Thoughts From The Cake Scraps

eBay is once again changing the way it does business by adding more restrictions to its sellers.  Remember when eBay added in the features that allowed a buyer to rate a seller on several categories?  Well now eBay is using that as a basis to say if sellers can continue to sell.

This excerpt from BizWeek illustrates it quite well:

In a nutshell, eBay wants its sellers to keep a 4.3 or above (out of 5-star) composite average on several metrics on which customers leave feedback. The most controversial is the shipping and handling feedback. A 4 in this metric means “reasonable,” but if a seller starts getting mostly 4s, eventually that will pull her overall rating down below 4.3. If a buyer rates the shipping charges as “neutral” (3) or “unreasonable” (2)—even if that perception is mistaken—the seller’s ratings will plummet and her account can be suspended. Sellers do have 30 days to increase their rating while they’re suspended, but if they’re not selling, it’s obviously tough to get better feedback.

It is clear that eBay really does not want to be in the auction business anymore.  These new rules make it very difficult for sellers, and exceptionally difficult for low volume sellers, to stay compliant.  All it takes is one or two disgruntled buyers and you are screwed.  I am glad that I got out while things were still not all that bad.

These sort of changes make me wonder though.  A business always has to be evolving or they risk being left behind.  You have to find new opportunities or niches to fit in to have growth.  But what if you lose your core competency while doing so?  Are you so focused on growth that you would risk the thing that made you great?

eBay was known as a place for auctions.  That was what they were good at.  As they move toward a model that is now focused on Fixed Prices not auctions, I think they are giving up more than they realize.  It is easy to blame the lower profits on the economy now, but I would think this would be a time for eBay to shine.  People are selling stuff they don’t need and also looking for stuff at a good price.  As eBay continues to make these changes I wonder if the current economic circumstance is clouding eBay’s view of the business model they are chasing after.  Then again, maybe eBay is positioning itself to take on Amazon.  This could get interesting.

This has been a Thought From The Cake Scraps.