As of today, ebay auctions are down nearly 20% compared to last Sunday, the day prior to the ebay seller strike. This is the largest impact ebay sellers have ever had on the site and it is a clear vote against ebay, against its price and policy changes, as well of as a vote against the future of the auction site.

What makes this data even more remarkable is that despite a special listing fee reduction for Febuary 14th in the US and despite ebay’s decreased listing fees going into affect the day the seller strike was scheduled to begin, the number of auctions have dropped off a cliff! Previous, a reduction in listing fees has always resulted in an increase in auctions (even the past febuary 14th). Without a doubt, the announced fee changes were designed to increase the number of auctions on ebay in order to combat the steady decrease in new auction listings that has plagued ebay for a few years now. The data shows ebay has had the opposite effect and its problems are only just increasing.

Check out the buyer’s ebay profile: http://myworld.ebay.com/meutecee . According to the feedback, the buyer bought several times without problems. Then he made at least one purchase where he paid with paypal and allegedly revered the payment with paypal after the seller had sent the product. As a result the seller incurred a loss as soon as paypal reversed the charges.

Paypal never lost any money in the transaction and it probably retained two users. The buyer obtained his purchased product fraudulently and went on the buy more products. He ended up buying 5 items from an ebay user with the id NEWYORKFASHIONPOLICE. After the seller sent all 5 items, the buyer had paypal reverse the charges again. The buyer scammed at least two sellers and received at least 6 items fraudulently at a total cost of several hundred dollars.

With the policy changes of ebay no longer allowing seller’s to leave positive feedback, ebay will be able to conspire with paypal and rogue buyers to financially harm sellers, without sellers having any ability to protect themselves from financial harm and fraud. That is an outrage!

This is an actual email from a buyer to an ebay powerseller. The buyer is Italian, hence the incorrect English:

hi
Now, i am really been sorry and annoyed of this matter. I want to pay the item but you persist and you do not understand!!! I want only and exclusively “THE NUMBER OF YOUR CREDIT CARD” to be able to load the money, all the other numbers that you send don’t interest to me!!!
I
wait for news
bye

Here is the background information. The buyer purchased and item and wants to pay for the item. All payment information is available in the item description, it was also emailed in the purchase confirmation, and in a separate email in response to a buyer inquiry.

Yes, the buyer really does want the Powerseller’s credit card number so he (the buyer) can pay the Powerseller using the Powersellers credit card number. Of course this is impossible. The buyer would have to provide his credit card number to the Powerseller, not the other way around. The buyer is apparently completely unaware of this impossibility. As a result of his unjustified frustration with the seller, the buyer will be able to give negative feedback to the seller in the future without the seller having any recourse even though the buyer is clearly at fault.

This is a great illustration of how the goofy decision by ebay not to hold buyers accountable to sellers any more will result in many seller getting negative feedback unfairly, which will result in them loosing Powerseller status and even getting suspended more frequently in the future.

Thanks to Ebay’s announcement of sweeping changes to its feedback system, which will result in further eroding mutual accountability between buyers and sellers, Ebay is now also facing a storm of negative PR in the Media in the US, Canada, UK, Germany and several other countries.

It is doubtful that this negative PR will benefit Ebay and its users in the long-run, but this reaction is to be expected if you tell good people for years that you are all one happy “community", and then force changes down your “community members’” throats without their prior consultation, feedback and buy-in to mutually acceptable changes.

At this point, i would like to congratulate the seller named Roy from MI, who suceeded in shedding light furing the PESA conference call with ebay on the real reason why ebay is announcing the most recent changes: to improve GMV. GMV is also the major metric which is closely followed by Wall Street as an indicator of growth and profitability and henceforth EPS for ebay stock.

Roy asked the representatives what measure they would use to assess the effectiveness of their most recently announced changes. Executives were clearly caught off guard by Roy’s question and after much initial studdering, they replied that the measure is GMV. Roy asked them to confirm, that GMV is the value of the merchandise sold on ebay, as opposed to the value of all merchandise available on ebay. When Roy asked what other metrics they would look at to confirm that the changes they announced would produce tangible results, they could not give him any other measure they would look at.

I have previously repeatedly stated, that the real reason why ebay is announcing the most recent changes is to “create” growth to please Wall Street. This growth will be achieved by bringing more buyers to ebay buy lowering the bar for them and protecting them from being accountable in a marketplace. The increased number of buyers will then buy more items that are more expensive since sellers will need to decrease the shipping prices to attain or retain Powerseller status (low shipping prices result in high shipping DSRs which are required for future Powerseller Status), and in order to forego profits they will need to increase item prices at the same time. This will largely solve ebay’s problems with sellers that sell an item for .99 cents and charge $10 for shipping. It will also signifficantly increase ebay’s profits on these sellers if they lower their shipping by just 50% to $5 and increae the item price by 500% from $.99 to $5.

