For 2008 eBay has announced a series of policy and fee structure changes, slated to go into effect later this month, that have the eBay seller community up in arms. Involved are radical changes to the fee structure, feedback system, and other areas of eBay policy and functionality. Some of the changes include:
- A decrease in insertion (listing) fees
- A larger increase in final value (completed sale) fees
- Fee discounts for PowerSeller program members with superior feedback
- An end to sellers’ ability to leave negative feedback for buyers
- More restrictive (in some cases) PayPal policies for sellers
- Removal of buyers’ negative feedback if/when they become suspended
(The full set of announced changes can be found here.)
The eBay seller community has responded to these changes with more than passing anger, and there are many and varied articles discussing the changes that have been published since the announcement). Whatever the reaction, it is possible to draw a few obvious conclusions from this set of changes—conclusions about who benefits and who does not.
High-Volume/High-Margin PowerSellers Benefit
eBay touts the insertion fee decreases as a rate cut for sellers, but for many sellers these cuts will be more than offset by the increases in final value (completed sale) fees. Sellers who are actually getting a cut, therefore, are sellers with a very high listing volume and a good to great per-item profit margin, but a somewhat lower actual sales volume—in short, the sellers of commodity goods that can be seen posting 100 or 1,000 identical listings for commodity items knowing that only a percentage of them will sell, but that those that do will recoup the costs for the other listings.These are in fact one of the groups of sellers most likely to be in the PowerSeller program and most likely to have reasonably high feedback, since they engage in many simple, medium-to-low value transactions repeatedly, and thus have a very standardized business process in place and transactions that do manage to go wrong are not terribly high in value—and thus more easily resolved without buyer or seller needing to carry the dispute to any higher authority.
These are also the sellers least likely, due to the massive volume of their sales, to leave any feedback for buyers (apart from the most standardized automatic positive to paying buyers), and thus to least feel the sting that comes from being unable to rate buyers with whom they have had unsatisfactory dealings.
eBay has clearly gone through the books and decided that it is in their best interest to woo a very specific class of seller and selling on the site—the high volume commodity seller who lists many similar items in multiple individual auction listings.
Of course the problem in this case, as always, is not who does benefit, but the concerns of those who don't. Read on to find out who isn't going to benefit from this latest round of changes.
