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Summary:

As eBay tinkers with its e-commerce site, CEO John Donahoe has been making the case that the company is turning around. But as we’ve noted, while some of the changes look encouraging, it’s not clear whether enough buyers are returning to the site. Today, Citigroup analyst […]

imagesAs eBay tinkers with its e-commerce site, CEO John Donahoe has been making the case that the company is turning around. But as we’ve noted, while some of the changes look encouraging, it’s not clear whether enough buyers are returning to the site. Today, Citigroup analyst Mark Mahaney expressed similar concerns, noting that while he’s “incrementally more positive” about the company after meeting with executives, he sees “sustained declines in online traffic to the site as a clear negative.”

Traffic to eBay’s site is down 9 percent so far this quarter compared to a year ago, Mahaney said. Meanwhile, over at Amazon, traffic is up 9 percent. Mahaney is maintaining his “hold” rating on eBay as well as a $16 target price (at least check, shares of eBay were trading at $17.30).

Still, he says, eBay is making progress on buyer and seller initiatives. On the buyer side, eBay has been trying to improve customer service and promote daily deals through new channels like Twitter. It also plans to introduce a new, improved search engine in the fall.

According to Donahoe, eBay’s top sellers are happy with the new discounts, incentives for free shipping and high placement in search results. And according to Manahey, its integration of BillMeLater will also benefit larger sellers. Mahaney said that smaller sellers, who have been displeased with many of Donahoe’s changes, may respond positively to today’s news that eBay is letting sellers list five items for sale each month without paying the up-front listing fees.

Or maybe they won’t. As Dow Jones pointed out, items that are listed for free will face fixed commission fees of 8.75 percent (or $20, whichever is higher) — instead of commissions that vary according to the price of the item for sale. That means, in some cases, the waived listing fees will mean higher commissions than under the old system.

Some smaller buyers may be willing to accept the olive branch that eBay is offering by waiving listing fees on five items per month. Others will surely point out that the move doesn’t fix a fee system they feel is tilted in favor of top sellers. But the biggest issue facing eBay right now is buyers – why aren’t they returning to a bargain-oriented site in a recession?

  1. Ebay is a mess,Feedback for buyers only? Buyers buying NOT paying!DUH….Sellers being scammed by Paypal Chargebacks? You would be crazy to sell any valuable under the forced Paypal! Then get SCAMMED out of item? For a total loss of item and $$$$? Don’t even get me started about the FEES!Best Match CRAP? Worst match!Free listing of 5 items?8.75% final fee!Ebay is a liar ,with their pants on fire!Ebay & Paypal support theft and fraud.Ebay knock knock……wonder why nobodys home? Donahoe won’t answer the door.the phone,emails…….Where are you John? Just like Ebay LIVE ….Its gone.

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    1. NOISE NOISE NOISE Wednesday, June 17, 2009

      John Donahoe what was it you call the flea market crowd? NOISE? CAN YOU HEAR US NOW?!!! LOL I will never buy or sell anything again on Ebay,Nor will I ever use Paypal. Ebay the most hated site in the WORLD!

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      1. We are all previous sellers and buyers on ebay. And we have grown to hate ebay due to the litany of practices they’ve pioneered to establish a monopoly and squeeze every drop of money out of their sellers and thus buyers.

        Here is a list of ebay’s actions that we are most displeased about…

        1.) Just in the past few years, ebay has slowly increased the percentage of their commission for goods sold from a little over 6% to 8.75% of the final ending fee!! A 50% increase in your commission/share of the profit in just a few years is absolutely unacceptable!!

        2.) When overstock.com popped up as a competitor to ebay offering lower commission rates, ebay proceeded to buy them out, gut the auction portion of their site, and only then did it start to increase it’s commission rates ever higher.

        3.) Ebay has gone to extraordinary lenghts to shut down other competitors like yahoo auctions and amazon auctions, and are now engaged in buying up any online auction and classified listings left over.

        Recently, they bought up 27% of Craigslist (a rival) and are currently being sued by Craigslist for using that stock share to undermine Craigslist. Once any remaining competition is done away with, expect to see ebay’s commissions rise even higher. This is the definition of monopolistic anti-competitive tactics.

