This week Ebay announced several major changes to their platform that will go into effect over the next 5 months. The first change starts February 20th and will affect Ebay fees. The second change comes in March 08 when ebay makes “best match” the default search, which I beleive includes “finding 2.0″. The third change is planned for May 08 when Ebay will restrict sellers mutual feedback privileges.

It is impossible to tell how the overall combination of changes will have affected the majority of Ebay sellers 6 months from now, but some guesses can be made about the impact of each individual change and anyone who is concerned will find many more discussions on the topics on the IMA member forum. The initial opinion of some IMA members is that the fee increases will cause a 0-25% increase in fees. Twelve members have stated their overall fees will decrease. The sellers who estimate a decrease are those with a lower sell through rate (10-40% sell through), and a typical selling price between $1.00 to $25.00. Those hardest hit on fee increases typically have a high sell through rate, and higher average sale price. The Auctionbytes blog has a very good article where numbers show everyone’s fees will increase.

The second major Ebay change will occur in March 08 when all categories default search will be changed to “best match” or “finding 2.0″. Some sellers with low DSRs and a high level of buyer dissatisfaction will begin to place lower in search starting in February. It is impossible to tell how best match will affect sales. I personally saw a drop in sell through from a high of 40% to a low of 5% during the weeks when Ebay was testing the best match algorithm in unrelated categories. I suspect it was due to buyers confusion with the new search, and possible glitches with the overall finding mechanism on Ebay during these tests. My sell through would increase as soon as the search returned to normal. The “best match” algorithm is below:

The third major phase of changes is scheduled to begin in May 08 when Ebay takes away seller’s right to participate fully in “mutual feedback”. Sellers will only have the option to leave positive feedback while buyers will still be able to give negative feedback. This dynamic creates an “Amazon” like atmosphere for feedback. Sellers who sell on both Ebay and Amazon have reported that their feedback on Ebay is 100% positive, but their feedback on Amazon is anywhere from 78% to 98% positive feedback. So the future of 100% positive feedback on ebay looks bleak. Unfortunately, there have been no announcements about whether the powerseller requirement of 98% positive feedback will be changed accordingly, but there are rumours that Ebay will be watching closely and change the requirement if they think it is “needed”.

I tried to find some Amazon sellers feedback to compare, but I couldn’t find the seller feedback displayed anywhere. There is apparently very little emphasis put on feedback for Amazon sellers. Which is unfortunately not true for Ebay. The sellers most susceptible to having this change hurt their business would be those who sell luxury items where buyers need to be able to trust the seller’s reputation before they buy a gold watch, or vintage diamond ring. The sellers least hurt will be those selling a large amount of items with lower selling prices. Buyers don’t care about negatives if the price is right on low dollar items.

There are a multitude of perks being given to powersellers if they keep their 30 day average Detailed Seller Ratings (DSRs) up, but none of those will matter if their overall positive feedback dips below 98%. So it isn’t worth spending the time discussing.

The reason Ebay gives for taking away sellers participation in “mutual feedback” is an increase in sellers leaving buyers negatives after the implementation of DSRs in combination with the buyer dissatisfaction suspensions in April 07. Many sellers suddenly found out that if 5% of their buyers left them negatives/neutrals their selling privileges would be revoked (I say suddenly because it was overnight for many). Ebay representatives told them to approach the buyers and ask for a mutual withdrawal. Unfortunately, most buyers won’t consider a mutual withdrawal unless they also have a negative to remove. Ebay also made neutrals count as negatives without giving sellers any warning. So, a lot of Ebay sellers desparate to save their livelihoods starting leaving negatives for buyers who left negatives/neutrals. Ebay says the number of buyers leaving the site because they got a negative has increased 4x since Apr 07.

Oddly enough, I went through my feedback for the last 90 days and found that the buyers who are no longer registered either were non-paying low feedback buyers with multiple negatives for not paying, and/or buyers with 100% positive feedback whose accounts had been highjacked so many times they felt safer closing their account until they decided to buy again.

Whatever you sell on Ebay, one of the changes listed above is going to affect you. A very good description of the affect on different selling styles is given by Scot Wingo on his blog with comments from some ebay sellers. And another great interview by Ina Steiner can be found on the Auctionbytes blog. Pay particular attention to the question Ina asks at the end about whether Ebay is going to begin offering the same type of customer service Amazon does since the fees charged are now very close.

Jennie

I had the opportunity to go to eBays ecomm program and I want to thank those who were a part of my invitation. And like everyone else, waited patiently for the announcement and I knew my business had to adjust again if I wanted to continue to sell on eBay. As soon as ebay announced the changes that they were going to implement in the next few months, all negative emotions poured out with eBays top sellers. Thoughout the day and evening I listened and observed, the complaints that all sellers had. Speaking to over 50 businesses, only 1 (an IMA member) said the changes would not hurt him. His DSR was so good in shipping that he will receive the 15% rebate on his FVF and this covered his additional fees.

