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The Fall and Fall of eBay

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The holiday season isn't shaping up nicely for eBay (Nasdaq: EBAY  ) . Third-party traffic reports are offering a grim prognosis during the telltale shopping period. Analysts see a dip in year-over-year revenue during the current quarter, widening slightly in the following quarter.

Watching eBay take a step back is sobering. The namesake auction site has been fading for some time, but there was always another verb in the company's portfolio to save the day. Unfortunately, PayPal isn't likely to be enough this quarter. Skype is growing quickly, but it's still too small to move the needle.

If eBay is going to dig itself out of this mess, it's going to have to start with

What's eating the marketplace maker? Check back in a day or two and you'll find out. The comment box below will probably be populated with frustrated power sellers who have left the site. This doesn't mean that they are selling through cheaper and more flexible auction sites like (Nasdaq: OSTK  ) . Despite eBay's shortcomings, it's still the top dog in consumer-to-consumer auctions.

The seller is the one that has evolved. What's out there? Plenty.

  • There are free classified listing sites like Craigslist. They're clumsy and hard to police, but even eBay has become a major player in this niche.
  • Dot-com giants like Yahoo! (Nasdaq: YHOO  ) and (Nasdaq: AMZN  ) offer third-party merchants the ability to set up camp on their sites. eBay's response has been to promote fixed price listings in addition to the conventional bidding wars.
  • Google (Nasdaq: GOOG  ) , Yahoo!, and Microsoft (Nasdaq: MSFT  ) offer cheap text-based paid search advertising, allowing crafty sellers to reach out directly to potential buyers. There isn't a lot that eBay can do to compete there.

It all adds up to one big problem for the company that was on top of the world just a few years ago. eBay has kicked in with some pretty silly policy changes and delivered poorly received site makeovers during the past year, but that's not the sole contributor to its waning popularity. eBay didn't fumble as much as have its power stripped by the rest of the playing field.

Everyone has a theory. Power sellers would argue that reversing unpopular changes would win back the crowds, but I think it's bigger than that. The world has moved on. eBay needs new verbs, and it needs them quick.

More items in the eBay bid basket:

Microsoft is a Motley Fool Inside Value selection. and Google are Motley Fool Rule Breakers recommendations. Yahoo!, eBay, and are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 177 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

Read/Post Comments (54) | Recommend This Article (24)

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  • Report this Comment On December 26, 2008, at 10:16 AM, onlineseller wrote:

    I Said It long ago that ebay would not be able to hold on to there market share. There are to many new kids on the block selling the same or better service at a fraction of the cost. Ebay may have the buyers now but as sellers list the hard to find and much wanted items on other sites the buyers are finding them. a seller can save as much as 20.00 on a 250.00 sale on another site. Why would they just give up that much of there profit to eBay? If you sell antique and collectible items wich can sell for over a 1000.00 per item you would save more than 50.00 selling that item on The buyers are finding these other sites so the sellers are selling on them. eBay cant drop there fees low enough to compete wit a site like There are other sites if you do not sell antiques and collectibles. They still have paypal but goggle checkout is taking some of this businss. Watch 2009 will be the year ebay will have to prove itself.

  • Report this Comment On December 26, 2008, at 10:17 AM, onlineseller wrote:

    The Fools Rule

  • Report this Comment On December 26, 2008, at 10:26 AM, dgp100 wrote:

    With the retail cuts this year, many of the items I viewed on Ebay were available brand new for very little more, and in some cases, even lower.

  • Report this Comment On December 26, 2008, at 10:33 AM, TBeagle wrote:

    I was one of those members who have moved on! Ebay fees are not only ridiculous, but fee relief came to little and too late. I have also been ripped of by Ebay who assisted a "customer" get a refund on an item that was supposedly "not as described" before my for sale merchandise was returned per agreement and the "customer" kept my merchandise anyway! This same "customer" did this same scam to dozens of others before closing his account on Ebay. A little careful digging and this same customer used several different aliases and ran this scam several times cheating many with Ebay's help and assistance!

    Do NOT link Paypal to your checking account! This will result in your account being frozen when there is a slight discrepancy and fraudulent buyers are protected at all costs, just like those "Power Sellers"! Remember the story about the one with the gold rules? Well that includes the crooks and ripoff artists on Ebay as well! This is where Ebay is getting it's fee's from! I guess the moral of the story here is as long as you cut Ebay in on the action, gouge the buying public as much as you want. If you must, apply for paypal buyer credit through GE Moneybank and you will have a bit more protection!

    Ebay has done a great job of protecting it's fee structure! Too bad it is at the expense of customers and other honest people!

  • Report this Comment On December 26, 2008, at 10:34 AM, TBeagle wrote:

    I should mention that I now use

  • Report this Comment On December 26, 2008, at 10:47 AM, FormerEbayFan wrote:

    Thank John Donahoe for eBay's demise, coupled with all of his ridiculous policy changes. We need Pierre to step in and save the company before it's too late.

  • Report this Comment On December 26, 2008, at 10:50 AM, RicRoe wrote:

    eBay's problems are self inflicted. The more eBay has done in the name of bringing business back to their site, the more they have alienated current users that were once infatuated with the market place as both buyers and sellers.

    eBay started to seriously slide when John Donahoe was brought aboard and groomed to become CEO. Donahoe came out in front of changes which gutted the core of the marketplace and referred to any member that spoke out against the changes as 'noise'. His arrogant 'noise' label insulted the very customers he was trying to keep.

    Led by an executive team that has barely used the marketplace, eBay is now headed for obscurity because leadership does not 'get' it anymore.

    eBay, unlike Amazon) does not own inventory, and relies on sellers to provide merchandise to the site. This said, it is hard to understand why eBay executives have instituted so many anti seller policies over the past year, except to point out further proof of how out of touch Mr Donahoe and his team are with the pulse of the market place.

