eBay Takes It on the Chin

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Some people just can't get enough of kicking an aging bully when it's down.

My email was buzzing over the weekend, after news reports indicated that the winning bid of just more than $3 million for a massive music collection on eBay (Nasdaq: EBAY) was bogus. According to the unsuspecting buyer, someone apparently hacked into his account and made the fraudulent bid.

"The initial press eBay skated on was sure sweet," one reader wrote after the deal fell apart. "I sure do hope the press will give eBay the bitter pill they deserve."

She's not the only person getting a kick out of eBay's face-egging. eBay may be the world's largest online landlord, but tenants and ex-tenants alike seem to enjoy bashing the auction marketplace.

On Feb. 18, several incensed eBay sellers -- upset over recent feedback changes, fee adjustments, and transaction requirements -- went on strike. The boycott has been extended until next week, but does it really matter?

Sellers aren't quitting e-commerce cold turkey. If they have found acceptable substitutes -- anything from rival auction sites like Overstock.com (Nasdaq: OSTK) to low-hurdle marketplaces like Amazon.com (Nasdaq: AMZN) to free classifieds on Craigslist to generating direct leads through paid-search ad campaigns with Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) -- why come back at all?

If there is a more effective creator of commerce than eBay for many of these disgruntled sellers, it's not much of a stretch for an embargo to become a permanent migration.

How effective the strike has been remains to be seen. Third-party eBay-listing trackers like Medved show a dip since late February, but the same site shows how traffic has dropped substantially after Valentine's Day for several years in a row now.

eBay was also on the ropes before the strike, with year-over-year domestic declines in two of the last three quarters. In other words, it's hard to tell if the strike is having a tangible impact on eBay or if this is part of the grander seasonal trend combined with eBay's gradual slide into e-commerce irrelevance.

Obviously, the frustrated power sellers will fill my inbox with anecdotes of how they are the ones taking down eBay with their virtual battering rams, but the company's struggles lately indicate that this may very well be an insider job, too.

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  • Report this Comment On June 19, 2008, at 6:36 PM, UnhappyEbayer wrote:

    If you saw the listing count, without Buy.com, you would be shocked!

    Ebay is causing sellers to leave in droves, with the new policy changes. Tens of thousands are upset and will be protesting at Ebay Live 2008, this week.

    The changes are idiotic. Sellers can no longer leave negative or neutral feedback, even if a buyer bids, wins your item, ingores your emails and doesn't pay. What right do they have to leave any feedback, if no transaction has taken place? We have sellers, bidding on competitors items and ruining their feedback, just to get a boost, on their own items.

    Ebay went in and retroactively turned all neutrals, to negatives. Neutral, means just that, how can ebay call neutral, negative? They started giving new discounts to people with good ratings, but they knock them down first, with the neutral change, so that many can't even meet the requirements, for the discount.

    That is not the worst of it. We have thousands and thousands of sellers, who have closed their stores and we KNOW that the listing count should be going down. But, we have uncovered the source of the raised listing counts and I can't see it being anything, but fraud.

    The seller BUY or Buy.com was taken on by ebay, right at the time ebay KNEW they were going to lose sellers. They are using buy.com, to pad the listings, to make it look like the count is up, when it really isn't. We have found thousands upon thousands of fake listings, that have no description and you can't even buy them. I found them ending tens of thousands of listings early, saying they are no longer available for sale and then immediately relisting them. Most likely to keep the sell through rate up and then relisting them again, to up the listing count 2 fold. They don't even pay any fees, being owned by ebay, so all the listings that they are padding, aren't even bringing in revenue???? Something isn't right here!

    Isn't this making the stockholders think that listings are up, when they really aren't? We have all the proof documented. I even have it documented of when I was talking to Ebay Live Help and asking them about all the ads, being ended early and it immediately stopped, when they found out that we knew about it.

    Please help us in exposing them, for what they are trying to pull. The boycotters should have a fair chance, to show what is really going on, behind the scenes.

    P.S. You can find the revolt going on at: http://forums.ebay.com/db2/forum.jspa?forumID=113

  • Report this Comment On January 24, 2009, at 7:04 PM, Seller101 wrote:

    What eBay fail to analyze is that their policies and changes are not gear to help their core supporters, the sellers! We the sellers are the ones that make the money for ebay, the direct consequence is very simple we the sellers are no listing as many items as we once did, because the Sellers fees are used to staff programs geared to prevent sellers from selling on Ebay, the coveted Best Match search is fatally flawed, it list the most expensive items first –hence making more money for ebay, if they sell- We can't believe that eBay is using Their coveted ‘Best Match” search engine, As their vehicle for a better buyer experience! The reason most sellers are switching to fixed priced sales is because their merchandise is getting buried in the "Best Match" black hole.

    The only reason auctions have gone out of favor is because ebay has relegated them to the bottom of the barrel and cater to big ticket uninteresting and overpriced things, which for the most part DO NOT SELL, but ebay still gets their insertion fee.

    Ebay imposes a policy that cuts deeply into sellers pockets, violates the Bill of Rights, and makes it harder to do business, Sellers are only allow to leave positive feedback, turning feedback into a senseless, one way only, extortion ridden tool, the feedback, which sellers cultivate for years, means nothing now.

    The new mandatory Paypal rules are so bogus-- and smack of restraint of trade. They tried this in Australia and lost. Who ever heard of a venue outlawing checks, MO or legal tender? Ebay owns Paypal and with listing fees, final value fees and Paypal fees it's double-dipping on a sale.

    Take this mandatory Paypal rule. It has poor security, and now Ebay wants us to only use that payment system? It would be like going into a Sears to buy a lawnmower with cash or a check and told 'we only accept Sears credit cards.' It's madness.

    Ebay flourished as people sold off Aunt Tilly's silver set or Uncle Waldo's Elvis records.

    The Best Buyer Experience is coming to eBay To find great products at great prices! Buyers come to eBay to find a bargain, Buyers come to eBay to experience the eBay That wants to offers the best deals in the internet! But now eBay default search systems, List more expensive items first with total disregard of ending times or pricing These changes are causing a tremendous Decrease on sales with the direct consequence Of a decrease on the number of successful listings.

    The DSR system is another failure, the feedback rating is not based on a 100 point scale, For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With ebay, 4,5 is average and 5 is good! Consequently making the seller looks bad, For this reason, good sellers offering great service and products are being suspended from ebay by record numbers, this cuts the core business at ebay Unfortunately, Ebay management become so enraptured with its tale of its own brilliance that they thought they could afford to batter and bleed the sellers over and over again, forever. Ebay Stock was $30-$32 less than a year ago and yesterday dropped to $11.67 A year ago, EBay said it would reduce listing fees and make selling standards more stringent to attract buyers, on the contrary sellers are listing less not only that but the smart ones sold their ebay stock! It won’t be too long too see ebay stock fall to $6 or less, Ebay is pushing away its partners, sellers and buyers, it is only going to make profit softer and push away investors, as ebay CEO said “We didn’t gain ground, but we didn’t lose any.” Lets see if he can say the same in this coming summer.

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