net.wars: Greedbay?

by Wendy M Grossman | posted on 18 February 2008

If you log onto ebay.com (not .co.uk or eBay's other international sites) next week, you may find gaping holes.

A number of sellers have pledged to boycott from February 18 to 25 to protest changes eBay is making in listing fees, commissions, some payment requirements, and, probably most contentious, the feedback system.

The short version: sellers will no longer be able to leave feedback about buyers, and eBay will require sellers who are new or have low feedback ratings to use Paypal as a payment option, and will also give their listings less exposure in searches. There will also be penalties for overcharging for postage and handling (a sneaky way of making up for low prices).

Whether these changes are good changes or bad, eBay's feedback system has been broken for a long time, as Jim Griffith comments. The essence of a reputation-based system is holding buyers and sellers accountable for bad behavior. But no one dares leave negative feedback any more for fear of retaliation.

Sellers have reacted angrily to the announced change and some are threatening a strike in which they pull all their items from sale from February 18 to 25. Logically, however, what good do buyer ratings do? The system is inherently unbalanced: buyers choose their sellers but sellers can't discriminate among buyers.

Sellers can't, for example, use the buyer ratings to ring-fence sales. If a buyer fails to pay or rips off a seller by instigating a chargeback after the item has been delivered, the seller's only recourse is through eBay's trust and fraud department. eBay's argument that the change should result in a more accurate reputation system is probably justified.

If it doesn't feel fairly balanced, that's emotion, not logic, based on nostalgia for the early days, when eBay was a democratic site where all users were amateurs who both bought and sold. eBay now is full of businesses and professional sellers, and what the feedback changes make explicit is that over time eBay has become a class system.

Professional sellers (everyone from substantial businesses who also run their own ecommerce sites and probably list on Amazon Marketplace and Google Checkout as well) are in a different league from the casual seller who maybe wants to get rid of that old DVD player and doesn't see why it shouldn't be for a bit of cash. If online discussion forums are 90 percent lurkers and 10 percent posters, it wouldn't be surprising if eBay's user community was 90 percent buyers and 10 percent sellers.

I'm a good example: I've sold two items on eBay, but bought dozens, some of them repeat business with the same crafts people and some one-off purchases. For casual sellers, I do look at sellers' feedback largely to eliminate obvious frauds. I had to stop buying DVDs on eBay at all the site is overrun with Asian counterfeits.

For the professional sellers, however, the more important reputation information lies in recommendations outside of eBay from people interested in the same sorts of things I am.

There are people the changes will hurt, but the big sellers probably won't be among them; do enough volume successfully and a few negative reviews won't hurt you that much. Individuals won't be able to benefit from an established reputation as a reliable buyer when they sell items. Small sellers will have no way of defending themselves publicly if an unreasonable buyer chooses to trash them. (If the buyer doesn't pay at all, of course, sellers can still work to get the user barred from the service.)

Do eBay sellers have, as some are insisting, a real choice? Some, yes, even though the received wisdom for a long time has been in online auctions size of the user base is everything. Some craftspeople have been migrating to Etsy, which is becoming an interesting place to browse. The big sellers generally already sell through multiple channels.

People selling off used DVDs, books, and other media would probably do better listing on Amazon Marketplace, where their items will show up, presumably favourably priced, in the same listing with new copies. It's the flea market crowd the people selling off old tires, strange collectibles, and odd bits of clothing for whom the size of eBay's audience is indispensable.

That is very much eBay's roots, but who wants to move back in with their parents?

Online communities including commercial ones, like eBay all tend to exhibit the same social characteristics. One such is the rule that users hate change. Especially, they hate specific changes that threaten to remove one or more freedoms they're used to. eBay's new CEO is right to say it would be more surprising if people didn't protest, given the community's passionate nature. But plenty of online communities have had userbases just as passionate and did not survive their own arrogance once technology changes created other options. In this battle, eBay's true opponent is Google.

It is Google, now, whose product search puts eBay listings alongside many others, and where people are increasingly likely to start looking for unfamiliar items. And it will be Google that wins if sellers leave eBay en masse, because that's how we will find them in their new homes.