eBay to Create a Quality Score

Jan 29th

eBay announced they are planning on launching something like a quality score:

John Donahoe will set out a plan to reward the company's best sellers with sales incentives and priority ranking in search results for auction items.

"Sellers that describe items accurately, ship on time, and ship at a fair price will enjoy preferential pricing and discounts on eBay," [John] Donahoe said in prepared remarks. "We're serious about making eBay easier and safer to shop."

On February 20 the changes will start taking place. Depending on how serious eBay is about this change, many eBay based businesses may die. But they also plan on lowering initial listing fees and trying to get more commission when items sell, which could lead to more junk listings as the opportunity cost is lower. If you are one of a few legit sellers in a market saturated with scams perhaps this helps increase margins, but eBay will have a hard time bring back buyers who got scammed in the past or sellers who were sick of years of rate increases.

It is remarkable that eBay has been around over a decade and are just finally getting around to making these kinds of changes. If they didn't have a near monopoly there is no way they could have waited this long.

I understand why some people sell on eBay, but for anyone who has been doing it for a long time I wonder why they don't create a site and sell direct. Being stuck in someone else's network where quality scores can make you irrelevant is a risky way to make a living.

Published: January 29, 2008

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Comments

January 29, 2008 - 11:56am

Personally, I would use eBay a lot more if they put an end to last second ninja bidding, perhaps they could solve this by having a last minute bid extension - ie. someone bids in the last 10s and the auction then extends for another 10mins.

Last second Ninja bidding, the fact that they pull your auction if it contains a link back to your actual site/shop to sell the product, or, if your site sells at cheaper than the eBay auction/buy-it-now price (which lets face it everyone does to cover the eBay fees) has meant my eBay shop/selling has reduced year on year.

Graeme.

January 29, 2008 - 12:22pm

I have worked for years with eBay merchants and it never ceased to amaze me that the ones who paid eBay the most in fees, did the best job of selling and services the customers and made eBay valuable - they NEVER got rewarded or got treated any better than the goofball who did a crappy job.

NEVER.

It has turned into a classic lemon market that you learned about in B school and it's really too bad.

February 1, 2008 - 7:36am

Don't think of Ebay as an auction house. It's not - not really.

Years of monopoly and a flawed mindset (the monopoly slowly corroded Ebay, because it got greedy and lazy and unimaginative) means that commodity sellers scrape by on ever thinner margins. Fair enough - that's what happens to commodities. But Ebay could have given these same commodity sellers a chance to create brands. Those same deadly dull templates, the restrictive user names (not allowed to be widgets.com) and the format of the listings (where's the chance to create logos in the listings? Why does it COST to have a gallery photo when this is one of the main ways of differentiating yourself?) means that all commodity items sink imperceptibly lower to the point where price is the only differentiation.

It must be disheartening being a commodity seller, and the problem is that nearly all items on Ebay are heading that way.

Ebay updated its image a year or so (?) ago but what a wasted opportunity! An opportunity that took 5? 10? years to be realised. What's the main difference between today's Ebay and the Ebay of the past? A slightly Web 2.0 feel to the graphics is all.

Whatever back end stuff has been created has probably been for Ebay's benefit.

Ebay's a frightened and unimaginative entity, banning Google Checkout, afraid to innovate (hence the salami slice price increases to sellers, though recently they've given the impression of having a change of heart - price increases are an easy way to increase revenue, rather than having to innovate and take risks) and wasteful of resources (Skype).

Ok, so why isn't Ebay an auction house?

If you're a commodity seller, think of Ebay as the biggest and cheapest PPC (Editted - PPA, Pay Per Action) engine on the internet (well, perhaps not the biggest). You don't pay for clickthroughs - you only pay for sales. Each sale pays for its own advertising so that this PPA engine / lead generation engin is in fact free.

The point is that if you can't compete on commodity margins, then don't. Rethink the mindset (from necessity) and aim for long-term relationships off-site (that is, off Ebay). Set up your own website, and direct traffic to it using Ebay. After all, you have direct communication with a hungry customer (you send them your goods and your brochure and you over-deliver with a little gift) and you know their address (if they give you permission to send them special offers). What could be more perfect than that?

February 1, 2008 - 6:23am

Nice comment Richard.

Looks like eBay is going to get worse before it gets better. From a Craigslist post:

Sellers will no longer be able leave negatives or neutrals for buyers. Yes, you read that right. In addition, EBay may decide hold your funds for 21 days until the buyer leaves you positive feedback. Oh, and final value fees will almost double.

So many opportunities to remove friction and add value in the middle, and in many ways they chose to ignore it.

Maybe there will be a new auction startup marketplace soon...or maybe that is what the web as a whole is becoming.

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