    Further proof of how out of sync eBay leadership is, they fail to understand that sellers are buyers as well. Alienating sellers diminishes their interest in purchasing from the site or doing business in any way with a company that is viewed as seller unfriendly.

    eBay's increased fees across the board, and called it a fee decrease because they lowered initial listing fees. Of course at the same time, fees associated with features, as well as Final Value fees increased to historic levels.

    The decision to force, sellers to accept PayPal enabled them to an even larger slice of sellers profits, has not improved the company's fortunes, but has motivated sellers to take their business elsewhere.

    eBay has become a ship without a rudder, adrift in a marketplace they have lost control of.

    eBay execs fail to understand that word of mouth is essential to the success of their marketplace. With sellers having nothing positive to say, buyers are going elsewhere.

    Until eBay is led by a team of executives with vision and experience in what makes eBay tick, eBay is destined to become the next Internet bubble to burst.

    Buyers and sellers alike have lost trust and confidence in current leadership over the series of poorly implemented policies, feedback changes, imposition of the failed DSR system, constant technical glitches, search that is horrible, forced PayPal etc...

    eBay is now beyond reversing failed policy and system changes. eBay now has to replace the entire core of enthusiastic members which they have managed to chase in addition to changing the failed policies and defective systems.

    The simplest solution would be for eBay to simply get out of being in the marketplace business since it is obvious they have no clue as to what it takes to make and keep a marketplace relevant and successful.

    John Donahoe, Lorrie Norrington and company will go down in history as the executives that managed to screw up a free lunch.

    They are not the team that will lead eBay out of the disaster they created, they are the team that turned a marketplace with millions of happy members into a poor imitation of its competition with customers who have nothing good to say about the new experience.

    This is unlikely to change until the book smart MBA's are removed, and replaced by a team of executives that know and understand what the eBay marketplace is.

    One possible fix would be for Mr Omidyer to get back to work, and restore the core principles upon which eBay was founded. He had the right ideas and the company became a worldwide multi billion dollar success under those principles. eBay will only restore itself to that level of success when the existing leadership is tossed and replaced with a team that 'gets' eBay.

  • Report this Comment On December 26, 2008, at 11:07 AM, rogandantiques wrote:

    Rubbish! Pierre has been complicit in all the garbage Ebay has been putting sellers through. He sold out his values years ago and is not any different than the rest of the thieves now. What he lacks in morals he makes up for in pompousness.

    Any man with a shred of decency would have stood up and told Donahoe and his gang to take a hike. It's easier for Piere to go back to sleep on a beach somewhere than worry about the fate of thousands of "the little people" whose income depended on Ebay having honor and integrity.

    Lots of luck people, if you invest in losers, guess what? You'll be one too.

  • Report this Comment On December 26, 2008, at 11:10 AM, BuhByeeBay wrote:

    @ FormerEbayFan

    Donahoe wasn't the first to start the destruction of eBay, Meg Whitman was! She realized a long time ago that eBay was going down the tubes and there was nothing that could prevent it. Obviously! She sold massive quantities of eBay stock in October 2007 when the price was at it's peak.

    As for Pierre? He either drank the kool-aid willingly, or he was forced to drink. He doesn't care nor can he help.

    Have you not seen the video of him? He's pitiful! He actually gave us the "eBay spin" like a pro! Very much like a politician who never give a YES or NO answer - only excuses.

    See the video for yourself:

    Have your puke-bucket handy!

  • Report this Comment On December 26, 2008, at 11:49 AM, Patricia013 wrote:

    John Donahoe came in last January with the attitude that Ebay was a big flea market and all the sellers there were nothing but "noise". He's choking on those words now...just as we promised he would! Its almost too late for Ebay to even try to turn around...but one thing is certain they are NOT going to stay in business with only the largest powersellers and their diamond sellers and the look of yet another boring catalog store. Ebay...the time has come to start grovelling...grovel at the sellers you kicked to the curb because now you're finding out we were, indeed, the heart of Ebay - and as a wannabe Amazon you stink!

    "eBay didn't fumble as much as have its power stripped by the rest of the playing field."

    This is NOT true. Ebay ALLOWED this to happen - it did not happen on its own. They almost welcomed it in an attempt to rid itself of the small sellers they found to be such a nuisance. Well, now they can stew in their own juice. A lot of us are watching Ebay's decline with great relish!

    John Donahoe....I've been saying all year that I want a picture of you and your team in the unemployment line. camera is all ready ;-)

  • Report this Comment On December 26, 2008, at 12:37 PM, teddychan wrote:

    Last month I told eBay that my account, which I'd been using to sell there since 1997 and which had recently earned Silver Powerseller status, would no longer be used for selling.

    The inability to leave neutral or negative feedback for buyers has led to more reneges than ever. That's great for buyers, they can bid on whatever they want and pay if they feel like it.

    For sellers, it's now a bigger hassle than ever. The final straw was a guy who made an offer to me on a $300 item. I accepted. Several days later he e-mailed to say that he wasn't going to pay because his account was supposedly taken over by someone else.

    I soon discovered that he had used the same LIE at least twice before. eBay account security confirmed his account had never been taken over. I reported this obvious violation to eBay over and over again. They never lifted a finger to take any action at all.

    Meanwhile I had to file all sorts of reports to get my fees back and the guy walked away laughing. It was then and there that I pulled all my listings down from eBay PERMANENTLY.

  • Report this Comment On December 26, 2008, at 12:48 PM, BuhByeeBay wrote:


    eBay bans the sale of American Flags because seller says "God Bless America"?

  • Report this Comment On December 26, 2008, at 1:50 PM, bayrefugees wrote:

    "eBay didn't fumble as much as have its power stripped by the rest of the playing field."

