eBay store owners voice concerns

eBay store owners are concerned about company policies implemented to boost auction listings over their inventory

When Sandy Scarce began selling apparel on eBay three years ago, she planned to use the company's marketplace as her only sales channel, but today, deeply discouraged, she is moving away from it.

Upset at what she perceives as misdirected policies and clunky services from eBay, Scarce this week opened up her own online store. She's also moving inventory to a rival marketplace from Amazon.com, whose operation and sales climate she finds superior.

"I'm transitioning away from eBay," said Scarce, ranked as an eBay Silver PowerSeller, which means her Sandy's Closet eBay store generates between US$3,000 and US$9,999 in average monthly sales and provides a high level of service.

Among her chief complaints is an effort announced by eBay in July of last year to prioritize its core auction listings over its stores' inventory, which she said has hurt her sales.

"If you're not an eBay auction seller, eBay doesn't want you on their site. EBay has disadvantaged store owners over the last year to drive them away," Scarce said.

To boost traditional listings, eBay began marketing them more aggressively, increased their exposure on the eBay Express specialty site and raised store listing fees.

"As an eBay store owner, this hasn't been a good development for me," Scarce said. "They're hiding store owners and their merchandise, making it harder for buyers to find them."

She is also disappointed with the tools and applications eBay provides to sellers, many of which she considers clunky, and with the performance of the site, which she finds has deteriorated in terms of response times and availability.

Scarce is not alone. On Thursday, as eBay kicked off its annual eBay Live conference for merchants in Boston, the Professional eBay Sellers Alliance (PESA) posted a scathing paper on its Web site, blasting eBay for what the group considers a significant deterioration of the marketplace.

"The eBay marketplace has continued to degrade and the current state is unhealthy," reads the paper.

In the document, PESA, which includes many large eBay merchants, says the buyer experience on eBay leaves a lot to be desired, and blames eBay for failing to address this issue and make the necessary investments to fix the problems. PESA is concerned that the eBay marketplace will fall into "a permanent decline."

PESA considers as major problems eBay's search functionality, which it rates as subpar, and a lack of incentives for merchants that provide superior service. PESA also faults eBay for failing to fully leverage for the marketplace companies it has acquired like Skype and Shopping.com.

In eBay's defense, eBay spokesman Hani Durzy said the company is in the midst of a "multiquarter" effort to improve the buyer experience on the marketplace.

For example, eBay is actively laboring to improve its search capabilities with an effort it calls Finding 2.0. Some of those enhancements are already being tested with small groups of buyers and will be rolled out to all users progressively this year, he said.

With Finding 2.0, eBay wants to improve the relevance of search results without sacrificing what Durzy calls "serendipity," which eBay considers a key ingredient of the eBay experience: stumbling upon a product that happily surprises you.

Another part of the buyer experience improvement effort is the continued reduction of fraud on the marketplace, in order to increase trust and safety. "We've always been good at this," he said. But as online crime becomes more sophisticated, eBay is stepping up its efforts, becoming more proactive in areas such as detection of counterfeit products, he said.

Regarding the gripes of store owners like Scarce, Durzy said that eBay in no way wants to get rid of those merchants. Instead, it just wants to "reignite" eBay's core auction activity, he said. Back in July, eBay officials explained that store listings take longer to sell and are more costly for eBay to host, compared with traditional listings. Thus the reasoning behind the measures it has implemented to better balance auction and store listings..

Still, the strategy makes little sense for those high-volume merchants that are distancing themselves from eBay.

Designer Athletic generated about 80 percent of its sales from its eBay store a year ago, and today that is heading towards 50 percent, said George Trantas, president of the footwear and apparel vendor.

"Our goal is to grow our off-eBay business," Trantas said. "EBay conversions aren't as great as they have been in the past."

In addition to selling on eBay, where it is a PowerSeller, the company sells from its own Web site and from the Amazon Marketplace and others like it.

Like Scarce, Trantas has found that the traditional eBay buyer requires a lot more customer service attention before a sale is closed, when compared with sellers on the Amazon Marketplace and other venues. That adds to the cost of doing business on eBay, he said.

Both Trantas and Scarce attribute the difference in buyers to the fact that customers generally feel safer on Amazon than on eBay, so they require less assurances from the seller.

Adding to merchant concerns is the decision by eBay this week to turn off all of its paid search ads on Google's U.S. ad network. One of the worried ones is Jonathan Garriss, PESA's executive director and CEO of Gotham City Online, an apparel store on eBay that also has its own site.

"This is very concerning for me as a seller, that eBay is willing to shut off a lot of traffic to its sellers and listings. This doesn't necessarily hurt eBay, which still collects its fees, but rather the merchants on its site," Garriss said, adding that eBay should reinstate these ads immediately.

A source told IDG News Service on Wednesday that the decision was made to punish Google for planning to throw a now canceled party in Boston for eBay Live attendees that want eBay to allow them to offer the Google Checkout online payment system to their buyers.

Durzy said that the ad pullout remains in place as of Thursday afternoon.

"I very much hope they work it out. Google and eBay have a lot to offer each other," said David Yaskulka, vice president of product marketing at Kompolt, an online auction agency.

EBay says Google Checkout is too new, while Google says eBay is just trying to protect its own PayPal online payments system. Garriss, who is evaluating Checkout for his own site, believes eBay should reconsider its position. "Google has proven there's room for improvement on the online payment side, and if another option makes shoppers more comfortable, as a merchant I'd like to add that option," Garriss said.

Scarce, meanwhile, decided to stay home and not attend eBay Live. Today, her eBay inventory is down to half of what it was a year ago. After only six months, Amazon Marketplace already generates 25 percent of her sales. She'll maintain a minimal presence on eBay to drive traffic to her own store.

"I see no reason to go to eBay Live. The events of this past year have made it painfully obvious that eBay isn't interested in what I do."

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