Oh yeah, Roy also asked where he could get the GMV data from in order to assess whether ebay’s decisions are successful in the future. And he asked what the current basis was to compare against. Ebay’s response was the current basis is not public information, and regarding the GMV, he should just follow the quarterly earnings updates with Wall Street analysts.

It is sad to realize that ebay’s real concern is not the buyer experience, but Wall Street’s experience with its earnings. Unfortauntely, this does not prevent investors from buying into a company that maniplates its market to achieve results.

I participated in the PESA Conference call of ebay sellers (presumably mostly PESA members) and some Ebay executives (Brian Burke, Director of Global Feedback Policy and Jim Ambach Vice President of Seller Experience), as well as at least one other lady (Sarah, or Sue was her name, I believe from the Shipping Department (the people concerning themselves with ebay users shipping feees, feedback, etc at Ebay.

Unfortuantely, it became very clear, that the ebay representatives used the call to do damage control with update sellers, rather than to listen to sellers concerns and to provide real solutions that would address sellers concerns and restore their confidence in ebay as a marketplace of the future for them.

Ebay merely told sellers how it all will work. They never asked what they should improve or change or what they should take to the office and consider.

A word of caution on the changes to the Paypal Powerseller protection, since not everything that shines is gold.

On the surface the changes are great news. Upon closer examination, however, you will realize that if the changes apply to Powersellers only, then there will be significantly fewer sellers from benefitting from this policy change than what you might expect.

Ebay is also making Powerseller status dependent on DSRs and not just on sales volume alone anymore. This change will drastically reduce the number of Powersellers, which also reduces the number of sellers eligible for the new seller protection. The net effect is likely going to be very few Powersellers enjoying a significant higher level of protection, and perhaps 80-90% fewer Powersellers of which 100% of them will no longer enjoy any protection at all. Its up to the user base to decide which is preferable: many Powersellers enjoying some level of protection or most Powersellers enjoying no level of protection at all anymore.

One of ebay’s central problems is its misguided focus on the “buyer experience". This focus fails to recognize that what can fix ebay and make it great again is a fanatic focus by management on the USER EXPERIENCE. Ebay is a marketplace of buyers and sellers. The only way a marketplace can be successful in the longrun is by ensuring that buyers and sellers alike come away with experiences that meet and exceed their expectations.

A focus on “buyer experience” alone will always fail to fix a broken marketplace. Over time, buyers will become happier than sellers and as soon as sellers have an alternative marketplace that will make them happier than ebay, they will leave.

This has been the case for several years now as sellers have gone to other auction sites, and particularly to amazon. The most recent changes will not halt this trend, it may even accelerate it. Especially after these ebay changes amazon presents an even better alternative than ebay.

It is interesting that the recently announced ebay changes seem to bring ebay more in line with amazon, but only on the surface. In reality amazon is far superior to ebay as a marketplace for both buyers and sellers. Trying to force ebay to become more like amazon and seeking to accomplish that in the absence of a vision for the future, a complete lack of innovation, the presence of misguided policies, failed implementation of strategies and one-sided decisions that favor buyers over sellers will only accelerate the exodus of users in search of better prospects.

I should mention that the recent changes and ebay’s focus on “buyer experiences” makes sense for its shareholders in the short term. Ebay Sales growth (GMV) is slowing and it can not increase its revenue transacted on the site by attracting more sellers that offer ever more products. While GMV growth has been slowing the ratio of sold to unsold items has increased for years. That means there are ever more products available for sale that do find a buyer.

The way for ebay to increase its GMV is to bring more buyers to ebay by making buyers more comfortable to buy on ebay. Ebay knows what it has more than enough products for sale, but what it is lacking is more products selling. This can only be solved by buyers. hence the focus on the buyer experience. That is the quick and dirty way to lift sales and profits in the short term.

This will likely work for at least another 3 quarters until there will be a natural pick-up in sales due to the Christmas selling season. Sellers will continue to leave ebay, but they will not be missed during this time since there is currently an overabundance of products. Then, following the next christmas selling season, ebay will face an even bigger challenge in concocting a new scheme to keep its profits from rising thereafter. In the longrun, however, this is not a strategy, but a ponzy scheme with the intent to increase short term EPS rather than to ensure long term strategic growth that is driven by a clear vision, strong management and outstanding innovation.

So, it seems paypal will try to bolster adoption of its payment system among ebay users by mandating that users only accept paypal in certain categories.

This is yet more proof of a complete lack of vision, strategy and innovation at both ebay and paypal.