    That power would not have been 'stripped' if there had been none of the insane changes. We have been loyal sellers of over 10 years and 14,000 auctions and now because of the changes have diversified and sell on 4 different sites.

    In short:

    Donahoe has got to go!

    Bring back the eBay as we knew it in 2001!!

  • Report this Comment On December 26, 2008, at 2:15 PM, CandyRoses wrote:

    It's truly amazing (and sad) to watch a once-so-incredibly-successful company, that it's members built from the ground up, fully self-implode, purely from greed and stupidity on management's part.

    eBay has never taken fraud seriously, allowing fraudulent sellers to run a muck, making their site a virtual nightmare and very unsafe environment for buyers and it's only gotten worse.

    They've alienated the honest, founding members/sellers, who were also huge eBay buyers, to the point of completely packing up and moving on to rival venues, thus leaving the fraudulent sellers firmly in place to steal from even more eBay buyers with the condensed seller base in place.

    DHo was not the beginning of the end, as mentioned above, it began with Margaret NitWhit several years ago... simply put, she wishes to run for Governor of California and doesn't want the eBay failure "stain" on her record, so DHo is her scape goat.

    (California, please say NO to her corruption)

    Other buying/selling venues to watch:

    All of the sites above are free to almost free, completely worthy of a peek and a twirl... not forgetting to mention that they're FAST and FUN!

    You may also wish to check on to find your favorite sellers, who have chosen to relocate.

    It was fun while eBay lasted, however after what they've done to fully destroy the site as well as annihilate it's reputation, I'm thrilled to just sit back and watch the show as they wither and die. :)

  • Report this Comment On December 26, 2008, at 2:33 PM, sterlingdragonfl wrote:

    I am a powerseller with 100% positive feedback with over 5,000 transactions. My DSR's are Excellent and I checked all the catagory's in my store in their search and I am on the very LAST pages of all the listings. Some of my stuff is 60 pages back and my shipping fee is only 3.85. I have been on the phone and email with them all week and about to pull my hair out. They DESTROYED my business.

    Bad move for anyone to try and sell on E.B. There are too many other places out there now.

    Did I mention BONANZLE.COM ?????? Bonanzle is the best online mall I have found. They are awesome, with awsome people and very low fees. They are growing tremendously fast.

    Come check us out at Bonanzle, you won't be disappointed.

  • Report this Comment On December 26, 2008, at 2:38 PM, mrsmoondog wrote:

    My husband and I are also 'former' powersellers. Not because we have left ebay, but because our sales have slumped there so badly in the last few months we are limiting our listings to the bare minimum. Not only is ebay treating it's small sellers like surfs, but buyers are becoming aware of this and ebay is fast getting a bad reputation.

    We plan on ceasing to sell on ebay after the 1st of the year, and concentrating on promoting our listings on (which we love) and our web store. Continuing to list on ebay is starting to become impossible, as the fees are overtaking our income there. Quite simply, we can't afford to list on ebay anymore. And since the policies they have put in place in the last year or so make it very obvious they don't want small sellers like us there anyway, we will oblige them and move on.

    By the way, I've tried many of the other online selling venues over the last couple of years, and honestly, Bonanzle is the best I've seen. The potential there is enormous, and I highly recommend anyone looking for an alternative selling venue to give it a close look.

    mrsmoondog of Graphics by mOOndog

  • Report this Comment On December 26, 2008, at 2:57 PM, mastoyshop wrote:

    Hi to ricnroe, hope all is well with you and yours over this holiday. You all forgot the one thing that is most important in any business. Customer Service.

    E fell off that wagon a long time ago and yes it was MW who drug the company down and walked with OUR money. Yes the sellers provide the money to ebay. Of course now they have their fancy advertising but how long will advertisers pay when the little sellers and their companies leave. I dont Hate ebay. It has provided me with a living when I had no job, even when I was sick because I could work at home.

    I agree w the author of the best match that doesnt work. He said it didnt work. He told them and they ignored him so he moved on. I love my customers and I love the other sellers I have gotten to know in the last 8+ years. The bottom line IS important, however feeling good about getting the money is also important and eb has taken that away.

    My most frustrating moments at eb have been their sticking their nose in USPS business. Im sick of warnings about over priced shipping, Hello Free Shipping does not work. At least not in my market.

    To sum it up the previous poster is correct. I think they mentioned Bonanzle. But dont come there if you mean harm. Only come if you want a company that cares about you and will help you grow and will listen to your complaints with empathy and work with you to fix things. Oh and did I mention the warm and friendly community. And did I say its growing... Every day. Fast and they are keeping up with it too.

    Ill still be there for my ebay customers, I just feel distrust of management and adhore the policy changes that are more like bullying than anything else I can think of. And I have fabulous feedback and DSRs ... I always did. The stress caused by the bully is the problem.

    Ok see you there.

    ma at mastoyshop everywhere on the web

  • Report this Comment On December 26, 2008, at 3:06 PM, mastoyshop wrote:

    Oh Please excuse the grammar, spelling etc in my previous post. I see now it kind of goes in circles.

    Eb had me so frustrated Im like the dog chasing his tale and dont know why and cant quit. Where is the dog whisperer when you need him. Oh did I mention Bonanzle?

    And I forgot the best match search that only keeps you visable about 4 hours a day, or one day a week and only in the furthest location so the shipping is highest for the customer, or you loose money on shipping because everything you ship is 10.bucks

    Ok Ill quit.

    See around and around ...

    Im looking forward to changing my behavior in 2009.