That afternoon there was a Q&A and you can hear the complete session here. Click here to watch video

I am still in DC and sitting in the hotel lobby and had the opportunity to talk to at least 35 stores and asked again, what are you going to do. It was a different attitude and I guess the shock wore off and every seller told me that they have work to do when they get home. And the majority of the sellers said the same thing, communicate with the buyers more.

I feel for the 99cent sellers and when they look at the new changes, their increases are at least 50% higher. I personally witnessed our IMA President go to bat for them and dont quit yet. (I am convinced that the Energizer Bunny is really Steve Grossberg is the pink bunny suit.)

For those that are not 99cent sellers, eBay had no choice. Unfortunately Meg ignored the many problems for many years and the drastic changes had to be made. The good sellers will get through this and to join an organization, like IMA, you have an opportunity to talk to other serious business sellers and guide you through this.

Me? I personally am excited to see the bad sellers not get the top search and if it costs me a little more money, it will come back two fold. I welcome the changes and I thank eBay for FINALLY recognizing the problems and FINALLY taking action.

I know that it was a little unclear on the sellers DSR rating and eBays search. We had the opportunity to catch up with IMA President Steve Grossberg and his comments on Detailed Seller Rating.

An odd thing happened this holiday season on Ebay. I had an buyer that decided the Amazon return policy was much better than my return policy. I have to admit that having 30 days (Amazon’s policy) to return an item is much better than 7 days (my policy), and I did refund my customers money when the item arrived 30 days after we agreed she would return the item. But the incident got me thinking.

Is Amazon setting the standard now for internet buying customer service? Other Ebay sellers have reported that buyers are asking to return items up to 60 days after a sale. Some Amazon sellers are reporting packages being returned from Amazon buyers more than 30 days after the buyer received it.

I have to admit that a year ago I would never have dreamed of asking this question. Is the Amazon return policy going to become the default policy in the internet buyers subconscious? Will buyers hesitate to purchase unless they can expect to get a 30 day return policy?

I think a year ago many Ebay sellers believed Ebay was the only place to sell, and would remain the “main” selling venue. Times have obviously changed. Now Amazon may be setting trends in internet buying that affect sellers who don’t even sell on Amazon.

If you have any stories of how Amazon has affected your sales on Ebay, please post them. I would like to know if other sellers have noticed the same trends I have.

Jennie

written by Lanae

Internet Retailer Magazine recognizes the Internet Merchants Association (IMA) to give reviews in their ‘9th Annual Recognition of Leading Retail Web Sites – Hot 100 Best Retail Web Sites.’

Alongside various retail and e-commerce consulting firms, IMA gave its reviews on a number of the Hot 100 websites. These ranged from technology to gift baskets, and hardware to housewares. Among the Hot 100 are Amazon and CafePress, both of which are quite familiar to many of our members.

Not only was it an honor for the IMA to contribute, but it can also be a learning tool for our members…each one of us could learn something from those that make up the Hot 100. As noted in the magazine it is about knowing your customers, utilizing new concepts, and creating great shopping experiences. Perhaps one day we will see some of our own members there.

The list can be found here… Internet Retailers

IMA announces their second annual seller’s conference

The Internet Merchants Association (IMA) is hosting its second annual conference for internet merchants in Las Vegas March 2008. The conference begins March 03, 2008 and runs through March 05, 2008. This leading industry conference is presented in conjunction with the ASD/AMD Trade Shows.

The opening keynote speaker for this year’s IMA conference is Philipp Justus, Senior Vice President Auctions, eBay Inc.

This industry-leading event will include the who’s who in internet commerce! Google will be presenting effective Adwords campaigns. Ebay and Amazon representatives will be there. Scott Wingo, CEO of Channel Advisor will talk about making comparison shopping engines (CSE) work for you. IMA will have educational sessions on SEO, Branding, Keywords, Front End systems, Back End Systems, Proper Advertising, building customer loyalty and other ways to capture and help grow your internet business.

The ASD/AMD Trade Shows, taking place in Las Vegas from March 2 - March 5, 2008, is the largest, most extensive Gift, Jewelry, Variety, Discount, and General merchandise show in the U.S.! This international show is comprised of three separate shows that together create the ultimate wholesale merchandise marketplace of more than 3,500 companies in 8,000-plus booths exhibiting thousands of products in more than 150 leading merchandise categories.

Early bird registration is open now and is $199.00 for members and $349.00 for non-members good through 12/31/07. For more information and to register for the conference please visit the IMA web site at http://www.imamerchant.org/

About IMA: Founded in November 2006 The Internet Merchants Association (IMA) is a nonprofit (501c6) trade association for companies involved in internet commerce. IMA was founded to provide internet commerce companies with proper knowledge and education as well as best business practices in the ever-changing world of e-commerce. Through discussion and the exchange of ideas, IMA provides a base where companies benefit from the collective knowledge and experience of our membership as a whole.

Steve Grossberg
President
Internet Merchants Association