Merchant group blasts eBay

An influential group of eBay merchants is blasting recent changes in the online marketplace.

According to PESA, merchants who offer free shipping and handling have an average DSR of 4.8 in the shipping charge category. "They're offering free shipping. Why isn't the score a 5.0?" he said. "That's one sign that letting buyers share their opinion on something [factual] results in an inaccurate measurement. Two-tenths of a point in deviation on the DSR score is substantial."

In this case, eBay should automatically award a 5.0 score in shipping costs to merchants who offer free shipping and handling, he said.

One negative consequence PESA has identified is that now many US merchants are opting to reduce or eliminate altogether their international sales. That's because those are more likely to result in lower shipping time scores since they involve longer, more complicated delivery, through no fault of the merchant. At a minimum, eBay should weigh differently shipping time scores of international orders, he said.

"The last thing eBay should want is for sellers to start selling less because of the structure of the DSRs," he said.

Another change PESA says is conceptually good but badly implemented is eBay's rebalancing of fees by generally lowering the upfront charges for listing items and then increasing the sales commissions for items that are sold.

The idea is good because it aligns eBay's success with merchants' success, since eBay's benefit is higher when products are purchased. However, the increase in commissions is generally too high compared with the reduction in listing charges, Garriss contends. It would have been wiser of eBay to wait until concrete benefits from the lower listing fees kicked in before raising commissions, he said.

"It feels like eBay is trying to take too much money out of the marketplace, as compared to investing in it to truly make it as vibrant as it once was," he said.

In its statement, PESA argues that, because the changes have been a fiasco, merchants are giving more priority to other sales channels than to the eBay marketplace, such as their own Web sites, competing marketplaces from rivals such as Amazon and Overstock, and even sales in physical stores.

"Merchants are focusing on other channels at higher rates than we have ever measured in the past. Prime products that used to find their way to eBay are now being diverted to these new 'premier' channels that are reportedly delivering higher margins with greater certainty and decreased overhead," the PESA statement reads.

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