eBay Sellers' Boycott Jeopardizes New CEO Donahoe's Tenure

amp160eBay is in the midst of a perfect storm As John Donahoe prepares to succeed Meg Whitman as CEO as she steps down at the end of this month the company settled a patent dispute with MercExchange for its Buy It Now feature and then provided investor guidance that its heady days of thirty percent annual growth are behind it But these are mundane doings compared to a growing eBay seller boycott an insurgency that could never have taken hold during the heyday of Web 10 On February 19 eBay sellers announced a one week boycott against the marketplace Based on its perceived success it was extended another week Organizers are now working to build a statebystate infrastructure targeting an extended May 1 strike What follows is the stillevolving object lesson about marketplaces customer relationships and transparencyThis past January eBay unveiled a litany of new policies To the relief of sellers who have a low sellthrough and need to relist merchandise repeatedly it lowered listing fees To the pique of many more it indicated that it was raising its Final Value Fee its commission at sale end from 525 to 875 percent Small and PowerSellers alike could immediately see how this would narrow their marginsIn the interests of full disclosure I should state my relationship to eBay at this juncture I have been both a buyer and seller alias lowbidder since 1999 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 What makes the eBay marketplace unique is the buyer and seller relationship From wearing the hats of buyer seller and mediator I learned that trust is the fuel that runs eBay That it in turn is facilitated by a ratings system that is based on mutual feedback Therefore it is unsurprising that it is a substantive change to feedback that truly drew the ire or sellers and buyers alike Effective May 2008 feedback will no longer be mutual only buyers will be able to rate and leave commentseBay spokesperson Usher Lieberman spoke to JackMyers Media Business Report asserting that the need for modifying feedback quotcame very clearly from research we did with buyers We39ve been analyzing what was getting in the way with buyers repeating business in our goal to increase the level of activity on eBay We found that the number one reason cited that buyers have leaving eBay is unwarranted retaliatory negative feedbackquotFor the initiated an explanation Nerd that I am I am the winner bidder of an Atari console But my Pongenabler is DOA The seller and I communicate via email and he reminds me that the condition was stated quotAs Isquot I counter that quotAs Isquot should mean working Since the seller has a Final Sale policy my one outlet is to leave him negative feedback As eBay has grown exponentially ethicallychallenged or simply overwhelmed sellers are not only exercising their right to quotNegquot me in return but are using the opportunity to perform character assassination so that no one will want to sell to me ever again As these incidental examples have become more frequent not only has the tone on eBay changed but the ratings system has ceased to balance Buyers are afraid to leave honest feedback and sellers feel that they are expected to jump through fire not merely to offer the goods but to provide such perks as overnight free shipping lest they be Negged Certainly eBay is to be commended for addressing this Code Red even founder Omidyar has said that an overhaul is quotoverduequot but their process and consequent communication is what is angering PowerSellers mostAsked how opinions were solicited from the community Lieberman indicates that there is a range of means including a quotVoicesquot forum where a sampling of a revolving 4050 participants is taken He elaborates quotwe present them with new ideas concepts policy changes That39s part of our RampampD effort as well as usability testing inhome visits where we see how folks are interacting in natural surroundings as well as on campusquot When asked if these ongoing reports are then shared with the community he sounds puzzled quotNo they aren39t It works because of confidentialityquot I observe that no confidentiality need be breached for results to be shared with buyers and sellers No responseLieberman admits to me and I ask him to reconfirm his statement that quotAll of the changes are really aimed at improving the buyer experiencequot While on face this sounds thoughtful it reveals the crux of the eBay39s problem Admittedly it is walking a tightrope how to reassure buyers that eBay is a welcoming environment even though they are only a facilitator not the host without making conditions onerous for longterm sellers That is where its new policy failsAs an eBay39er myself I have relied on the feedback system I have steered clear of sellers with questionable ratings and comments often offering goods that are too good to be true and have declined to sell to buyers who have been labeled quotnonpaying biddersquot The latter tool will be lost to sellers going forward offering no check and balance against untrustworthy buyerseBay claims that it will be rolling out tools that protect sellers PowerSellers have launched RottenBidderscom on their own Going forward based on these ratings some sellers might be entitled to performancebased discounts while others might be subject to a twentyone day freeze of their monies on PayPal owned by eBay The devil39sinthedetails issue here is that there is a disconnect between what ratings a range of 15 mean A buyer is educated that quot4quot is to be given for a job well done while eBay expects sellers to achieve close to a quot5quot for these discounts When I query Lieberman about the PayPal freeze he offers that quoteBay can pinpoint high instances of fraud which ought to be a benefit to both buyer and seller We offer some of the best terms for established sellers with a positive track record on eBay They will not impacted by this at allquotWhat goes unaddressed is that eBay39s ownership of PayPal and the concurrent fees it charges is an incentive to arbitrarily place transactions in escrow And it39s the ad hoc nature of policy and lack of transparency that made the conditions fertile for talk of a strikeTOMORROW eBay Sellers39 Boycott Forces Company to Rethink Consumer Control Model

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eBay Sellers' Boycott Jeopardizes New CEO Donahoe's Tenure

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