eBay Seller Revolt Gaining Traction

Sellers have banded together to boycott eBay in the past, usually for the same reason: its ever-increasing fee schedule and, in the views of some, policies that ignore the needs of sellers. For the most part, these efforts have failed either to change eBay's mind or even to make any significant dent in its traffic.

This time appears to be different, with more sellers publicly jumping on the boycott bandwagon. Fees have reached new highs, and many sellers are infuriated by new feedback policies that forbid them from making negative -- or even neutral -- comments about buyers. Buyers, for their part, still have free rein to comment on sellers.

eBay has shrugged off the complaints, noting the additional protections it has put into place to guard against buyers using the feedback system against sellers for vindictive reasons. Also, representatives from the site have pointed out, the traffic one receives on eBay compensates for the higher fees.

Displacing eBay?

Few sellers believe eBay will ever be displaced, precisely because of its volumes -- it basically invented the e-commerce auction category and still dominates it more than 10 years later.

However, some are moving on, either because they cannot afford to stay with eBay, or simply no longer want to.

Debi Pieraccini, who until this Tuesday was selling Christian and Jewish items on eBay, is among the latter.

"Some people depend entirely on eBay for their income," she told the E-Commerce Times. "I am not one of them."

Pieraccini is relaunching her operations at OnlineAuction.com, which was created by a former eBay power seller.

Fees are reasonable compared to eBay, she said. "Last month my fees at eBay were US$700, which was more than I actually made."

The new fees and feedback regulation have "pulled the rug out from a lot of sellers," Pieraccini lamented.

Nancy Baughman, founder of eBiz Auctions, told the E-Commerce Times she would be forced to cut back on her two part-time employees' hours because of the changes eBay is implementing. "All of these changes are hitting us at once. It is getting harder and harder to make a living off of the site."

Another self-described eBayer, Stan Lisk, told the E-Commerce Times that he and his wife Sue have always looked for other ways to sell their wares, from listing on Craigslist to selling directly from their own Web site.

"Unfortunately, eBay has the millions of followers and is still the best at bringing them in," Lisk said.

Beyond eBay

Some sellers are getting out completely. Corey Kossack, president of Club E Network used eBay for years to sell videos and DVDs. The site's policies and fees were one reason he left.

"I started an eBay business in 2005 that quickly became one of eBay's larger sellers," Kossack said. "In just two years, my company did $1 million in revenue on eBay."

When he spoke in front of the eBay Live Town Hall last summer, he specifically told the president of eBay North America, Bill Cobb, that eBay needed to reduce its insertion fees to reduce the risk of selling in the eBay market.

"After big applause from the audience, Bill said they would consider looking into it," Kossack recalled.

"Eight months later, they have done exactly that -- but now are jacking up eBay final value fees so high that they are driving sellers out of the market," he complained. "If you ask me, eBay is losing their way and is not looking out for its most important customers, and those are the sellers. Without the sellers, there is no marketplace full of great deals for consumers."

More than likely, eBay will continue to dominate for quite some time, Kossack acknowledged, but it will also experience major declines in its growth.

"Part of what fuels growth on eBay is the public display of eBay success stories, so that aspiring eBay entrepreneurs see the success and want a part of it," he pointed out. "But as eBay continues to make it harder and harder for even its top sellers to flourish, more entrepreneurs will seek out other avenues to run their businesses. They may go to other auction sites, or they may go to other sales channels or start new businesses entirely."

Kossack knows, of course, that for many sellers, there are no alternatives. The investment in time and inventory is too costly to maintain without eBay's promised volumes.

"I think it would take a company with a huge commitment and deep pockets to give eBay a run for its money," he said.

A Google (Nasdaq: GOOG) or a Microsoft (Nasdaq: MSFT) , for instance.

One thing is clear: If such a company were to step up, the issue of supply would likely not be a problem for it. Sellers feel less and less loyalty to eBay and many would drop it without hesitation.

"They'd come running," Kossack predicted.