eBay Defies Boycott Threats

12.30pm BST
Auction site eBay defies boycott threats
John Sterlicchi guardian.co.uk,
Friday April 25 2008
Article history - This article was first published on guardian.co.uk on Friday April 25 2008. It was last updated at 14:27 on April 25 2008.

Online auction giant eBay is standing firm against sellers who have scheduled a global boycott of the site on May 1 over policy changes they say hurt their bottom lines as well as protect scamming buyers.

The sellers have a long list of complaints, ranging from the fact they can no longer give buyers negative feedback, to eBay putting a 21-day hold on some PayPal payments and increases in the fees that are paid as a percentage of the final sales price.

Sellers in Australia are also upset that buyers will soon be able to use only PayPal for purchases. If that switch works well, the move could be duplicated in bigger markets.

Many of the changes take place on May 1 and on that day an unknown number of eBay sellers, believed to be in the hundreds, have pledged not to list, buy or peruse any of eBay's listings. Postings on websites such as MySpace and Delphiforums are asking sellers to join the boycott.

For its part, eBay is holding firm on the changes. Its spokesperson, Usher Lieberman, told guardian.co.uk there is no place on eBay for sellers who do not give buyers exceptional customer service and the "vocal minority' who are unhappy "will be routed off" the site. "We have set the bar high," he admitted.

The company's president of global marketplace operations, Lorrie Norrington, said in a speech to sellers this week that eBay was all about improving the buyer experience.

"If you cannot, or will not, change business practices to provide a great customer experience, then eBay is not for you. As I said before, sellers who do not make customer service a priority make it difficult for everyone and are not welcome on eBay," reported AuctionBytes.com.

Sellers now pay fees based on detailed seller ratings left by buyers, and Norrington did say the company had tweaked the rules a little so that feedback by unresponsive or suspended buyers wouldn't count.

Earlier in the week, John Donahoe, who took over as eBay's chief executive last month, said on his blog: "Put simply, we will make more of our money when sellers are successful. The seller dashboard that we're rolling out in May is in direct response to that."

It is clear there are still masses of sellers who are sticking with eBay. Citigroup Global Markets this week issued a report saying US listings for the quarter to date are up 23% over last year. UK listings are up 21% and Germany's are up a massive 45%. Pricing promotions no doubt played a part, however.

Another indication that all is not gloom and doom is a posting on eBay's blogs by Jim Griffith, the dean of eBay education, who recently asked sellers for their success stories. "I was not prepared for the sheer number of stories or the array of hardships conquered they contained," he wrote this week. "So many of you have weathered such extreme difficulties and have overcome them, with help from a little opportunity provided by eBay and a whole lot of dedication and passion for believing in yourselves, in spite of the odds."

Yet there is no doubt that some sellers are jumping ship and going to a dozen or so alternative sites such as ebid.net and OnlineAuction, where founder and CEO Chris Fain says registrations have risen to 100,000 in the last few months. He expects them to reach one million this year; eBay has 250 million registrations.

The privately-funded company has signed on for a TV advertising campaign in the US, and Fain says he has received more than 300 emails from disgruntled eBay sellers who, he says, view his site as a serious competitor to eBay.

"People have built their internet future on a company that has made very unwise decisions in the past several months and now people are done. They can't trust the decisions that are being made by the management at eBay," said Fain, who added that he had sold more than $5m (£2.5m) worth of goods on both eBay and OnlineAuction.

Instead of the eBay model of sellers paying ad hoc fees based on listings, sales price and feedback, OnlineAuction sellers pay a monthly membership fee. "Sellers are going to know exactly what their outgoings are so they also know what their profits can be," he said.

One low-volume seller of military memorabilia said he had switched to OnlineAuction after seeing that 35% of his gross sales went in eBay and PayPal fees.

An independent internet analyst, Greg Sterling, says that eBay has been hit by these type of boycotts several times in the past. The boycotts "have in general turned out to be less potent than hoped for by the organisers. But it is a reflection of people who are disgruntled and dissatisfied with change and the degree on which they have come to rely on eBay as an income source for their level of investment."

The company announced recently a stronger-than-expected first quarter earnings, reporting $2.19bn in revenue, a 24% increase over the first quarter of 2007. Net income also rose 22% to $562m.
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