The End of eBay?

The End of eBay?

eBay has some new policies going into effect that will significantly and negatively impact sellers, particularly small time or casual sellers. These changes will cause a reduction in the number of sellers, and thus selection, in some key niches. Therefore, these changes may also impact those who’re using the eBay affiliate program to make money through BANS sites. Let’s take a look at these critical changes, starting with the big one.

Sellers Can No Longer Leave Negative or Neutral Feedback for Buyers

This effectively guts the mutual trust arrangement that has powered eBay for over a decade. This move will cause many to simply stop selling on eBay since each and every transaction puts the public image of their business at risk. It leaves malicious or incompetent buyers capable of screwing up Power Seller status, forcing a seller to take PayPal, lowering their position in search results and other such problems. In fact, it opens the door to all sorts of buyer scamming, particularly against newer and occasional sellers.

It is true that retaliatory feedback has been a problem on eBay for some time. Buyers have often complained about sellers holding feedback hostage. Some have complained about ’soup nazi’ like sellers who would give out negative feedback if you didn’t follow their rules to the letter. But the real problem has been that eBay has failed to manage the feedback program properly. They’ve done this primarily because they fear legal repercussions. So, now, instead of taking the bull by the horns and dealing with the problem, they’ve thrown the baby out with the bath water (how’s that for a mixed metaphor).

There were some better possible solutions to this situation but eBay’s incompetent management, in their typical fashion, chose the one of the worst possible options.

Cheap eBooks, Gone

eBay says no to affiliate eBook sellersIf you were planning on selling your affiliate link stuffed eBook on eBay for a penny, that ship has sailed. Fixed price items can no longer be listed for under a dollar.

 

Sure, some people bought these to build up a good feedback score quickly, which points to another problem in the feedback system. However, they were used as an effective affiliate marketing conduit as well. If you still want to sell on eBay like this in spite of the other increased risks of doing so, you might want to look at bundling such offers or offering value-ads to make the boost in the selling price logical to buyers. Listing them as auctions might work but this could get expensive if the returns weren’t there.

3/25/2008 UPDATE: It seems that eBay is totally banning digital products. This will impact a lot of sellers of this kind of stuff as well as those who run BANS sites featuring this type of product.

 

Other Changes

Here are some more changesWhile eBay has lowered insertion fees and are making gallery pictures free, they’re offsetting this by increasing fees in other areas. They’re also heavily emphasizing their relatively new Detailed Seller Ratings program not only in search results but in other areas as well. Most of these changes favor large PowerSeller and corporate sales outlet accounts over small time, occasional and seasonal sellers.

Other feedback changes, such as including repeat customers in the count and only show the past 12 months history in the displayed feedback percentage, I see as being bad for buyers and good for bad sellers.

Competition is Needed

Make it a horse raceWhat eBay really needs, and what both buyers and especially sellers need, is a strong, deep pocketed, competitor in the online sales arena. Google is, of course, the first company mentioned. I don’t know if they would do well in this marketplace. I think that Amazon, if they made a few changes to their system, could do it. There are also some retailers who might find developing this kind of marketplace valuable as well.

This is the End

Well, with these changes, I doubt that I will ever go back to selling on eBay although I may buy inexpensive items there from time to time. It has increasingly become unfriendly to sellers while offering scant protection for buyers. And one thing that eBay often forgets is that sellers are often buyers too. Thus many may try out alternative auction or product mall platforms for both buying and selling.

What are your thoughts on these changes? Do you see them as negative or positive? Do you buy or sell on eBay regularly? Are you an eBay affiliate or have a BANS store site? Will you be making some changes to how you use eBay?

 


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25 Comments »

Comment by Adam
2008-02-01 14:15:47

When I heard this news the other day I was pretty much decided I wouldn’t be using eBay again, especially given the ease of use and free of charge services out there like Craigslist. I’m not sure why eBay thinks these policies are a good idea.

Comment by jfc
2008-02-01 14:51:22

Hi Adam,

This feedback move has been rumored for a while, at least since they started the Detailed Seller Ratings program.

I use BluJay sometimes. It’s a free fixed price listing site. It’s not bad for low priced items but you’ll have to do things to drive buyers to the site yourself.

As for the reason they do it, they’re doing it because they do whatever they think will please their institutional investors. Perhaps the wife of one of them bought a fake Prada on eBay and got a negative when they complained about it or something like that.

 
 
2008-02-01 16:19:42

[…] restructuring of everyone’s favorite online auction site. These changes could bring about the end of eBay as we know it. One of the biggest changes is that sellers can no longer leave negative or neutral […]

 
2008-02-02 00:35:23

I believe that Amazon will buy out eBay. It would make an easy add to their sites and each would drive more sales to each other.

Comment by jfc
2008-02-02 10:07:23

Hi Gary,

I’ve heard that rumor too, late last year. I had also heard rumors about Microsoft, Yahoo, WalMart and a few others. I think they were quietly shopping eBay around back then but there were no takers.

 
 
Comment by Robert
2008-02-02 01:31:32

DOH! Great time to start up BANS, huh? :)

Still, it costs nothing to run and use, so it doesn’t hurt to leave it up and running. Maybe there’s still some potential left.

Comment by jfc
2008-02-02 10:16:15

Hi Robert,

It depends a lot on the niche. Things like consumer electronics, computers, cellphones and others that have big retailers using eBay as an outlet store won’t be affected that much. Hobby niches where there are a lot of small timers will be hit a lot harder.

 
 
Comment by JHS
2008-02-02 02:14:58

Hi there. Your comment forms are not working. (Keep telling me my message has disallowed code, but it doesn’t.) Please e-mail me about a free ad on your site. THANKS very much!