        4.) When paypal first opened to provide people a cheap easy way to pay for online auctions and other purchases, ebay proceeded to buy out the company, and later increased it’s commission rates. Whereas ebay used to allow sellers to enable buyers to pay for items with cashier’s checks, and money orders even just a few months ago, ebay recently changed this policy. Now the only payment method that can be used on ebay is paypal.

        Any sellers that tell their buyers they can pay via money order or check if they don’t have a paypal account, get their auction closed by ebay, without a refund of the listing commission fees. This ensures that ebay gets a cut of the price twice, first for the auction’s ending price itself, and then a percentage of the paypal payment as well. Most sellers including I’ve had auctions that ebay ended prematurely, without warning , and without refunding the listing fees because they mentioned that they will accept payment via either paypal or money order from buyers that don’t have a paypal account.

        5.) In addition to the continual increases in the commission fees, ebay has taken away sellers right to leave nonpaying buyers and buyers who abuse the auction site bad feedback. Sellers no longer can leave negative feedback to bad buyers. This policy along with the higher commission rates led to many sellers boycotting ebay as well.

        Seriously, does ebay’s management not see the direct correlation between the higher commission rates it started charging 2 years ago, with the loss of sellers (and thus buyers) from it’s site?

        Yet, in an effort to squeeze every drop of money out of us, ebay has continuously increased the commission fees more and more and each year. And as a result, it has become less and less profitable for all of us. Many ebay stores have had to close. Ebay’s repeated milking of your sellers with higher and higher commissions and more restrictions is only going to continue your sites trend of losing business, and it’s stock’s decline. And as this petition goes to show, we, the previous buyers and sellers on your site, are well aware of what you have been doing to squeeze every drop of profit out of us.

        We strongly urge to google or some other competitor to launch an auction site to compete with ebay that is FREE and completely supported by ad revenue to provide relief to the many sellers that have had to close up shop on ebay due to the commissions going up from 6% to 8.75% in just two years. And we urge them to do so before ebay completes it’s current buyout of craigslist.

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    2. EBAY WILL NOT survive this and their stock tells the story. Rising fees, pitiful customer support, non-enforced policies, and even sluggish web pages will continue to be their downfall.

      Personally, the treatment I received last April 2008 from ebay ‘customer help’ is the worst I have ever been treated by ANY company. I will NEVER go back.

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  2. The answer to why buyers are not returning a bargain-oriented site (eBay) during the recession is simple.

    Some of the most frequent buyers on eBay were it’s small sellers. Many small sellers used proceeds from successful sales to complete purchases of other items on eBay.

    eBay continues to abuse small sellers with exorbitantly high fees and uses the revenues from the small sellers to off set the discounted and free listings offered to their high volume sellers.

    The resentment small sellers feel towards eBay results in many making the decision to list and sell on other sites which are aggressively catering to their needs by offering a more advantageous fee structure, enabling them to earn higher profits.

    Sales at eBay are unlikely to see significant improvement unless eBay addresses the needs of small sellers making it more profitable to get back into the game. The knowledge that eBay will allow large sellers to flood listings with thousands of items at little or no cost leaves small sellers feeling they have been targeted for extinction.

    The token “fee reduction” recently announced is in fact a significant fee increase as eBay will now take an 8.75 % on final selling prices. This lowers the incentive for small sellers to get back into the game as once again, eBay claims to have reduced fees while reaching deeper into sellers pockets after converting sales.

    The small sellers as buyers will continue their eBay avoidance because they feel eBay has personally targeted them with not only a fee structure that favors larger sellers, but systems and policies that are targeted to favor larger sellers over smaller sellers.

    With millions of unhappy small sellers publicly voicing their dissatisfaction with the changes eBay makes, their vitriol sways the opinion of buyers that once were their customers. Many small sellers which have left eBay for other venues have marketed their move to their former buyers, and the buyers have followed.

    As eBay continues to allow their listings to be flooded with merchandise that is out of season, out of production, clearance merchandise, the uniqueness that was once a major attraction for buyers has gone as well.

    Under current CEO John Donahoe, eBay continues to try to blaze a new path. As it does, it becomes less and less the venue of choice for buyers looking for unique items.

    eBay is throwing the baby out with the wash water, scratching their heads wondering why their efforts to boost sales are failing so miserably.

