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

Page 2 of 2

And, there are more DSR changes coming, as eBay prepares to employ new minimum standards for all sellers.

“Starting in October, there will be a new minimum standard for all eBay sellers based on the number of low DSRs (1s and 2s) received. The minimum standard will be stricter in April, 2010,” says Tilenius. The company also plans to introduce a new “Selling Practices” policy, outlining guidelines ” for professionalism and accuracy in all aspects of listings and transactions.”

In a special forum created to discuss the changes, Brian Burke, director of global feedback policy, fielded questions on the new DSR percentage policy. One seller was concerned that competitors could sabotage rivals by posting bogus numbers, but, Burke says that eBay runs weekly reports to identify abuse and uses models to look for targeted attacks.

Responding to concerns that the policy is generally unfair, Burke writes, “What we discovered was that buyer’s who left 4’s were not that much less dissatisfied compared with buyer’s who left 5’s. Buyer’s who left a 1 or 2 were much more dissatisfied and were more likely to leave the marketplace. So our focus on low DSRs is the correct focus at this time.”

EBay also said it’s aiming to cut unpaid item dispute time with a more streamlined process.

“We are also working on a new automated option that will make the process even more efficient, cut the time to resolution to as little as eight days and block negative feedback when a seller opens a claim and a buyer doesn’t pay. This automated option will be tested in late September and our goal is to gradually make it available to all sellers by the holidays,” according to Tilenius.

A new search format

The company also updated its new search format called “Best Match,” which ranks hits based on relevancy and recently replaced the older query style that used the ending time of auctions.

Best Match will now “look at listing’s recent sales in relation to the number of recent impressions it received as a key factor for Fixed Price listings. An impression is any time a buyer sees a search results page that includes the listing,” according to the company.

In addition, single quantity and newly listed Fixed Price items will be given exposure in Best Match even though they have no sales history. These listings will be given initial impressions based on the performance of similar listings. Auction-style listings will still get a boost in exposure as they are about to end, according to eBay.

Steiner summarized the policy changes as providing benefits for sellers.

“In general, I think today’s announcement contains some positive news for sellers, especially for those who sell internationally. In theory it looks like smaller sellers could benefit from some of these changes. However, I think most sellers remain vulnerable to what I call ‘bad buyers’ who treat sellers unfairly,” said Steiner.

She adds that the seller community, part of which has charged eBay with behind-the-scenes preferential treatment for large sellers, received no answers on this front. “Also, missing from today’s announcement is transparency into eBay’s special deals for large merchants, who may be getting special pricing and higher placement in search, along with participation in Daily Deal promotions.”

EBay did not returned calls for comment by press time.

News Around the Web