eBay Sellers' Boycott Forces Company to Rethink Consumer Control Model

By The Myers Report Archives
Cover image for  article: eBay Sellers' Boycott Forces Company to Rethink Consumer Control Model

Second in a Two-Part Series on the Strike Against eBay by Marketplace Sellers. Click to Read Part One.

 

eBay is no stranger to strikes. There have been a handful of boycotts since the late '90s, but to little effect. First of all, the seller community itself is far from a monolith. Many long-term PowerSellers who have been able to become full-time eBay'ers (close to a half-million in the U.S. alone) believe that they primarily "pay eBay for the traffic" and that eBay is a publicity tool first and foremost. For them there was no alternative but to make due.

But in the blink of an eye, times have changed. In the last year we have numerous examples of consumer uprisings that would have been unthinkable five years go: Sony backed down after its buyers learned of the "root kit" it installed on its CDs; Apple began selling replacement batteries for its iPod after its customers caterwauled; Diggreversed its position on publishing the encryption code to HD DVD software - stating that it'd rather be sued into oblivion by the AACS-LA than defy its base; Facebook backpedaled on its Beacon launch after its community squawked over privacy issues. NPR commentator Bob Garfield's Comcast Must Die blog is an example of individuals airing their beefs online. Even Wal-Mart has sanctioned a candid blog fronted by their staffers, who diss Vistaand praise Elmo.

What does this have to do with eBay? Everything. An eBay seller insurgency that could never have taken hold during the heyday of Web 1.0 was launched on February 19 as a one-week boycott of eBay sellers. Based on its perceived success it was extended another week. Organizers are now working to build a state-by-state infrastructure targeting an extended May 1 strike against the marketplace.

The tools that allowed the public leverage against Sony, Apple, Digg, and Facebook included YouTube, MySpace, Facebook, and blogs. These videos, chats, and postings were then picked up my mainstream media, from The New York Times to CNN. Faced with a public relations nightmare, these corporations felt that they had no choice to reconsider their policy. In this boycott, Web 2.0 communications platforms are not only being used as a megaphone, but to organize. Incoming CEO John Donahoe struck the wrong note in declaring small volume sellers as "noise," an epithet in the ears of sellers, many of whom are simultaneously buyers.

Using Blogger, Delphi's forums, Flickr, and yes - even within eBay's Seller Center, irate sellers discuss media strategy at a level of sophistication that would make Carville and Matalin blush. They have asked and received pledges from their first 1,000 PowerSellers to start their alternative to eBay and to press for another strike, aptly, on May 1st -- International Workers' Day. One YouTube strike video has been seen over 150,000 times; it is one of dozens uploaded by angry sellers.

While USAToday published some listings data from analyst Mike Medved, assessing that volume had fallen some 13 percent during the first week of the February strike, eBay spokesperson Usher Lieberman maintains "They have their numbers wrong. Let's just say at worst the traffic was static." What does Medved himself think? "They do show a significant drop (from high) in auction counts. The high, though, was there because of a promotion that eBay was running." Strikers believe that these promotions, as well as "test listings" allowed eBay to pad their results during this boycott." Medved is quick to brush off Lieberman: "The numbers I track come from eBay's web site itself. I just look at the category pages (example: http://listings.ebay.com/_W0QQfromZR4QQsacatZ20081QQsocmdZListingItemList , take the number shown at the top of the list of auctions for that category, and add it all up across all categories. The data cannot be 'wrong.'"

AuctionBytes describes itself as the Independent Trade Publication for Online Merchants. Ina and David Steiner head the website and have been tracking the boycott closely. While Ina tends to believe that the drop in listings was overstated by USAToday, she points out that "from a PR standpoint, sellers have certainly got the media to pay attention." Five years ago, eBay was the only game in town. In addition to the impetus to start a new marketplace, the following entities are vying for attention: Gmarket, UBid, Blujay, MyStore, Wagglepop, eCrater, USiff, Bidville, iOffer, eBid, and OnlineAuction. Overstock.com has been aggressively recruiting eBay's Powersellers offering lifetime no-fee listings, while Amazon -- with its no nonsense secondary marketplace -- is growing leaps and bounds. eBay's changes, if they are not modified, will definitely move the focus of the marketplace from collectibles to commodities.

I know I'm taxing eBay spokesperson Lieberman, that it's above his pay grade to re-imagine how a marketplace must evolve in the time of social networks and transparency. But he's a good sport and tries to tackle my questions: "We have to take input from our community but we have to also manage our policies. We have to manage our policies with the input of our community but we also have to act to preserve the health of our marketplace. Not everything we do is going to be popular with all of our community. It simply can't be in our scale. We have to do things that benefit the overall health of the marketplace." With sincerity he offers, "I think that we do reflect our community and we do take a lot of their input in all of our decisions. And we don't take any of them lightly." This point, however, is subjective. Policy-making within eBay is still command-control, despite the fact that not only its buyers, but its sellers, are its customers.

eBay has a credo, one that it might be well-served to revisit:

- We believe people are basically good.

- We believe everyone has something to contribute.

- We believe that an honest, open environment can bring out the best in people.

- We recognize and respect everyone as a unique individual.

- We encourage you to treat others the way you want to be treated.

While eBay occupies a niche in the e-commerce ecosystem it anticipates how the mainstream consumer will evolve and the centrality of trust. Whatever the eBay boycott outcome, it underlines the delicate balance between creator and consumer. First you cede control over content to the consumer. Soon they're going to want to look at your books… sit in your board meetings.

How would you respond? Post your comments below (registration required at JackMyers.com)

Author Jerry Weinstein has had a relationship with eBay as both a buyer and seller (alias: low-bidder) since 1999. Jerry comments: "Like many eBayers I am proud, even protective, of my 100% rating. For a period of close to three years I mediated online disputes for SquareTrade, the dispute resolution firm retained by eBay. At first blush these relationships might suggest bias, but I offer that my experience provides me with insight into all elements of the triad -- buyer, seller, and eBay itself. By the nature of my SquareTrade work I dealt with some hairy issues of mistrust and fraud, but overwhelmingly the conflicts were not around deception, but rather simple miscommunication."

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