    It all comes down to eBay’s disregard for the ones that brought them to the dance in the first place. eBay will continue to slide and under perform as long as the current corporate mind set continues to disregard the fact that their original dance partners are being poorly served.

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  3. The 5 free listings is actually a fee increase (as noted above)… Vendio actually has a blog post on exactly this…
    http://www.vendio.com/vendable/2009/06/16/ebay-selling-tip-list-5-free-not-a-good-option-for-all/

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  4. I don’t shop on ebay. I won’t. Haven’t in a year, and I’m phasing out my store. I pay more in fees than I make in sales. I was a small seller, about 1,000 items in my career. Ebay used to be a place I shopped on and sold on, but they are increasingly becoming less important or even relevant, in my life.

    But there is no need to shop on ebay, because you can’t find whatever you are looking for there anymore. All their “improvements” have made them a place where you can’t find “it” anymore. And that was the whole point of ebay,that you could find anything, no matter how weird or off the wall. They’ve become boring and insignificant. They’ve improved themselves to death.

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  5. I stopped using eBay years ago. I have hardly sold anything there, mostly a buyer, but it used to be a place to get a good deal on something being sold by an actual person, a small seller. Now it’s basically all shady business vendors filling it up with buy me nows. If I’m not getting auction deals, or good mildly used bundles for a decent price, why am I risking it again? No thanks. Not to mention all the headaches people have with PayPal.

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  6. Ebay is such a great example of galloping management incompentence ruining a vibrant and successful company. Ebay had a unique attribute – it was the place to go to find fascinating and wonderful stuff for auction – and where to find valuable items too – it was becoming the Sotheby’s and Christies of ecommerce and with the chance to dominate even these. I was a biggish ebay seller and buyer for many years, I don’t list any more as there’s little point, and now my standard search, which used to pick up many items of interest to bid on, now only returns a few. Little point logging on any more really – with the neat stuff going, the “eyeballs” are going too, Ebay’s no longer unique, just another big box estore and there are better ones out there. I wonder too if ebay had any idea of the demographics of their customers – the despised small sellers – the (ex) sellers I know locally certainly aren’t the mom and pop borderline poverty types but are rather well-off collectors with tons of disposable income – I guess they’re elsewhere now.

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  7. I am a former power seller, who took 15,000 items of eBay due to their stupidity and greed over the last year. Since last May ’08, sales tanked and continued sliding down as each new change came about.
    I now sell at flea markets (remember how Donahue hates those), I do in 2 weekends about 1/2 of my last few months of work and sales on Ebay. No listing fees, $25 for 2 days and a lot less work and hassle with turbo lister, fees and the sheer incompetence of the lot at eBay. And oh yeah, a retired guy like me spends money on books, music, tools etc….just not on eBay. They don’t want me, a small seller, and I sure don’t want them anymore….Maybe when Donahue is done killing eBay, he can go over to AIG or some other corporate incompetence culture. Sorry, eBay, see ya…Rather Russ

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  8. Christopher Walker Wednesday, June 17, 2009

    eBay has become an overstock venue for big business. 1) Buy it Now and Fixed Price listings everywhere.
    2) Encouraging sellers to offer free shipping. Why would i offer free shipping for an auction? 3)Daily Deals (Can you say big Lots?), 4)Best Match search catering to shoppers “Not Bidders” I could go on and on. Bottom line is eBay made a decision to go after the big business a long time ago and in doing so ,they drove out there family (Community).
    Mr. Pierre Omidyar will still be around to watch his vision crumble. The irony of it all is here comes another Pierre with an eBay sister site yarpool. The odds?

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  9. Former eBay buyer Wednesday, June 17, 2009

    eBay is lost.

    Unique, one-of-a-kind / used items were the only reason to shop there, and the management has chased all those sellers off (with a vengeance, apparently).

    eBay should be rockin’ in this recession, but instead they just seem to be running out of excuses. I used to buy all kinds of stuff there; now it’s mostly just a sea of high-volume new junk/knock-off sellers.

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  10. I have been displeased with ebay for years.
    There are a few sites out there with better customer support that are gaining momentum and are a way more attractive option for buyers and sellers alike.
    This is a new one on my radar: Yarpool.com
    Keep an eye out for it!!

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