Frustrations for eBay Sellers

With the economy in the situation that it’s been for the past 2 or 3 quarters I have been paying close attention to eBay.  My reasoning is simple, people have not been able to put back money this past year like they have in previous years due to high gas prices, rising mortgages, and a host of other reasons.

With this theory in mind going into the biggest shopping season of the year, I can’t help but believe that buyers are going to hit the web searching for the best deals out there.   eBay has become known to the web community as the one stop shop for everything under the sun with the most highly discounted prices.

I look for companies that are heavy discounted online retailers like eBay, overstock.com, and buy.com to do very well this year with others retail giants like Wal-Mart, Target, and others will see a drop in their 4th quarter sales.  There you go, you heard it here first.

With this theory in mind I thought it would be beneficial to repost an article I ran across from Chris Crum of Webproworld about eBay’s top 10 issues according to their sellers.  It’s no secret that eBay has implemented a lot of changes over the past year or so, while some have been good, others have been unpopular with the eBay seller community.

An Extensive Look at the Peeves

At the beginning of the year, eBay announced some changes it was bringing in with its new CEO John Donahoe. The changes spoke of things like “Detailed Seller Ratings (DSR)” and “discounts for sellers.” To some, the changes didn’t sound like anything to be concerned about, but some saw  through the plan and noticed other phrases in there, like “removal of bad feedback for buyers” and saw the potential for smaller businesses to be shut out. This is a notion we are seeing proven accurate months later.

BusinessWeek took a look at some real-world examples of businesses being affected by eBay’s policy changes and the frustrations that have plagued sellers. WebProNews has covered such frustrations in the past as well (that also includes payment policy changes and a boycott of the site by sellers). After scouring the Internet, reading various articles and comments, and even contacting some sellers first-hand, I have put together the following list of the top ten things that sellers are frustrated with about eBay:

1. Management
2. Feedback Policy
3. Small Businesses Get Shut Out
4. Lack of Communication
5. Payment Policies
6. Fees/Lack of Profitability
7. Unwarranted Account Suspensions
8. The Buyers Themselves
9. Glitches
10. Lack of Innovation

It’s hard to truly give an accurate ranking of these problems in terms of significance, and technically there is a fair amount of overlap with issues under each category. It suffices o say that they are each significant. Sellers have spoken, and these are the issues they have with eBay.

1. Management
I’m going to place management above all because, ultimately, it is where the rest of the frustrations stem from. Many of the negative comments I have read (and about 98% of those have been negative) have pointed the finger squarely at eBay CEO John Donahoe who took office shortly before these changes came about. Some noted a significant decrease in stock since he stepped in as well. In fact, a BusinessWeek reader even pointed to a petition that has been created, calling for Donahoe’s termination.

2. Feedback Policy
This is really the one that is getting most eBay sellers fired up. Buyers can leave feedback on sellers, but sellers can’t leave feedback on buyers. Out of the sellers that I personally contacted (that got back to me), all but one of them agreed that eBay’s feedback policy, which changed in May, is their biggest frustration.

One seller responded, “Allowing buyers to give neg feedback w/o recourse. Without leverage i.e. return Negative feedback. This keeps ignorant buyers from learning how [to] work out differences – ‘expressing how they feel’. Mistakes are made. Some ‘new’ buyers just give Neg FB w/o contacting [the] seller about exchange[s], returns or refunds.” I have also seen people cite buyers’ lack of understanding about shipping costs leading to negative feedback.

Another respondent said: “The most frustrating thing about selling on ebay is the complete disregard of SELLER’s RIGHTS.” He then directed me to this site, which is dedicated to creating awareness about eBay’s policy changes, and illustrates the DSR system (pictured below). “The FEEDBACK SYSTEM Penalizes Sellers who do not have at least a 4.6 Rating in ALL 4 areas,” that seller noted. “I have been selling on ebay since 2002 and have NEVER had so much trouble with them!!!” I have an excellent record & I still get LOWERED SEARCH STANDING & HIGHER FEES!! THE SYSTEM IS NOT FAIR FOR SELLERS AT ALL ANYMORE!!!”