    Happy New Year. ma at mastoyshop anywhere on the web

    And dont forget

  • Report this Comment On December 26, 2008, at 3:29 PM, 2woofers wrote:

    I've been a seller (power seller at times) on ebay. In the time I've been there I've seen so many people leave. The lack of vision and foresight by Donohoe and his retinue have brought such bad publicity to ebay that buyers are now hesitant to buy there. Their commitment to hold the course no matter what the damage is confusing to me. Their philosophy seems to be to do whatever it takes to prolong the inevitable crash rather than to take the steps necessary to revitalize the site. Kind of like slowing the Titanic down so it takes longer to hit the iceberg rather than turning the ship around

  • Report this Comment On December 26, 2008, at 3:33 PM, BHWM wrote:

    Greed is the root of all evil. What made ebay work was back in the day it was a fun win win for everyone. The buyer, the seller and the venue (ebay).

    Then it happened. Greed took over (jd), kicked they very builders of this giant to the curb to be left in the cold.

    It's sad, because it could be thriving in todays economy.

    Come to where the win win is back. Come grow with us.

  • Report this Comment On December 26, 2008, at 4:14 PM, ocdgirl2000 wrote:

    Told you so.

    Ebay CEO's have forgotten who put them where they are today. Their ingratitude will come back in the form of Karmic debt.

    And then there will be a NEW company that will soon take every single online auction away from ebay, and ebay will be a bereft and empty shell trying to look like Amazon. It's too late to win back their loyal and long standing seller customers.Auctions are not dead. Used and vintage goods are not flea market junk.

    And the sellers who left will no longer be a noise problem to Mr Donahoe.

  • Report this Comment On December 26, 2008, at 4:18 PM, ocdgirl2000 wrote:

    By the way. Ebay cannot ban me from mentioning GoAntiques and their new upcoming auction site on THIS forum. I will continue to spread the good news to the public. A power seller auctioneer with some respect for sellers will have an antique network and online auction site that will blow ebay right off the nasdaq list.I haven't been wrong yet.

  • Report this Comment On December 26, 2008, at 5:06 PM, ccrashcup wrote:

    Just like the gentleman before me stated. With shills and all the other BS that I don't even know about and overpriced mdse, why bother. If you buy 10 items on ebay, you will get ripped off on one of those transactions. I don't like those odds and it's catching up to them.

  • Report this Comment On December 26, 2008, at 5:27 PM, renagadesrelics wrote:

    It is not only the bad buyers and sellers, it is the management of eBay as a whole. They have let greed take over and by allowing the BIG boys,,,ie and others list for free, they have taken the site from being a great fun place to a who's who of commericalism.

    No thanks eBay...I sell at!

  • Report this Comment On December 26, 2008, at 5:55 PM, rexxsales wrote:

    Most sellers realize that a reversal of many of the changes to eBay's policy would help repair nthe problem. However that will only bring a partial solution. The reality is eBay has dropped the ball on bringing in new users - the life blood of growth. Instead they have placed most of their efforts towards keeping the current customer base (buyers) even at the expense of their true customers the sellers. Ebay somehow forgot that buyers do not pay the fees to eBay. Somewhere along the line they decided they (eBay) was greater than the sum of it's parts (buyers & sellers). They forced unwelcome changes on the sellers thinking eBay was the only game in town and therefore the sellers would accept them. Instead the sellers started leaving in a mass exidus. Still eBay did not listen they said we will bring in large corporate sellers to fill the gap but that only reduced the famed selection on eBay and all but eliminated the once raved about unbelievable deals. Now eBay is considered just another cookie cutter online marketplace rather than the 800 pound gorilla they were once considered. Why would eBay think it a good idea to model themselves after a lesser competitor like Amazon? Can you imagine Wal Mart adopting K-Marts less successful business plan? Nobody with any sense can. Now they are competing in amazons field of expertise and eBay is losing ground, sellers and buyers like a soda can with the opening on the bottom of the can.

  • Report this Comment On December 26, 2008, at 8:11 PM, FLGUY1 wrote:

    eBay started sinking their own ship with their ridiculous anti-seller feedback system. Buyers are angels and sellers the devil, yeah right. And now sellers must accept PayPal and no certified checks or money orders. And the eBay 'community' asked for that because of all the problems with those forms of payment. Sure, what problems? If a seller doesn't want checks or money orders they can just choose not to accept them. It was just pure greed on eBay's part trying to push everyone to use their own PayPal service for more profits. Really glad to see them go down. Won't miss them one bit.

  • Report this Comment On December 26, 2008, at 8:23 PM, dgmennie wrote:

    Many very interesting comments here about what is wrong with eBay today. I agreee with most of them as I have been a regular (but very small) eBay user since 1998. I both buy and sell. And I can tell everyone right now that NOTHING eBay had done over the past 10+ years (from sporadic site remodeling to irrational and unfair policy changes) has improved things for me.

    Looking at the big picture for a moment, eBay has morphed from a unique marketplace featuring interesting and unusual used items sold at auction to an online big-box retailer of garden-variety junk. On the auctions that remain it is now impossible to tell who you are bidding against since all bidder IDs are now effectively hidden. The official excuses given for this practice are nonsense, and as is so well described elsewhere, shill bidding and other genuine fraud now has free reign. Transparency is a dim memory of the past. I will not even go into the corrupt eBay feedback system, which always manages to say great things about so many dealers I would not touch with a 10-foot pole.

    You can tell that eBay has lost its way because they are more interested in selling credit cards, insurance (via PayPal buyer 'protections'), and charging a withering variety of listing fees, both required and optional, that have nothing to do with value received.

    It is refreshing to find out that competing online auction sites are finally gaining some traction. I will be checking them out. It is amazing that eBay could have latched on to so much overpaid management sludge that has ABSOLUTELY NO CLUE as to where the original magic came from.

