purchases on eBay by your 'Moms and Pops' and numerous other small scale hobby sellers recently? Powersellers need to know what you're risking don't they?
• Which of the alternative auction sites you've just thrown a lifeline to would you like the people who built eBay to join now?
• Do you eventually plan to spend shareholders money buying your business back again once 'Mom & Pop' prove they can still create a decent and fair P2P trading site?
• Did the spreadsheet also forecast the number of smaller sellers that will overstretch themselves chasing volume discounts and, as a result, fall foul of your DSR algorithms? They will vanish in to the Best Match powerseller 'Hall of Shame' as a result where items will still attract fees but perhaps get seen by Googlebot ten days after the listing ends. Am I right?
• When these guys find they can't sell anything from page 38 of a search return do you suggest they take their inventory and purchasing to another site too? Would this be the same site as Mom & Pop will be using now?
• Is the eBay user ID 'Walmart' taken?

Now I'm not silly. I realise eBay must know they are risking the loss of many peoples buying on the site if they are made to feel too alienated as modest sellers. Yes we've yet to hear the details of the proposed buyer discounts and we've already seen noteable increases in affiliate commissions too. But is that enough?

My gut feeling is eBay have missed the target by a mile in this widescale review. I dont think they understand the true nature of the eBay community at all, or the real mentality of the majority of users.

By appearing to suck up to the volume sellers in a desparate attempt to clone Amazon's recent strategy they have concentrated on the wishes of the most selfishly focused and inflexible eBayers possible. That's not meant as an insult to powersellers at all as those are distinct qualities to have in the volume selling business. However, although these volume sellers are responsible for a healthy percentage of eBay listings, they actually only represent a minority in terms of user numbers. Powersellers are rarely powerbuyers so they need the large membership base, happy to be selling their little bits and pieces, because they are buyers too. It's not just their bits and pieces that may go elsewhere if eBay do alienate them too much, they will almost certainly take their wallets also.

So to my eyes this is a big gamble. If eBay's unloved Mom & Pop start to take the very obvious hint and remove their blinkers, life is going to get interesting. Mom & Pop might just see there's a few even younger kids around that will prove a lot more grateful for their love and care while still respecting their elders. If that starts to happen then God help eBay and the powersellers that have bought in to this statistically calculated roll of the dice.

GW