With thousands of eBay’s most active sellers converging on its eBay Live convention in Chicago, the embattled online flea market is trying to give both sellers and buyers a little more to win back their loyalty.
The key problem with eBay is that the value of what it offers has not kept up with the price it charges sellers. Between the fees to list items on eBay — essentially advertising — and the PayPal transaction fees, eBay often charges about 13 percent of each transaction.
Sellers can pay a tad more, about 15 percent, to sell items through Amazon.com’s Marketplace service, where they get a little more protection against fraud and a site that arguably offers a better experience for their buyers. Or they can set up their own Web site and buy advertising and transaction services a la carte — an ever-more-effective option as people increasingly shop through search engines.
EBay has already cut some fees to try to address sellers’ frustrations.
At the conference, eBay made a series of announcements that get at other issues of value, for both sellers and buyers.
For sellers, it is addressing one of the most obnoxious issues: chargebacks. That’s when a buyer tells a credit card company that the goods never arrived or were not as specified. Credit card companies generally side with the buyers in those situations and reverse the payment made to the seller. EBay said it will absorb those chargebacks in cases when there was fraud — such as a credit card used without authorization — or if a shipment was not received, even on many international shipments. Until now, sellers were protected against chargebacks only in the United States, Canada, and the United Kingdom, and they were limited to $5,000 a year in chargeback protection.
For consumers, eBay is also promising to refund the money to any buyer who doesn’t receive the item purchased as described. The new protections for both buyers and sellers only apply if the purchase is made using PayPal. The previous version of eBay’s buyer protection plan offered coverage of up to $200 for most items and up to $2,000 for items purchased from eBay’s most established merchants. The company says it has enough experience with fraud control systems to make the cost of these changes manageable.
These days, many consumers associate eBay with fraud and scams as much as they did with unique items and bargains a few years ago. So I suspect the ability to advertise a no-strings-attached guarantee may be very helpful.
In another move that could make both buyers and sellers happier, the company said it would cut fees for any PowerSeller — the most active sellers — with a customer feedback rating of 4.9 on a 5 point scale. Right now that amounts to 16 percent of all PowerSellers, and it offers an incentive for more of them to improve their customer service. (It also should help reduce shipping fees, which are among the biggest consumer complaints about shopping on eBay.)
EBay is continuing to move away from its tradition of offering a level playing field for both big and small sellers. It said it is open to negotiating fees with companies that sell more than $500,000 a month on its site and who have excellent feedback scores from customers. Smaller sellers not surprisingly complained.
Are these price cuts for the top sellers and improved benefits for all enough to get eBay’s groove back? They do start to address some of the benefits that Amazon has offered. But there are signs that eBay isn’t done trying to improve the perceived value of its site. Ina Steiner, editor of AuctionBytes, reports that eBay is sending signals that it will cut fees for all sellers before the big holiday selling season this year. Stephanie Tilenius, the manager of ebay’s North American marketplace, told Ms. Steiner, “We want to be the most price competitive marketplace on the Web.”
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