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EBay exposed

Posted on 15 May 2009 at 15:13

"The results are skewed so they always include at least half from the fixed-price items, so smaller traders have effectively seen their shelf space cut by half," said Kolenda.

The range of services and price benefits for top-tier "Diamond" sellers has even upset the Professional eBay Sellers Alliance. "The deal eBay arranged for Buy.com, as well as the new Diamond tier pricing, hurts the eBay community," the alliance said in a statement. "Sellers that are delivering great buyer experiences find themselves at a substantial disadvantage because of the pricing disparity of the Diamond tier access."

The conclusion for many smaller vendors is that eBay simply doesn't want them any more - 80% of sales apparently come from 20% of vendors. EBay disputes that conclusion. "We are not attempting to exchange one type of seller for another - as long as they provide excellent customer service and good value then every seller has the opportunity to succeed on eBay," said a spokesperson. "While it's a competitive marketplace, every type of seller brings something unique."

Gagging sellers

If fee changes were unpopular, then the decision to stop sellers leaving negative feedback for buyers sparked fury. "I hate eBay for this stupid decision - buyers can mess you around as much as they like and there's nothing you can do, but they can leave bad feedback for you so they have got you over a barrel," said stamp and coin trader Denver Cross. "I've been burned a few times. People can simply not pay when you've sent the goods out. And there's nothing to stop competitors leaving bad feedback for you to screw you over."

Cheshire-based eBay seller Selectronicstore claims it's lost £50,000 after being suspended from trading on eBay twice as a result of negative feedback from buyers trying to play the system. "Sellers are being discriminated against because it isn't a level playing field," said Neil Hamer, the store's technical director. "People leave negative feedback just because they can, but what they don't understand is that eBay will just shut your business down. Companies using eBay are going out of business left, right and centre."

One of the great ironies of eBay is that generally whomever it tries to help, someone else always loses out. The scammers and fraudsters that look for the loopholes are probably the only winners. Take, for example, the company's reaction to the wave of fraud concerning buyers who send payments, but never receive the goods.

We exposed one of the scams in PC Pro when a team of virtual vigilantes clubbed together to try to trace the rogue trader that fleeced them out of thousands for non-existent electrical goods. Six months later, the neighbourhood watchers were dismayed to see the same fraudsters, albeit acting under different user IDs, operating the same scam.

The changes to the feedback system simply moved the pressure point from buyers to sellers. While the media has concentrated on the poor consumer, vendors have been ripped off, and now they're unable to leave negative feedback and warn others.

EBay says it's committed to fighting fraud, and has put systems in place. The problem is that as fast as the company implements - often unpopular - changes, the scammers find another way to make a quick buck. "People are out there blackmailing us saying they want their money back, but then they don't even return the item," said Hamer. "PayPal will refund the money without even checking if we've got the item back - the buyers end up with the item, the money and all we get left with is negative feedback. The buyers just have complete control. EBay is allowing crooks and conmen to operate as buyers, and us sellers are being robbed blind."