Is ebay dead?

No I don’t mean literally! I am actually talking about trading on ebay as a business.

Owning a business that has been part of the ebay community for the last 6 years, I have seen many ‘system’ changes and I am well versed on the whole ebay experience, from the good old days to the present.  So here is my take on things.

The changes of the last few years have totally benefited the buyer and not the seller. Ebay have made it extremely difficult for anyone to make a living from selling on ebay, let alone a decent profit.  Add this to the current economic downturn  and it is a recipe for disaster. The biggest and worst of changes in my opinion is removing the option for sellers to leave neg or neutral feedback against a bad buyer, thus not enabling the seller to leave a warning for other sellers about a troublesome buyer.  Also, having to  include Paypal as a mandatory payment method and not allowing cash (in the US) has turned droves of sellers away.

The final kick in the teeth came with the recent changes to the power seller system. Some sellers have worked hard over several years to increase volumes and have a consistently good solid record. However, with the introduction of detailed seller ratings, all that is needed is one or two customers (out of hundreds) to give you a low rating which will knock you feedback down a few points and which will not entitle you to be a top rated seller. In case you do not know, top rated sellers not only get a ‘badge’ next to their listings, but also get priority search placements within ebay’s listing results when customers do an un-filtered initial search.

So, to cut a long story short (I could go on about this subject for a long time), these ebay system changes have not helped businesses in these turbulent times, , just when a business needs all the help it can get. You may say ‘good’, it is the fault of the seller/business, for not maintaining a certain standard, but it goes a lot deeper than that. Most of the power sellers affected, were already excellent, honest, visible, upright business sellers, who far surpassed most other e-commerce websites with their service anyway, because of the original feedback system and Paypal chargeback facility (have you ever purchased something from a big brand e-commerce store, only the be told that the item is out of stock 2 weeks after you ordered it, for example. This rarely happens on ebay). How many other e-commerce websites do you know that would send out an order same day or within 24 hours, without charging you a premium for this service? A majority of sellers on ebay do this everyday.

Finally, it is not surprising that ebay, as a standalone e-commerce business, has been overtaken by Amazon, and that profits have not reached expectations. Small businesses are leaving ebay by the droves or scaling down their operations on ebay in favor of Amazon. The only things that are propping up the ebay group are Skype and Paypal. So on paper, it looks OK for them. However, for ebay to survive and thrive as a major Internet force in the coming years, they will need to treat their ‘customers’, the core  businesses and sellers that make them money, a lot better than they do today.

If you have any comments on the above subject, agreeing or disagreeing, I would love to hear from you. Just reply below.

Tags: business, ebay, ecommerce, power seller, profit, selling

This entry was posted on January 21, 2010 at 10:18 am and is filed under Entrepreneur. You can follow any responses to this entry through the RSS 2.0 feed.