Dishing Out Feedback About eBay's New Pricing Structure and Policy Changes

Published 2/11/08 (Modified 3/9/11)
By MoneyBlueBook

If there's one group of zealots you never want to upset, it's the eBay sellers. Ever since eBay announced several key changes to its pricing and feedback policies over a week ago, eBay sellers have been flipping out and storming the discussion forums to express their outrage over the impending doom and gloom. A great number of them have become so upset that they've banded together to plot a futile boycott of eBay's auction services around the February 20, 2008 launch date to protest the new fee hikes and feedback policy changes.

Here is an overview of the key controversial eBay pricing and system changes that have sparked such emotional reactions as well as my own thoughts on the matter. You can view the actual eBay price structure changes (here).

1) Listing Prices Will Be Reduced But Final Value Fees Will Be Increased
The new eBay pricing changes will cause up front listing costs such as Insertion Fees and Fixed Price Listings to be reduced. This upfront listing fee reduction is to encourage more listings since eBay auctions have been stagnant for years now as auction interest has waned. Although it used to come at a small cost, eBay now plans to make Gallery picture listing free - a nice free addition that will save a few cents and dollars for some, but it's basically a trivial bonus. It's nothing that will greatly benefit eBay sellers, but with the way eBay has been cleverly marketing the changes by plastering the "lower fee!" mantra everywhere on its fee changes announcement, it's clear eBay wants to make the listing price reductions a big deal. But I don't think they are - the savings are paltry and unsubstantial.

Of course, as a profit driven business giant, eBay is not a charity, so with one price drop it's obviously bound to raise prices elsewhere. To counter the listing fee reduction, eBay plans to jack up the Final Value Fees. Unfortunately, the increase in Final Value Fees will probably become the biggest profit killer for many eBay sellers - dramatically cutting into their profit margins. Insertion prices were never all that high to begin with so reducing them isn't providing much of a cost savings for sellers. It's always been the Final Value Fees that have chomped into the bulk of seller profits.

2) Sellers Will No Longer Be Able To Leave Negative Feedback For Buyers
Another substantial change in eBay's new feedback policy is that sellers will no longer be able to post negative feedback or comment about their buyers in the future. The original purpose of the innovative eBay feedback system was to retain a history and honest record of member experiences for the future benefit of all prospective buyers and sellers. However, in the last few years, the system has deteriorated and become broken, because most buyers have grown afraid of leaving honest and accurate feedback for the seller due to the fear of negative feedback retaliation.

Even as an occasional eBay seller, I can attest to the existence of negative feedback retaliation. After the completion of every auction, as the seller, I would always solicit the buyer's feedback submission before I would submit my own. This was to preserve my right and ability to retaliate with negative feedback if the buyer arbitrarily or unreasonably posted negative comments to my seller's profile. Obviously without the ability to submit negative comments for the buyer, my options as a seller would become more limited as I would become subject to the whims and demands of unscrupulous buyers. To remedy this problem, eBay would need to do a better job of policing seller and buyer complaints. To protect sellers, eBay has indicated that it plans to regulate the system better against buyers having badly and has indicated plans to retroactively remove all neutral and negative feedback left by a particular buyer should the buyer's account ever be suspended for eBay program violations.

As an eBay buyer, I wholeheartedly applaud the feedback changes. While I don't agree with the pricing changes, I think the feedback policy modifications were sorely needed and will go a long way in improving buyer confidence in the accuracy of future eBay feedback ratings.

3) eBay Powersellers Will Become More Powerful
Under the new eBay policy changes, the most reliable and trustworthy Powersellers will enjoy new perks including greater Final Value listing price discounts up to nearly 15% off depending on their additional detailed seller ratings. Also, eBay intends to offer those high volume sellers that maintain an excellent customer rating greater exposure among the auction listings by providing them higher visibility under its Best Match search results. Of course I think this greater exposure for the most trusted sellers will help improve overall buyer experience by rewarding good sellers and encouraging good behavior. This one is actually a good improvement.

Final Thoughts About the eBay Policy Changes and Threats Of Boycott

Despite complaints about the new policy changes, the truth of the matter is, most eBay sellers can't afford to lose their eBay business traffic. Any boycott would hurt the individual strikers more than it would ever hurt a multi billion dollar company like eBay. While there is no other online auction service that can even come close to the reach and traffic scale that eBay can provide, there are a few growing and viable alternatives out there like Amazon and Craigslist, that some dissatisfied eBayer sellers are starting to turn to. Amazon has indeed enjoyed great success lately despite its more regulated selling policies. Whether this continued success will be at the perpetual expense of eBay remains to be seen.