Increased adoption of paypal as a payment method needs to be driven by providing real value to both buyers and sellers. This needs to be done, among other things, by offering transaction security, real buyer and seller protection, user transparency, performance reliability, customer service, integration with ebay and other marketplaces, availability of meaningful information pertaining to transaction partners, and more.

At Uniseek we would like to see paypal offering the innovation, among many other necessary innovations, to automatically reject payments of buyers that fail to meet certain payment performance criteria. For example, paypal should allow seller accounts to automatically reject payments from buyers that previously filed one or more “item not received disputes". This would be especially meaningful, if paypal really integrated with ebay in a way that ebay did not allow the buyer to leave negative feedback if the seller rejects his payment based on the buyer’s past transaction history. Of course this would require to completely revamp the outdated ebay feedback system and actually make it meaningful to both buyers and sellers.

Other criteria for rejecting payments from buyers should be buyer location, number of previous paypal payments, number of buyer-canceled payments, chargebacks, etc.

[LINK]

We have done some research on auction sites other than ebay. It is very interesting to note that no one has come up with something innovative in the auction market space. Everyone seems to just copy ebay with largely the same features, except theirs seem more amatureish in their execution.

As soon as ebay rolls out a new feature, others seem to try to copy it. Some with more success others with less. Ebay itself is doing plenty of copying on its own. As soon as sites like youtube, blogging sites, wikipedia, digg and other sites become popular, someone at ebay seems to want to create ebay’s own version just to burry it somewhere on the site. Facebook announced widgets and suddenly ebay has some widgets on their own. I believe they are called “ebay to go". Rather than being really useful and innovative, they seem to just be an “we can do that too” kind of thing that doesn’t really create value for its users.

I have just binged on uniseek for the past 12 hours on a sunday. I just about had enough. Its time to stop and get up in a few hours and run my online business - the one that puts food on my table!

I talked some things over with uniboy and we have further crystalized a knock-down strategy that includes promotion, revenue generation, features and functionalities we may add already prior to the beta release or at the very latest concurrently with the the beta release. No matter when we add them though, they are all so revolutionary (sorry, uniboy), unique, innovative, amazing, you name it, that they will blow our competition out of the water.

Let’s just put it that way: ebay has basically done the same old thing for the last ten years, and they have not managed to get the ideas we have generated and will implement within the course of just a few short months. Why? Because ebay is trapped in its small little auction box and worries more about the buyer experience all the while neglecting and alienating buyers, sellers, advertisers, shoppers, browsers, bloggers, gawkers, users, etc. We, at uniseek, are building the site with the UNISEEK experience in mind.

What is the uniseek experience you ask? Let’s just say its more than just the buyer experience. Its more than the seller experience. Its more than the searcher’s experience. Its not even the visitors experience. UNISEEK will be everyone’s experience. It will be engaging, interactive, interpersonal, personal, dynamic, customizable, …well, more later

We are a couple of guys who decided to build a website based around a simple idea: let online commerce be social.

This means:

• Letting users decide what is important when it comes to search results and do it in a way that is transparent to users, so that there’s no visible effort involved.
• Letting potential buyers interact more and in different ways with sellers.
• Letting sellers take ownership of their own listings. If they want to add their own advertisements or videos or other widgets within their listings, let them. If they want to add direct contact info, why not?

We found that we can apply our patent-pending algorithm to just about anything online and use it to produce better results than the major players across several categories. Our focus right now is beating Google and eBay at their own game, in a competitive yet friendly manner of course.

We’re taking advantage of the fact that people are effortlessly smarter than machines when it comes to ‘ranking’ results that other users will find relevant.

Search engines such as Google that display results according to the authority of other websites are not effective tools for searching more social and dynamic websites, where authority is often irrelevant and the inherent lag time of search engine spiders is a comparative disadvantage. Thus, there is a lot of data that regular search engines are unable to provide relevant results for: videos, music, books, job listings, dating profiles, television shows, real estate listings, sports, current events, event listings, new products, new websites, and more. Because Uniseek users “push” item relevancy to our servers rather than our servers going out to find what is relevant, it does not possess these limitations. Of course this also works for regular searches, as well.

Don’t even get us started on the problems with eBay, the land where everything is ranked according to expiration time/date. (That’s taking the ‘Sunday flea market’ concept a bit too far, I think.) But how do we do what eBay does, better? By allowing buyers to more easily find what’s relevant to them, and allowing sellers to have much more control over their listings. Because eBay’s business model revolves around fees for this-and-that it is unable to provide much freedom to its buyers and sellers. (And, yes, we plan on several revenue streams.) Uniseek makes product listings much more interactive and engaging. Commerce is actually a social experience. Uniseek will make online commerce truly social.

And best of all, it’s free.

You can find the ‘elevator pitch’ here at this post on our forum.