Where is eBay headed?


For the last 5 years, I've worked avidly in the eBay space helping sellers get started, maximize sales and reduce eBay's whopping selling fees. If you're interested in this space, check out Auctionbytes and the articles I've written for Ina.

eBay is synonomous with change. Every year, different fees which I couldn't even explain in a paragraph they are so complex. Every year, changes to the interface which affects how buyers find seller's products. The last change has been the most challenging, but if I were a seller, I would say "dreaded".

eBay's finding 2.0 platform essentially puts products from the most reliable sellers in front of the buyer. Simple right? I call it the Amazon-izing of eBay. Products first, source second. However, on eBay you pay to have that product appear. On Amazon, you don't. And eBay now holds the cards on how you appear through Detailed Seller Ratings (DSR).

DSR's operate like a bell curve. For the top 10% of sellers or higher - those who get perfect marks from buyers across the board - eBay avidly displays their products. For the rest, they are penalized by reduced visibility. The challenge here is that eBay buyers are the web's most difficult customer. Let's take an example. One seller I know charges nothing for shipping. Everything you buy from him on eBay is shipped free. You would expect this seller to have 5 perfect stars on shipping fee, right? How can it get better than free? But no. Perhaps buyers forget and give him 4 stars. Perhaps they confuse him with someone else. Whatever the reason, if this seller's performance is not close to perfect across other ratings, he's in danger of being penalized by eBay.

He pays the same to list products, but does not receive the same benefit. Can you think of any other place on the web where you have to pay for performance not yet received? It reminds me of the old pay per view ad systems.

How long will sellers stick around when they no longer receive the performance they pay for? The system rolls out fully in July. I expect we will see a big decline in sellers (high volume sellers specifically) by February 2009 if not before.