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February 01 2008
eBay makes big changes
eBay is to make drastic changes to its fee structure and is to get tough on lax sellers
eBay announced at it’s eCommerce Forum that it is lowering fees for listing items, raising minimum selling standards, and offering its best sellers incentives and discounts for the first time in its history. The changes won’t happen overnight but will be rolled out in eBay marketplaces globally.
John Donahoe, the President and CEO-elect of eBay said "Consumers have more choices than ever, and they expect more when they shop online today," adding "We're serious about making eBay easier and safer to shop."
The fee changes, which vary by country, are intended to encourage sellers to list more items and use more pictures in listings, both of which are good for buyers. Starting Feb. 20 in the U.S., eBay is reducing its fees to list items (called "Insertion" fees) by 25 to 50 percent. eBay is balancing that change by increasing the fees it charges when an item is sold (called "Final Value" fees).
The company is also eliminating fees in the U.S. for its Gallery option, which should spur sellers to include more photos of the item for sale, something buyers normally want when they shop.
eBay is also making its minimum standards more stringent for anyone who sells on the site, primarily to discourage behaviour that causes buyer dissatisfaction, such as charging excessive shipping fees or not describing items accurately.
As punishment eBay will begin decreasing search exposure for the listings of sellers who have high rates of customer dissatisfaction, and they will increase search exposure for sellers with the best buyer satisfaction ratings
In addition eBay will begin requiring a safe payment option, such as PayPal or a major credit card, for sellers who have lower rates of customer satisfaction or who sell in categories that have a high number of buyer complaints.
"It is our intention to reward great sellers," Donahoe said. "Sellers that describe items accurately, ship on time, and ship at a fair price will enjoy preferential pricing and discounts on eBay. We think this will significantly improve the buyer experience overall."
It will be interesting to see how this will affect eBay’s media profile. eBay has been getting a lot of bad press recently, particularly from the powerful music lobby who object to secondary ticket selling. The changes maybe too little too late to change the media profile, however the recent financials show eBay is in great health despite the bad publicity and apparently users still think of it as a good place to buy and sell.
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