  • Report this Comment On December 27, 2008, at 12:11 AM, DLweld wrote:

    Ebay is such a great example of galloping management incompentence ruining a vibrant and successful company. Ebay had a unique attribute - it was the place to go to find fascinating and wonderful stuff for auction - and where to find valuable items too - it was becoming the Sotheby's and Christies of ecommerce and with the chance to dominate even these. I was a biggish ebay seller and buyer for many years, I don't list any more as there's little point and now my standard search, which used to pick up many items of interest to bid on, now only returns a few. Little point logging on any more really - with the neat stuff going, the "eyeballs" go too, Ebay's no longer unique, just another big box estore and there are better ones out there. I wonder too if ebay had any idea of the demographics of their despised small sellers - the ones I know locally certainly aren't the mom and pop borderline poverty types but are rather well-off collectors with tons of disposable income - I guess they're elsewhere now.

  • Report this Comment On December 27, 2008, at 12:11 AM, ShortEbay wrote:

    Time Magazine, "eBay Bids for Revitalization" December 11, 2008

    "Could the value-driven eBay actually be aided by a weak economy? "In theory, yes," says Derek Brown, an analyst at Cantor Fitzgerald. "In reality, not likely, because the company's own internal issues are outweighing potential positives from the economic slowdown."

    Harvard's Clayton Christensen must be so embarrassed, so ashamed of how this pack of fools, Whitman, Donahoe and Norrington have perverted and corrupted his business concepts. He along with Bain will forever be associated with eBay's spectacular crash and burn.

  • Report this Comment On December 27, 2008, at 12:26 AM, ShortEbay wrote:

    A measure of how desperate ebay has become thrashing about in their death throes is the massive censorship now taking place on the once free and open ebay Discussion Forums.

    Posts expressing dismay, confusion or anger at ebay's mindless anti-seller policies are instantly deleted by ebay's Taliban while posts such as "Can GOOD sellers unite and stand behind Donohoe? I think we should!" take their place.

    Stalin and the Ministry of Truth would be proud.

  • Report this Comment On December 27, 2008, at 8:12 AM, rogandantiques wrote:

    Someone mentioned the possibility of Ebay regaining ground if they reversed some of their current policies. I don't think it will help. They have proven to sellers and buyers alike they can't be trusted.

    They have betrayed everyone, and trying to play "make up" now is like an abusive husband sending flowers and expecting to be welcomed back with open arms. Neither one is capable of changing, both need to be dumped ASAP.

    The best thing the sellers can do is populate the other new sites or set up your own dot com. Or do both. The buyers will follow, many of the sellers from Ebay were also buyers too, so don't forget their business either.

  • Report this Comment On December 27, 2008, at 10:34 AM, Maggied45 wrote:

    Being eBay sellers for about 10 years, we began to feel like we were no longer working for ourselves, but "for the company store."

    Over six months ago it was easy to see Donahoe was going to be the downfall of the site we used to love so we closed our eBay store, restricted our listings there to only high-end sales, and in the meantime expanded our website into Collectors Online Mall - a mall for antiques, collectibles, used items and handmade.

    The freedom of running our own enterprise and offering low-cost customizeable shops to other sellers relieves the angst that eBay has caused.

    Because we have a few stores there ourselves, we strive toward great customer service. In the spirit of helping those in the same position - we allow links to sellers other websites, stores and auction listings.

    We are certainly not alone. If eBay thought they were sending their sellers into the four winds where they would flounder, they were wrong, they''ve made us all stronger, more knowledgeable and better able to market our products. .

  • Report this Comment On December 27, 2008, at 1:56 PM, kathieskorner wrote:

    What eBay management fails to understand is that for a tree to grow and spread its branches, it does not cut off its roots. And that is what ebay has done this year, destroy many of the roots that made it a household name.

    Ebay was built on three premises - just a venue, a level planning field, and community. All three of these building blocks have been demolished over the past three years. A fun place to buy and sell is now covered by a black cloud of a hostile selling environment.

    Ebay was smart enough to spin off Ebay Motors from the base site. But they did not understand that the auction and collectibles marketplace is vastly different from retail fixed price. Rather than retain the auction of collectibles and used merchandise as a unique stand alone site they first added buy it now and then fixed price. They attempted to separate new merchandise with Ebay Express which was also the testing ground for some of the changes they have made this year. EE was a dismal failure - confusing buyers and sellers alike. But instead of learning from this mistake, management imported many of the unpopular features of EE to the ebay marketplace.

    With the growth of Amazon and small splinter sites, eBay knew that they would have to make changes to grow. But instead of adding spokes to the wheel they have tried to re-invent the wheel with poorly thought out and sloppily implemented policies. The result has been the alienation and loss of many longtime sellers and buyers which they have replaced with sweetheart deals for mega sellers.

    Ebay has never provided customer service nor have they policed the site claiming it was "just a venue". Yet they are now manipulating search results and using a flawed anonymous buyer rating system to take punitive action against many good sellers. Small sellers are being disadvantaged both by "best match" search and the rating system.

    And finally, eBay presents flawed numbers for Wall Street. One individual can have multiple user IDs (some just for posting on the chat boards) - as many IDs as email addresses. Plus it takes six months to voluntarily remove a user ID. Yet these same user IDs are used by eBay as growth numbers. There has been a tremendous growth in the number of non-paying buyers in 2008, but I doubt that the sales numbers and sell-through rate numbers that ebay reports factor out these uncompleted transactions. It takes a minimum of 14 days to close a transaction for which the buyer has not made payment.

    Unfortunately, ebay management will be able to blame the poor economy for their 4th quarter numbers, but that is only the tip of the iceberg.

  • Report this Comment On December 27, 2008, at 3:01 PM, ShortEbay wrote:

    Ebay's foolish attempt to offer what they call an "excellent buying experience" by leaving sellers defenseless from bad bidders has created a pool of dishonest buyers who are scamming honest sellers.

    Someone at Ebay KNEW this would happen when the Whitman and Donahoe plan was put in place. Ebay increased the number of bad bidders a seller could "block" from 1.000 to 5.000 when the changes were implemented.

