Turmoil at eBay

• By JAMES DERK, Scripps Howard News Service
• editorials and opinion

You don't tug on Superman's cape. You don't make a mess in your own nest. And, most of all, you don't tick off eBay PowerSellers.

Those would be some of the most powerful adages these days. And eBay is learning the last one the hard way. Ever since the auction giant decided to fiddle with its fees and feedback structure this year, it is really feeling the wrath of its largest sellers, some of whom are dropping off the platform.

A May 1 boycott is being organized to protest the latest changes, namely that sellers no longer will be able to leave negative feedback for buyers, and the new fees structure, which reduces the up-front fees for some auctions but increases the back-end percentages for others.

The company says the changes, which include free gallery pictures and discounts for PowerSellers, overcome the disadvantages. It says the changes in the heralded feedback process are especially overdue.

Bill Cobb, president of eBay North America, laid out the rationale for the move in a forum post. "Overall, the current feedback system isn't where it should be," he said. "Today, the biggest issue with the system is that buyers are more afraid than ever to leave honest, accurate feedback because of the threat of retaliation. In fact, when buyers have a bad experience on eBay, the final straw for many of them is getting a negative feedback, especially of a retaliatory nature."

Sellers flooded eBay forums with complaints, most too graphic to print here, complaining there are tons of terrible buyers on the platform who deserve the negative feedback they get, especially if they pay with a bad check or cancel a PayPal transaction after the merchandise has shipped (yes, it can be done). And they argue that a one-sided discussion -- primarily, that buyers can bash sellers but not vice versa -- is patently unfair.

The company is facing rough waters in general in the wake of the changes. Longtime CEO Meg Whitman just quit and has joined the campaign of presumed Republican presidential nominee John McCain. Its stock is in the tank. And its 2008 outlook is not great. And PowerSellers are trying to move to competing platforms that offer more friendly climates, including Online Auction (www.ola.com) and Etsy (www.etsy.com) for things handmade.

And now there is a May 1 boycott that is gaining momentum. Will it work? It's no secret that without its largest sellers eBay is doomed financially. I would hope that the new CEO is listening to the racket in the marketplace, taking stock of the new upstarts and realizing the PR blunder if nothing else.

It would not be the first time a big company would admit a mistake and move on. Maybe eBay will do it sooner rather than later.

(James Derk is owner of CyberDads, a computer-repair firm, and tech columnist for Scripps Howard News Service. His e-mail address is jim(at)cyberdads.com.)

(with comments area)