eBay changes and my Crikey article

Crikey.com.au has an article today that I wrote. I’m posting it here Crikey locks down content for paid members. I think you should be able to read it, but if you are a Crikey member and want to comment go to their site. :

eBay turns to the dark side

One of the toughest things in business is the game of building trust. Trust and reputation are everything in commerce and even more so online — there’s nowhere to hide. Which is why the latest series of decisions by eBay are so astounding. The online marketplace that eBay addicts have grown to love and trust has had both its purpose and values tampered with.

Earlier this year eBay announced that it would remove negative feedback about buyers from the site, effectively removing the sellers’ right to complain. When both sides had equal access and rights to leave negative comments about each other the eBay experience was a reasonably trustworthy trading process. Now it appears to be all one-sided, which screws both reputation and trust.

Up until this year, most eBay customers operated under the widespread agreement that if you are auctioning off unwanted crap to a perfect stranger on the other side of the planet, you want to know that they ARE perfect, and that the deal will go as planned. That the buyer and auctioneer share common values of trust and integrity was always a given. Yet in a world where all buyers have positive feedback, there is no trust – buyers can blackmail sellers into giving money back with the threat of a negative comment, with no come-back on the part of the seller.

In response, eBay members went on strike for a week — a poll showed that 90% of sellers were unhappy with the changes. That quarter was the worst in seven years for eBay. And the best for some of their competitors.

And now, to further alienate members, eBay has announced it is moving away from auctions to fixed price sales to compete with Amazon. According to eBay, auctions (57% of revenue) are growing more slowly than sales, so instead of setting a target to improve auctions, eBay is focussing on competing with shopping sites and Amazon.

Goodbye to the nail biting days of waiting to see if you have won the crap you are not sure if you wanted anyway. Hello to Wham Bam Don’t Let the Door Hit You on the Way Out BUY NOW sales.

eBay was a powerful community because it was one of the first to put the transaction in the hands of the consumer — in the past were classified ads whose drawbacks include organisation and payment and trust issues. eBay instead offered an easy way for individuals to exchange items with an escrow payment process, and a fun auction built in. And a mechanism for evaluating trust, building a loyal community, which you don’t get with classifieds.

eBay is a $7.67 billion dollar online business (2007) dependent on customers trusting each other in order to transact with each other. By changing the rules of the game, screwing with both trust and auctions, eBay may yet lose their greatest asset — their community.

Nice of me to advertise Crikey on here. Heh.

You know, you CAN change the primary purpose of a social network but it has to be clear why you are doing it. Flickr went from being a game to a photo sharing site. Without peeving their community too much, one suspects!

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  1. Great concluding point, I think it’s important that these changes in purpose are driven by the users themselves and supported by the organisation behind it.

  2. Not to mention eBay shutdown quite a number of eBay Partner Network affiliates base on the reasoning that they don’t generate “good” traffic.

  3. eBay has really lost the plot.
    People shopped there because it was part shopping, part game. Their “big game” campaign that recently ran on broadcast tv and on billboard ads reinforced that.

    Now, after alienating buyers and sellers by trying to force PayPal down their throats and taking away sellers’ rights to ID fraudulent buyers, they’re dumping the game element and alienating auction sellers to take on Amazon AND Google shopping? Wow. Seems like a New Coke move to me.

  4. If you wrote it, how come Crikey is monetising access to your article? Interesting finding this post 5 years down the track. Ebay doesn’t look much smaller to me than it was 5 years ago. Flickr was a game?

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