    So if the Whitman and Donahoe ebay changes in May 2008 were seen as being so great, why did ebay increase the number of bad bidders a seller could block five fold?

  • Report this Comment On December 27, 2008, at 3:46 PM, solarfool314 wrote:

    I became an enthusiastic user of Ebay about 5 years ago, so much so that I bought stock in the company. I was a power seller for a while, having fun and making some money to boot.

    With changes that restricted easy choice of shipping, raised fees and removed the sellers ability to cry foul the experience was loosing it's early appeal.

    It seems a shame to waste my 100% positive rating so I may re-download Turbolister, reenter what merchandise I still have and try again.

    Or I may just try the competition.

  • Report this Comment On December 27, 2008, at 4:47 PM, daveshouston wrote:

    Greed and wrong priorities are the major issues with ebay. I have over 13,000 positive feedbacks and am in the Top Seller program.

    To illustrate the greed problem I pulled up our last sale, a popular dive watch. The watch cost us $137.50 plus inbound shipping from our supplier. The eBay selling price was $170. Gross margin $170-137.50 = $32.50. We're not the lowest price seller for this item. Now let's add up the eBay fees we must pay on this sale: Insertion and upgrade fees $2.50, Final Value Fee $6.18, and Paypal Fee $5.62. Those fees add up to $14.30. Subtract that amount from our gross margin and we're left with $18.59. We did make a few additional dollars on the shipping charge but that just offset the cost of inbound shipping from our supplier. So on this sale we made about $18 and EBay made about $14. EBay's cut is way too big for services rendered. They're the elephant in the room.

    Priorities are all wrong too. For example, they're selling ads to competitors and putting them in my auctions. That's right. You read that correctly. They're also cutting special deals with very large companies and bringing them on board to compete with their traditional power seller customer base. They've changed the feedback system so that a buyer can say bad things about a seller but the sellers have been given a gag order. They're scaring off buyers by overloading every customer email with worrisome warnings about fraud, cheats, fakes, and phishers. This makes eBay look like a dangerous neighborhood for shoppers. Whenever there is a problem, their Paypal subisidiary will grab your money first and ask questions later.

    There are two companies I follow really closely as a customer. They are Apple and Ebay. There is a basic fundamental difference that I've noticed. Apples customers love Apple and trust them to make great product decisions. Ebay's customers think the company has lost its way and can't be trusted. Apple's customers believe the company is working hard to give them better and better products and a greater value proposition. Ebay's customers think the company is scheming to cut themselves in on an ever larger piece of the pie and that another price increase is undoubtedly coming soon.

  • Report this Comment On December 28, 2008, at 6:36 AM, macfan1950 wrote:

    E-bay have become a joke, and the way they treat their sellers is truly abysmal. Scammers are allowed to do whatever they want and there is nothing sellers can do about it.

    One of the biggest rip offs is when a seller mails an item, buyer receives it and confirms by leaving feedback, THEN claiming Item Not Received - and WINNING! The only way a buyer is covered is if the item was sent RD or SD and for low value items, that it not always an option.

    I had only recently started selling on e-bay, but between listing fees, extortionate FVS and Paypal fees, it is a waste of time. By the time all that is taken off there is virtually no profit.

    They are too greedy and do not care about the sellers, in my mind, the sooner they go under the better.

  • Report this Comment On December 28, 2008, at 3:25 PM, petercam wrote:

    the changes on eBay are not democratic. 99% of small sellers where against it. eBay changed in favor of 1% sellers with big listings. The small seller was disregarded, he's voice was not heard, Instead the one with million junk listings was more important than the one with quality. They prefered one seller with million listings rather than a thousand sellers with 1000 listings. What could be more undemocratic ?

  • Report this Comment On December 29, 2008, at 2:58 AM, thanatosA wrote:

    In Australia, where many of eBay's changes were first introduced, their competitors like have had a field day. Small and medium sellers have turned away from the bloated giant and begun selling on the home spun product. Only time will tell whether this is the beginning of the end for eBay.

  • Report this Comment On December 29, 2008, at 4:39 PM, ocdgirl2000 wrote:

    Censorship of the discussion boards has been extremely aggressive lately! All of the most educated and locquatious commentators have been banned from posting the truth on any of their threads. Especially the posts about how these particular sellers had been scammed by sellers who lied about not receiving goods, (a very common problem on ebay, because they CAN get away with it, and the seller has to give money back in addition to losing the item to the buyer who even SIGNED the USPS receipt!!) as well as some VERO participants who use their abuse their vero privileges specifically on ebay and ebay does nothing about protecting the seller from that kind of fraud.

    This hypocrisy is beyond any repair. There is no way any seller of anything valuable would risk selling on that site any more.

  • Report this Comment On January 01, 2009, at 10:59 AM, jest09 wrote:

    I personally have been a gold powerseller on eBay for 8 years. Without some positive changes to eBay this looks to be the first year I drop below that, not due to my inventory which is at an all time high. I personally do not see myself being a part of Ebay by the end of year without changes. I spent the last part of 08 finding other venues so I do not need eBay. Sales have dropped so much on the site they have made it easy to be able to move on and let them become an outlet for big business, just like most other sites. Most copycats fail, it'll be a sad year cause eBay made it possible for me to quit my full time job in 2001 and I've stayed loyal for as long as I could. (and still hoping for the best)

  • Report this Comment On January 01, 2009, at 1:46 PM, killerinnc wrote:

    I was taken aback by the fact that this great article suddenly disappeared fron the ebay stock page on AOL. Did ebay have anything to do with it? The idiots in management at ebay have managed to destroy a once great company. ebay is headed the way of the Pet Rock.