3. Small Businesses Get Shut Out
BusinessWeek’s article was about this very topic. It looked at a few small businesses that lost their ability to sell on eBay, in large part due to the feedback issue, but that is not the only thing affecting the little guys. Another part of this is eBay’s deal with Buy.com, which some people indicate is prioritizing merchandise from that site over their own. Combine that with the charges that small businesses must incur for selling through eBay, and profitability slides. There seems to be a common theme resonating among sellers, saying that eBay has basically sold out. They’ve gone too corporate and are no longer appealing to the little guys.

4. Lack of Communication
Another common gripe is that the company will not communicate with sellers to their liking. If sellers have problems, they get the runaround. They get impersonal automated responses via email, or low-level employees if they make a phone call. They can’t get through to management. They can’t appeal their suspensions (which are often considered unjustified).

Another communication flaw some have cited is that once their account is suspended, they can’t even communicate with customers who may have already placed orders. This is not good for the buyer or the seller.

5. Payment Policy
Last month, eBay announced that they would no longer allow sellers to accept checks or money orders as payment. Well, sellers were not happy about this either. Most felt like that decision should be up to each individual seller. Many have chalked this up to the company simply wanting people to use eBay-owned PayPal.

Taking away options for payment can alienate some customers, and sellers know that and found the new policy unfair. eBay said they would accept PayPal, credit or debit card payments to the seller, ProPay, or “payment upon pickup” as possible payment methods. They claimed to update this policy to provide users with a more “secure checkout experience.”

6. Fees/Lack of Profitability
As I said, there is a lot of overlap in these and this ties into the small businesses getting shut out problem. But many users are having a hard time justifying paying the fees they must pay to use eBay as their selling platform. Fees cut into the profits they could otherwise be making by selling directly from their own store, or from another platform that doesn’t charge as much.

7. Unwarranted Account Suspensions
Apart from those who are seeing their accounts suspended based on their DSR, I have seen many claims that their accounts are deemed “security concerns” and suspended as a result, without any justification for this assessment. One person claimed their account was suspended for this reason when they had not even bought or sold anything through the site yet. They went to try to sell something, but their account was already suspended.

8. The Buyers Themselves
There seems to have been an increase in tension between buyers and sellers on eBay since their policy changes took effect. Buyers have been accused of lying to get away with cheating sellers by not paying for items while eBay does little to combat the problem. Others just don’t think they can reach the right audience with eBay. They consider eBay buyers to be the type that are looking for bargains, and for those looking to sell quality products at prices that aren’t necessarily discounted, will have a harder time selling those products.

9. Glitches
Some complain about technical glitches at eBay. A BusinessWeek reader mentioned a variety of them including store glitches, PayPal glitches, search glitches, DSR glitches, etc. Any company is bound to experience some hiccups from time to time, but those hiccups are going to be frustrating to users, and there’s not much that can be done about that other than trying to catch such glitches before customers do.

10. Lack of Innovation
Finally, some just don’t feel like eBay is doing much innovation anymore. There seems to be a general consensus that in eBay’s earlier years, the company was somewhat revolutionary and appealing to anybody who wanted to get rid of some “old junk.” As time has progressed, many sellers have become less impressed. eBay has made some acquisitions over the years like Skype and StumbleUpon, but these have had little if any impact on eBay the site.

In the End…
Not all eBay sellers are sitting idly by while they vent their frustrations. There have been a number of sites started dedicated to catering to those who feel cheated by eBay. Sites like Shopify, Wigix, SeeAuctions, EveryPlaceISell, and I’m sure many more. Sellers know that they have other options. Many have turned to Amazon for example, or have opened up their own eCommerce sites to sell directly.

But not everybody is anti-eBay, so let’s make that clear. The one person I contacted who didn’t cite feedback as their top frustration, actually said, “You know honestly there really isn’t that much frustration that goes on with selling on my end.  About the only part is mailing out items and them getting ‘lost’ in the mail.  That is about it.” eBay could hardly be to blame for that. This person’s business didn’t even appear to be particularly large.

I’m fairly certain that this person isn’t alone in her opinion of eBay either. Even though many people are upset with eBay’s practices, some still find it a useful place to do business and will likely carry that mentality with them into the holiday season as consumers look for good deals on gifts for their loved ones.

However, it is quite clear that the company has alienated a broad range of users. I can’t imagine that all of eBay’s management finds this acceptable. Will there be changes made? What will eBay do to win back customers? Or will they just continue to target new ones? What does the future hold for eBay?

Top 10 Frustrations for eBay Sellers | WebProNews