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eBay: Stricter Selling Requirements on Tap

EBay today announced several major policy changes for sellers including new minimum requirements standards for all sellers and a new top-rated tier for high-volume merchants.

In the company's final policy update this year, key changes include criteria to be met to sell on eBay, a top-rated seller category for PowerSellers and more stringent use of detailed seller ratings , which are used to rank e-tailers on how they execute transactions.

The news comes at a time when eBay (NASDAQ: EBAY) is shifting from primarily being an online auction site to a more traditional e-commerce marketplace focusing on out-of-season and liquidated inventory as it loses share to rival Amazon (NASDAQ: AMZN).

Though eBay still reported weak numbers in its second-quarter, analysts were pleased with what they said was a stabilization in the core marketplace, and the stock rebounded for the first time in several months, perhaps signaling a come-back, albeit modest, for the once dominant e-tail site.

Likely to cause the most stir among the seller community, eBay, in an effort to "reward quality over quantity," announced it is restructuring the PowerSeller program, which offers fee discounts and increases marketing exposure to those that meet the criteria.

Starting in October, a new eBay top-rated seller status will be added to the PowerSeller program, with top-rated vendors getting the highest Final Value Fee discount, 20 percent, increased visibility in search results for fixed-price listing, exclusive access to "featured first" purchases and a top-rated badge on item pages.

The current PowerSeller icon is being retired from item pages and buyer-facing pages, but the current PowerSeller discount structure will continue until April 1, 2010 to give sellers eight months to adjust,

Fighting for discounts

While providing time to react is good for sellers, many may see their discounted fees drop, according to one eBay expert.

"I believe that the new criteria for PowerSeller eligibility will let more small merchants qualify for Final Value Fee discounts, but I think a significant number of sellers who are currently receiving 15-percent discounts may find they will drop to 5-percent discounts. However, eBay is giving them until April to try to increase their performance to qualify for the higher discounts," Ina Steiner, editor and publisher of AuctionBytes.com told InternetNews.com.

Sellers with 100 or more annual transactions and at least $3,000 annual sales who meet the requirements for top-rated seller status are eligible for the PowerSeller program and can start receiving top-rated seller benefits in October.

"Next April, the PowerSeller program will also include a requirement for sellers based on the new way to look at DSRs (very few 1s and 2s). PowerSellers that don't have Top-rated seller status will get 5 percent Final Value Fee discounts," writes Stephanie Tilenius, eBay senior vice president and general manager, in the blog post announcing the changes.

In regard to how sellers rank through DSRs, which rate on a scale of 1 to 5 components such as meeting promised delivery times, eBay will be "shifting focus from an average of a seller's total DSRs to the number of low DSRs as a more accurate measure of customer satisfaction."

DSRs recently replacing eBay's "feedback" rating structure, and were somewhat controversial as e-tailers struggled to adjust their day-to-day tasks to align with the new policy.

Next page: More Detailed Seller Ratings changes