• Fixed-price listings would be favored over auctions.
• A new fee structure would drop the cost of listing an item but increase eBay’s cut when an item sold.
• A new search engine algorithm would give top billing to items based on price and customer satisfaction rating.
• Seller feedback to buyers would be eliminated.
• Fee reductions for highly rated sellers, fixed-price listings, and sellers offering free shipping would be implemented.
Donahoe claimed that all these tactics helped align eBay’s interests with those of its best sellers. But the moves also created tension
between two groups of sellers that had been growing apart for years. The traditional eBay seller sold typical flea market wares, including used, vintage, antique, and homemade items. These sellers typically included mom and pop operations that dealt in low to moderate volumes. These merchants gave eBay its start and continued to be a sizable portion of eBay’s business. Such sellers were a sharp contrast to eBay’s high volume Powersellers. These sellers were often major operations employing dozens if not hundreds of people. They most often sold new, refurbished, or overstock items in bulk. High volume sellers sold tens of thousands, hundreds of thousands, and even millions of items on eBay every year. Traditional sellers complained that the new strategy favored the big merchants and made it harder for the little sellers to do business. Lower volume sellers could not afford to invest the time or money to raise their ratings. Because the items sold by traditional merchants were difficult to price accurately, open auctions were much more effective. And whereas the new fee structure decreased the selling costs for high-volume sellers, it increased the selling costs for most traditional vendors. As a result, many sellers began to look for other venues to peddle their merchandise. Traditional sellers voiced their concerns to executives at shareholder meetings and seller conventions. Some sellers even organized a brief boycott. It became increasingly clear
that eBay’s turnaround strategy had generated an identity crisis, with its 25 million sellers caught between the images of the classic
seller that had made eBay an e-commerce giant and the more corporate merchant that was thriving on the new eBay. “EBay used to have a very distinct community culture,” said Skip McGrath, author of nine books on how to make money on eBay. “Now, it’s like eBay doesn’t know who it is.” Donahoe responded that the managers at eBay knew there would be fallout, but that the transformation was essential. “We have to create a marketplace where we’re helping our sellers give our buyers what they want,” he said. He added that he strongly believed that buyers wanted a fixed price, quick service, and free shipping.