    Corporate suicide. I hope Meg has gotten plenty of her dough out of this company which will soon fall below $5.00 and will no longer be a stock worth owning. I ask anyone out there to explain how it is that management from this group of monkeys is expected to make a good decision with the earnings that the company posts? Why not give out a dividend? We have all seen what management does with the profits: squandering them on the next great idea that they can screw up.

  • Report this Comment On January 01, 2009, at 6:28 PM, unhappyseller44 wrote:

    I HOPE SOME OF YOU READ THIS. This is a great forum for everyone to band together.

    I have been selling on and off on ebay since the days when you couldn't even post a picture on the site. Within the past 4 years I have had an ebay business as my main business. I sell a unique product so I don't fuss over best match just yet although I think it doesn't work. My stress and anger is with their new feedback system, customer service and overall lack of support for their sellers. Because let's face it, they should be kissing our butts NOT the buyers. WE make them the money.

    #1 The DSR's...what good do they really do? If I am a buyer and someone has a 4.2 out of 5.0 that is fine by me. Even 4.0 is fine by me. 4.2 is bad in ebay's eyes...RIDICULOUS.

    The way they word the number ratings on the DSR is stupid too. If you leave someone a 4 rating the wording ebay uses leave us thinking it was good. BUT in ebay's world a 4 isnt good. CHANGE THE WAY YOU WORD THINGS THEN. If anyone has left feedback as a buyer you know what I am talking about. Its like they are asking for low DSR's! RIDICULOUS.

    # 2 I dont have to go into it because we all know how stupid it is that sellers can only leave good feedback. I have had buyers literally blackmail me into doing things like refunding shipping or giving them something extra in exchange for not leaving bad feedback. When you say something to ebay, after the 4-5 days it takes for them to get back to you they want headers and proof of what the buyers are saying. (headers are a pain to get and only computer savy people even understand what they are) You know why they want that? Because most people wont figure out the header and THEY DONT BELIEVE/TRUST the sellers! They only care about the buyer.

    That wording ebay used when uses when you are leaving feedback also version of what they mean is. "go ahead and leave whatever feedback you like because you cant get any in return. We love you mr buyer. Maybe one day you will start selling on here because the guy you just bought from is leaving now"

    I have also had buyers with 0 feedback leave me neutral feedbacks the same day they bought items leaving me directions there because they are confused. Again...ebay basically says deal with it. RIDICULOUS.

    # 3 Another way sellers are getting screwed is the final value fee/unpaid item process. Again another example of blackmail and ignorance. Had a buyer FIRST select 5 items and commit to buy. I sent the invoice with discount shipping for multiple items the same as stated in the listing. He STILL didnt like the discount. (then why did he buy) in exchange for him not leaving bad feedback (see the trend here?) i gave him EVEN MORE of a discount. He never pays, i do the unpaid strike process emails. He tells ebay he paid (which of course he didnt) and threatens bad feedback again. So I lost out on the sale AND the fees! RIDICULOUS.

    # 4 Ebay reminds buyers to leave feedback and tells them there time limit is running out to do so. Cool, encourage the buyer to leave bad feedback because its been an entire week and you haven't got your item. Who cares about the snow storm in the northeast or that some overseas countries take longer to arrive (if they get there at all sometimes but thats a entire other store).

    Ebay also makes people freak out when they do get those unpaid strike emails beacause they word it like they will be suspended and go to jail. Of course then the buyer freaks out on you because THEY didnt pay. RIDICULOUS.

    # 5 Trust and Safety help/emails. I am convinced this "team" they call trust and safety doesnt exist. I have emailed them the same question 4 times and got 4 TOTALLY DIFFERENT ANSWERS!!!! Even ebay workers are confused and dont know whats going on. Oh and forget live help chat. Unless you forgot your password they cant help you with anything. I suggest if you ever have a question live chat can actually help with, you ask at least 3 different agents the same question. 2 out of 3 wins because you will not get the same answer there either.

    If you are with me so far you are either really bored, really pissed or maybe laughing. I am taking steps to take my business elsewhere and trust me when I say I know at least 3 other power sellers who are leaving. We all pay thousands of dollars a year. Ebay makes more profit off of us than we do. In return what do we get? Stress, loss profits, no customer service, blackmailed, constantly abused and not cared about...overall pooped on!

    Maybe I will go to ebay live this year so i can take a big dump in Johnny Donohoe's chair. Why not, he dumped on me all year.

  • Report this Comment On January 02, 2009, at 7:29 AM, rogandantiques wrote:

    I see unhappyseller44 isn't aware that ebay live no longer exists. Almost no one came last year and most who did come, came to tell Ebay to "Stick it". So it was cancelled until they can find or at least hire new cheerleaders. All of the old ones deserted them or were fired.

    Tough when a business has to PAY people to say nice things about it.

    This is what happens when you don't pay attention to your most valuable assets- in this case the sellers. The buyers belong to the sellers, not Ebay. Ebay has no product of it's own, it just leeches from the sellers.

  • Report this Comment On January 02, 2009, at 8:18 PM, BrightBlessings wrote:

    I too have moved on from e-bay. Would I ever go back? Not a chance. I like many others have found a new home and am very happy. I have control of my business again. My fees are more than reasonable. I wasn't looked down upon because I was a small seller.

  • Report this Comment On January 03, 2009, at 11:13 AM, dcsbodyjewelry wrote:

    I would definitely have to agree with many of the previous commentors post. My fiancee were I both HAD stores on ebay, both of us had been power sellers for over 5 years, had over 22,000 successful sales transactions between us, had made over 770 purchases, had near perfect feedback and DSR ratings, and were huge advocates for ebay both on our local community and on various social networks we frequent.

