Typically when eBay makes changes to its fee structure, there’s a hue and cry from sellers. But on January 29, 2008, eBay not only changed its fee structure, it made major changes to feedback and to the way it serves up search results. This article summarizes the changes and includes links to resources on eBay and AuctionBytes.com to learn more.There was some confusion over the pricing changes as sellers tried to determine how lower insertion fees and higher Final Value fees would affect their bottom line. But much of the seller reaction from AuctionBytes readers revolved around changes to feedback.

One change that isn’t getting much attention but may have far-reaching effects once it is rolled out is eBay’s change to the default sort-order of search results. eBay is making Best Match the default sort order using an algorithm based on a number of factors. This may make it difficult for sellers to find their items in search results, and AuctionBytes is expecting some reaction from sellers – and buyers – once Best Match rolls out and its effects can be seen.

Fee Changes
The fee changes affect sellers differently depending on their listing style (whether they use the 35-cent Gallery photo feature, which eBay is making free) and sell-through rates. Because eBay lowered listing fees and raised commission fees (FVFs), it would appear that the better your sell-through rate, the more likely this will feel like a fee increase. Conversely, the lower your sell-through rate, the more likely it will feel like a fee decrease. To help sellers estimate how their businesses may be affected, AuctionBytes published an eBay Fee Calculator provided by a reader named Andrew (http://www.auctionbytes.com/cab/pages/feecalc).

In addition, PowerSellers who achieve high DSR scores will receive a discount, as follows:

• If you are a PowerSeller and all four of your detailed seller ratings (DSRs) for the past 30 day period are 4.6 or higher, you qualify for a 5% discount on Final Value Fees.
• If you are a PowerSeller and all four of your detailed seller ratings (DSRs) for the past 30 day period are 4.8 or higher, you qualify for a 15% discount on Final Value Fees.

Link to eBay Fee changes:
http://pages.ebay.com/sell/update08/basic/index.html

Link to AuctionBytes Blog, where there are over 100 comments:
http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2008/1/1201610871.html

Feedback Changes
eBay is taking away sellers’ ability to leave negative feedback for buyers, and among our readers, it appears this is a hot-button issue. However, eBay has addressed some of the concerns sellers have around the Feedback system. Here is a summary of the changes:

• Sellers will no longer be able to leave negative or neutral Feedback for buyers (beginning in May 2008).
• Buyers and sellers will be able to earn up to one Feedback per week from the same trading partner (beginning in February 2008).
• Feedback more than 12-months old won’t count towards a user’s Feedback percentage.
• When a buyer doesn’t respond to the Unpaid Item (UPI) process, the negative or neutral Feedback they have left for that transaction will be removed.
• When a member is suspended, all their negative and neutral Feedback will be removed. (Negative or neutral Feedback left by currently suspended members will be removed in late May or June 2008.)
• Buyers must wait 3 days before leaving negative or neutral Feedback for sellers with an established track record – “to encourage communication.”
• All Feedback must be left within 60 days (compared to 90 days today) of listing end – “to encourage timely Feedback and discourage abuse.”
• Feedback percentage will be based on the last 12 months, although the total count remains lifetime. This means that any negative or neutral feedback left more than 12 months ago will no longer affect a user’s percent positive score.
• Buyers will be held more accountable when sellers report an unpaid item or commit other policy violations.

Many sellers have expressed concern that bad buyers may extort them with the threat of negative feedback, and taking away the ability to leave a buyer negative feedback takes away sellers’ leverage. eBay states, “We’ll increase our monitoring, and take action based on seller reports of buyers behaving very badly.” eBay also said it would increase the “block bidder list” capacity from 1,000 to 5,000 user IDs. Some sellers have said the feature will no longer be useful, however: since buyers won’t have any negatives, sellers won’t know whom to block.

Link to eBay Feedback changes:
http://pages.ebay.com/services/forum/new.html

Link to the AuctionBytes Blog, where there are over 800 comments:
http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2008/1/1201611437.html

New Seller Standards
eBay said it would discourage bad seller behavior through decreased listings exposure in search and through safe payment requirements. Starting in February, eBay will decrease listings exposure in search for the “relatively small” number of sellers who have a high buyer dissatisfaction rate and low DSRs over the last 30 days, especially for charging excessive shipping and handling.

Secondly, eBay will begin requiring sellers with high buyer dissatisfaction rates to offer a safe payment option. Last year, eBay began requiring all new sellers to offer PayPal or a major credit card as a safe payment option. This year, eBay is expanding that requirement to include “a small number of sellers who have the worst rates of buyer dissatisfaction or who have less than 100 total feedback.”

Also, beginning in July 2008, sellers will need to have a minimum 4.5 score in all four DSR criteria over a 12-month period to be designated a PowerSeller.

eBay will introduce a dashboard where sellers will be able to view the following account information: PowerSeller status; Account billing status; Final value fee discount qualification; Policy violations and risk of restriction; Buyer satisfaction (based on feedback, DSRs and complaints). eBay stated, ” You’ll basically have the same view as customer support, so there should be no more complaints about not knowing where you stand at eBay.”

Best Match Search Visibility
Beginning in March, eBay will make Best Match the default sort method site-wide. In addition, eBay will begin using the most recent 30 days of Detailed Seller Ratings in the Best Match algorithm to “differentiate between sellers who provide a positive buying experience and the small percentage that don’t.” The algorithm for Best Match will continue to include factors such as Time Ending Soonest. eBay said Best Match will become the default sort in search to give more buyers the results they want and Best Match will:

• Increase exposure for sellers with DSRs 4.6 and above and at least 95% customer satisfaction in the last 30 days.
• Decrease exposure for sellers with low customer satisfaction or Shipping & Handling DSRs.

PayPal Protection for eBay PowerSellers
eBay announced that, starting in February, PayPal will offer eBay PowerSellers extended protection under the existing Seller Protection Policy:

• PayPal will no longer require that PowerSellers ship to confirmed addresses for items sold on eBay. Every address in the PayPal system will be considered a confirmed address for PowerSellers.
• For PowerSellers there will no longer be an annual $5,000 limit on seller protection.
• Seller protection will be extended to cover transactions with buyers in additional international markets. (Sellers should make sure they understand the shipping requirements for international transactions.)
• The Unpaid Item Protection Program that refunds feature fees to PowerSellers in the event of an unpaid item will become a permanent benefit of the PowerSeller program.

eBay has raised the requirements of its PowerSeller program. Also, note that sellers should read and understand the limitations of PayPal’s Seller Protection Policy in detail (https://www.paypal.com/us/cgi-bin/webscr?cmd=p/gen/ua/policy_spp-outside).

PayPal Blog:
http://www.thepaypalblog.com/weblog/2008/01/coming-soon-exp.html

Additional Links:

eBay’s announcement of changes, January 29, 2008:
http://www2.ebay.com/aw/core/200801290559182.html

Video of eBay executives introducing changes to PowerSellers at the Ecommerce Forum, January 29, 2008:
http://www.iian.ibeam.com/events/pmtv001/25201

Video of eBay executives answering questions about the changes (Ecommerce Forum, January 29, 2008):
http://www.iian.ibeam.com/events/pmtv001/25431

AuctionBytes Podcast Interviews
http://podcast.auctionbytes.com

AuctionBytes Blog
http://blog.auctionbytes.com