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eBay News May Favor Big Sellers

Auction giant likely to announce more policy changes Tuesday that favor larger merchants.

April 13, 2009
By Michelle Megna: More stories by this author:

As reports surface that Skype is in talks to buy itself back from parent company eBay, the auction giant's seller base is bracing for big news Tuesday that may not make many low-volume merchants happy.

EBay (NASDAQ: EBAY) this year is limiting major announcements to twice a year, in spring and fall, to cause less disruption to sellers after a slew of significant policy changes announced throughout 2008 in regard to fees, feedback ratings and other integral seller issues left many merchants reeling to keep pace. According to industry watchers, tomorrow is the anticipated spring announcement - and the news is not expected, as they say in politics, to energize the base.

"No one is holding their breath that this first batch of changes will be good for the majority of sellers," Ina Steiner, a noted eBay expert and editor of AuctionBytes.com, told InternetNews.com.

During its recent brief to analysts, eBay said it was shifting its focus to the secondary market, meaning overstock and liquidation items, "a warehouses-instead-of-attics approach," said Steiner. She adds that eBay's current promotions and search algorithms favor large-volume sellers of commodity goods, and any fee or policy changes are expected to favor large merchants.

Changes coming this spring may include an expansion of eBay's structured catalog pages where shoppers see a more Amazon-style page when shopping for items; an ability for sellers to identify high-demand low-inventory listing opportunities; further changes to search; and category-based fee changes with lower up-front risk, but higher commissions when items sell, according to Steiner.

She is not optimistic that the announcements will be good for smaller online eBay vendors. "Many low-volume sellers would like to see lower fees, better exposure in search for their listings, and changes to eBay's feedback and rating system," she said. "I don't think they are going to get anything of significance on their wish list."

She also said that eBay's Daily Deals homepage promotion has been a success, and it will be looking for additional ways to move product quickly along with more merchandising and branding opportunities for large merchants.

More aggressive classifieds strategy?

Steiner is also predicting that eBay will likely become more aggressive with the classifieds format on eBay.com. She bases this on the company's new strategy of positioning itself as the starting point for consumers shopping on the Internet, even if it means sending the shopper elsewhere to make a purchase, and that it would serve up items in all formats (including classifieds and ads) and in all conditions (new, used, off-season).

"Last year eBay rolled out a carrot-and-stick approach to motivate sellers to provide a 'better buying experience,'" said Steiner. "EBay may tweak these programs, particularly those tied to discounts based on seller actions (such as offering free shipping) and performance (such as high DSR feedback ratings)."

The news comes at a time when eBay is currently shifting its marketplace focus from online auctions to more fixed-price sales, in an attempt to keep pace with rival Amazon. eBay recently opened up a new seller system called Large Merchant Services for high-volume catalog sellers.

Policy changes employed last year prompted unprecedented seller boycotts and critical mainstream media coverage while industry watchers speculated that a significant amount of sellers would leave eBay for alternative sites.

Next page: Skype News

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TAGS: policy, search, Amazon, eBay, Skype




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