    That all changed once Donahoe took over the site and began his "DESTRUCTIVE innovation". Although neither of us were pleased with the two fee increases, or new feedback system that offers absolutely no protection for sellers to combat nonpaying buyer and scammers, the implementation of Ebay new search engine Best Match is what ultimately forced us into a position to close both our stores and set up our own websites. Our sales plummeted immediately after Best Match was the new default search engine. After nearly 6 years straight of having sell through rates above 70 percent on most anything we listed in core, we watched our STR deteriorate to less than 20 percent immediately, and we never were able to recover after that.

    Although we were certainly not getting rich selling on Ebay over the years, we were generating enough profits from our low margin-high volume sales to make it worth our time, effort and marketing dollars. Once Best Match evolved....more often than not our listings were always buried deep in the seach or worse yet....our listing were nowhere to be found. After 3 months straight suffering losses for both our stores....we knew then it was time to close our ebay stores and establish our own ecommerce site.

    Other issues that troubled us:

    Seller support and customer support in general was non existent all year except for ebay's elite top seller group, and elite power buyer group.

    The poorly worded feedback/DSR system is terribly flawed and designed for small business and causal sellers to fail.

    Given the fact that Ebay has devised a seach engine that purposely favors top mass merchandisers, wholesalers and large retailers (even though their STR and customer satisfaction ratings may be far worse than that of their small business competitors), the cost of doing business on ebay for small businesses like ours was exhorbadent after factoring in ALL fees for what little exposure we were actually getting in Ebay's new search system.

    The lack of transparency in bidding now has scared of many buyers concerned about shill bidding.

    Forcing sellers to offer fixed prices and free shipping (resulting in higher commissions for ebay) has made it extremely difficult for many small businesses to profitably compete with offsite retailers and B&Ms after factoring in ALL of Ebay's and PayPal's fees.

    The same large scale businesses ebay heavily favors on their site are quickly managing to erode buyer traffic as they merely use ebay's seller platform to generate buyer leads and then redirect those buyers to their websites enticing them with incentives and discounts to make future purchases from their webstore rather than their ebay store.

    Although we miss the OLD ebay, we certainly dont regret leaving. Our websales are quickly growing, and our profit margins are far better now that we are no longer shelling out $2000-$3000 monthly in combined ebay/paypal fees for our two stores. Taking advantage of high traffic social networks like YouTube, Facebook, Squidoo to promote our businesses has been paying off handsomely.

  • Report this Comment On January 03, 2009, at 12:49 PM, jerseygoods wrote:

    I also have been on ebay for over 6 years & 7000+ feedbacks and have seen plenty of changes...The cost of listing fees has went way up and also ebay as of Jan 15th will no longer accept money orders to force buyers to use pay pal...even though I not very happy with the higher cost they still have over 80,000,000 potential customers... I checked out some of those other web sites and im not impressed! So I will stay where I am at for now.

    They will have to lower their cost if there is new worthy competition. I have Coveralls and work shirt & pants If you like to check out my listings Look up items by sellers and type Jerseygoods!

    Thanks and Happy New Year!

  • Report this Comment On January 06, 2009, at 10:40 AM, peterjlist wrote:

    I'm one of those who is LAUGHING and dancing for joy at this. Seriously, having my account yanked by them right before Christmas for no valid reason is just the most recent reason I hate them. Never in the history of business has there been a company with so many hating, venomous "customers" (as the sellers actually are), and eBay cannot possibly recover their greatness without suddenly rolling their fees back to 1997 and keeping them there. Which won't be what investors want to hear.

  • Report this Comment On January 07, 2009, at 1:18 PM, rogandantiques wrote:

    I'm not laughing or dancing for joy. I worked hard as an ebay seller and ebay pretty much decided they only wanted big box sellers and high volume sellers. None of my items were "new" so they are not easily replaced with another sellable item after something sells.

    They also took away my ability to defend myself by allowing sellers to leave only positive feedback regardless of how the transaction went. Even if the buyer never paid you could only say nice things. So the feedback system is now totally worthless. Kind of like making sure every kid in school gets an "A" deserved or not. It takes away their need to to make an effort when there is no consequence for their actions.

    Now that ebay ruined it for me and thousands of others I work even harder elsewhere to pay my bills and stay afloat. Just think of all the ruined Mom and Pop businesses and the homes lost due to unpaid bills because ebay took away the chance at making a living, putting food on the table, paying for heat and electricity in the home.

    The good part is I don't have to give up my integrity or honor like I would have been forced to do if I stayed with ebay. You know the story, politicians and ebay management swim in the same pool. You figure it out.

  • Report this Comment On January 08, 2009, at 12:50 PM, elenahughes wrote:

    I'm amazed at the number of disgruntled ebay sellers out there! Although I shouldn't be. Last time I tried to place an ad on ebay, it took me 2 hours to go through the whole process, then I never did get my ad on there live. I didn't understand the error message I kept getting...too complicated!

    I prefer simpler, more affordable classifieds sites, like <a href=""></a>. It's user-friendly, it offers regular classifieds and auctions, it has the latest video technology, and it's not only free to list, but they pay you 25 cents for an ad! I don't know how they do it, but I hope they make it!

  • Report this Comment On January 12, 2009, at 2:55 AM, BHARDMAN08 wrote:


  • Report this Comment On May 18, 2010, at 12:27 AM, bidstick wrote:

    Thanks for sharing great links. I normally get the best deals from

  • Report this Comment On January 01, 2011, at 11:33 PM, kellywilliams22 wrote:

    I think eBay is definitely going to lose its market share, but I still think it's going to be a huge player and writing the article with the title "The Fall of eBay" is obviously ridiculous. eBay won't be falling anytime soon, but they will have to compete with new penny auction websites like this one:

  • Report this Comment On December 23, 2015, at 2:23 AM, jiffle wrote:

    Yeah even now, four years later eBay is still the biggest player in that market. The title was a little misplaced but hey, everyone predicting the future can't be right. There are now lots of free classified ads sites, for example!

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