Comment by jfc
2008-02-02 10:18:11

Hi JHS,

I assume you’re talking about the contact form. It’s supposed to let anything through except Javascript but sometimes it gets picky about links for some reason. I’ll send you a email response though.

 
 
Comment by Dan O. De Ment
2008-02-02 06:33:51

I use ebay rarely…I’m a “once in a while” auction seller. But to see them decrease the listing fee and then increase the final fee caught me by surprise. If I go to a brick and mortar store and they have a sale on, I do not expect to get to the cash register and have to pay a sale price fee along with the lowered price of the goods just to get out the door. Someone at ebay needs to get his or her head on straight. I’m a marketer, and the trick to marketing is getting your customers and vendors to benefit from what you have to offer.

Comment by jfc
2008-02-02 10:23:39

Hi Dan,

What has surprised me from the start with them is that there is no “buyer’s fee”. You almost always have this with a live auction.

The “sale price fee” does show up sometimes though in the ‘real’ world. You should see the contract for my house where I paid $50 for someone to carry a piece of paper across the hall.

 
 
Comment by Saedel
2008-02-02 19:06:12

Hi Frank, thanks for posting this. I haven’t been to ebay for quite some time now, so I didn’t know of any changes.

I was planning many times to sell items there, particularly technical books. Due to several reasons, I didn’t. I just go there to buy cheap items.

I also wasn’t aware of Amazon rumors, but I hope they buy out Ebay… I like their system, and I might sell my books there when I am not so busy anymore.

Comment by jfc
2008-02-02 20:12:17

Hi Saedel,

I sold fairly actively there up until a little over a year ago. Rules/fee changes, search inconsistencies and other problems caused me to stop using it and search for other online “make money” opportunities. It’s too bad because it used to be better but it’s really selling out to corporate interests, both sellers and investors. It’s like if you woke up and found most the blogs you regularly visited owned by News Corp, NBC or Disney.

 
 
Comment by Aloha Team
2008-02-02 19:26:33

lol … I’m in the same boat as Robert … just bought BANS a few weeks back. No biggie, as you said I guess I’ll just have to choose niches a little more carefully.

Thanks,
Todd

Comment by jfc
2008-02-02 20:15:48

Hi Todd,

There will be big sellers at the top of many categories. However, I’ve already seen a reduction in the number of sellers in guitars and other music related niches. The big guys remain but the real deals with the small timers are drying up fast.

I’d guess for BANS that sticking with popular consumer items in the mid-to-high price range that are most often sold new should work OK. Items with a lot of used and hobby business, like guitars, might be hit harder.

 
 
Comment by Bloggeries Forum
2008-02-04 23:22:57

I think that over time they are eroding the trust in sellers. Sadly there ISN’T a competitor that could take them on at the moment so they can continue to do this. Too bad!

Comment by jfc
2008-02-05 10:29:36

Hi Bloggeries,

There are a few small competitors out there but they simply don’t have that much traffic, particularly buyer traffic. Some, like Etsy, operate in a specific niche and are only good for a narrow line of products and have those ’soup nazi’ like rules.

I think this most recent move does open a big door for a competitor to move into the small time seller arena. The question remains though is this a profitable niche for them to get into?

 
 
Comment by Mr. Johns
2008-02-05 11:18:53

That was a good post JFC. It is a delight when someone takes the time to explain an intricate topic like this.

The severe recession which is just now getting underway will hurt both sellers and eBay quite a lot. When push comes to shove, I suspect that eBay will resend this foolish feedback policy. But, then again, it is quite plausible that eBay does not care for small business sellers at all.

Comment by jfc
2008-02-05 11:45:51

Thank you Mr. Johns,

The only way I see eBay rethinking this is if it impacts their stock price. That seems like the only thing they respond to.

 
 
Comment by sandeepshimpi
2008-02-27 13:53:40

A highly recommended site is elfingo.com for online auctions. They are the new ebay. Many smaller sites like this offer buyers far better deals than ebay ever could. Buyser also save a ton because this site charges little or nothing depending on the day. One more reaso I like elfingo.com is because they don’t take a part of the sale at all. No commissions or final value fees. A+++ elfingo.com

Comment by jfc
2008-02-27 16:04:02

Hi Sandeep,

I’ve seen several sites that are trying to be “the new eBay” and they’ve all fallen short, primarily when it comes to buyer traffic. It’s going to take someone with deep pockets, like Amazon, Microsoft or Google to put a serious dent in eBay’s business.

 
 
Comment by Obama
2008-03-07 00:15:25

I think the answer to everyone’s ebay issues is in one word… it’s called “craigslist”.

Comment by jfc
2008-03-07 00:36:24

Hi Obama,

The problem with Craigslist is that it limits your market area. For example, I’ve seen guitars sell on Craigs that would have brought up to 50% more money if sold on eBay. But it does work well for selling vehicles and other such hard-to-ship stuff.

 
 
Comment by Cect 168 Phones
2008-07-08 09:54:27

Now that a little time has passed, I am curious whether you have revised your opinion about the changes that eBay made. Have the results been as negative as you expected?

Comment by jfc
2008-07-08 13:19:23

Hi Cect,

I think the new CEO is a lot more competent than the previous one. I had expected same-old-same-old or worse but he’s actually been on the ball.

I do think that they made it a whole lot harder on sellers, particularly hobby and part-timer sellers. I also think they threw the baby out with the bathwater on the digital product sales. Some hobby areas have seen a reduction in the number of sellers although listings haven’t been impacted that much, indicating that others have filled the void.

OTOH, They’ve made things a lot better for buyers and thus affiliates though. Right now I’m making more through EPN than I was as an eBay powerseller a few years ago.

 
 
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