Ebay Sellers Boycott gains traction; competing sites grow

In the early morning of January 29th, 2008, President of eBay North America announced coming changes to the eBay Marketplace. As would be expected, all changes were presented with the idea of, “improving the overall experience for our customers - both buyers and sellers.” The categories of change were laid out by Mr. Cobb; fundamental changes for pricing, seller standards, incentives and Feedback. You can read the full unedited version of Bill Cobb’s eBay changes announcement here at eBay. If the changes announced didn’t seem like enough, Bill Cobb also revealed he would be leaving eBay and this was his last announcement he would provide.

At first there were some stories and blogs announcing that eBay was dropping their prices and that users could expect to save money. It didn’t take long for eBay veterans to closely analyze the announced changes and reveal that they saw a big problem with the fee changes. While it is true that eBay does plan to lower insertion fees for auction and fixed price listings 25 to 50 percent, they are increasing final value fees to more than cover the reduction.

In addition to the fees being increased on the back-end, eBay has also passed some tight measures concerning their own online payment processor, PayPal. With specific types of transactions performed through the eBay Marketplace, eBay has stated it will hold the PayPal payments for up to 21 days. In addition to holding payments longer, PayPal is also being forced onto a wider group of eBay sellers that have low feedback or are new to the eBay Marketplace.

While eBay sellers are definitely upset about the fee increases which have happened many times before, the one thing that seems to really have sellers up in arms is the feedback changes. Feedback is essentially what eBay has been built on from it’s inception and is really one of the parts that made eBay one of the first adopters of the Web 2.0 environment. Feedback abilities will now be limited to sellers so that they can only leave positive feedback for buyers. Buyers will still be able to leave positive and negative feedback.

The new CEO of eBay, John Donahoe could really only come up with one good thing to say about eBay’s feedback change, he stated It’s the, “First time in eBay’s history for removal of negative feedback” in an interview with AuctionBytes’, Ina Steiner. For the full transcript interview with John Donahoe you can read it over at AuctionByes here. Ina Steiner brought up the fact that eBay sellers could be blackmailed into having to provide refunds or other bonuses if a buyer threatened with negative feedback. In the past, sellers have had the ammunition that they could also leave negative feedback. With nothing to give them leverage, seller’s will probably find themselves being gamed by bad buyers.

An interesting piece from the interview with John Donahoe over at AuctionBytes comes close to the end of the interview. In response to a question from Ina Steiner as to what the incentive was for sellers to stay at eBay Mr. Donahoe states, “The incentive for sellers to stay on eBay is that they are continuing to sell great volumes on eBay. This is so, again, we had the largest number of traffic in the 4th quarter.” While we’re not saying that Alexa’s traffic metrics are perfect, they do provide a good general look at traffic trends and looking at eBay’s 4th quarter it’s hard to see what was being referenced. As you can see from the included graphic, traffic doesn’t seem to be largest number of anything. In fact, it looks like the 4th quarter was the worst in terms of traffic in eBay’s last 7 years. You can analyze this traffic in traffic rank, pageviews or reach and they all look terrible. The first graphic is the 7 year traffic trend and the second graphic is a 3 year traffic trend to show you more detail.

With all of the changes eBay is making, you can expect that some sellers have been getting upset and threatening a boycott. There have been boycotts before in eBay’s history and in all truthfulness, they have mostly been a lot of talk and not much action. This time around however, there seems to be more uprising brewing thanks to petition sites like this one, an established website for PowerSellers to communicate called PowerSellersUnite.com and even YouTube videos like this one and this one

cropping up to spread the message.

The uproar and upset eBay users have been dismissed by eBay Corporate as expected and nothing they are actually worried about. Interesting enough though, eBay has been running a 20 cent listing promotion, so that the promotion will land increased listings during the planned eBay boycott. In addition to running this promotion, eBay has also announced more fee reductions for sellers involved in media categories like Video Games, Movies, Music and Books. With an increase in listings and sellers being sucked in by great discounts, eBay is more likely hoping to show that the site’s traffic and activity increased during the boycott.

If we reference Alexa traffic data one more time and look at a closer view of the end of January and beginning of February you’ll see yet again another decline. In fact, in the days building up to the planned boycott eBay’s traffic rank has taken a dive. The hard data shows that eBay users upset about the recent changes just may be making an impact on eBay’s bottom line. If that happens, eBay could be forced to address some of the issues in their policy changes for the first time in eBay history.

It doesn’t seem to be a loss for everyone in the online auction world. There are eBay competitors that have sprung up over the years and this time of year seems to be doing wonders for them. A look at numbers released about OnlineAuction.com shows they increased their new sellers by 7,500 within 7 days of eBay’s announced changes. Another competitor called eCrater.com has stated they saw 1,400 new sellers within a few days after eBay’s announcement. While these sites still pail in comparison to eBay’s user-base they are seeing strong growth and are providing refuge for sellers that are fed up. One thing you may find surprising about eBay’s competitors, is one of the biggest differences of all. OnlineAuction.com allows sellers to pay a flat-rate fee to list items on their site, while eCrater.com allows sellers to list all of their items for free. Both are novel ideas in a competitive marketplace that seems to be dominated by the innovator of online auctions, eBay.

Whether the boycott of eBay’s service forces eBay to reconsider some of their policy and fee changes, one thing is clear, websites built around communities are not always in control as much as the owners would like to believe. With Web 2.0 websites growing in popularity and dominating the Internet scene, user’s are gaining more control to let their voices be heard by video, audio and commentary that was once lost in a dark corner on the web.

Original here