eBay seems to be being a bit two-faced with their introduction to the feedback changes. The introduction to their changes reads:

The eBay Feedback system was designed to provide a simple, honest, accurate record of member experiences.

An honest record of member experiences. Not seller experiences, not buyer experiences. Member experiences. But, how can you say any system of feedback is fair when the first bullet point in the list is this gem:

Buyers will only be able to receive positive Feedback.

So, one side can say whatever it wants, and the other can reply with positive feedback. How is that an honest or accurate record of member experiences? Among businesses that facilitate trade between two parties, eBay has been rather unique in that it allows sellers to grade buyers. No more.

Shoestring theorists might want to check out the eBay forums. They are flooded with fears of buyers holding sellers hostage with feedback, competitors buying things from each other to damage each others’ credibility, and , somehow, this will cause the collapse of America as we know it. All of this is possible now (minus the America part), but rarely happens. I don’t think fear of getting a negative stops morons and scammers from misusing the feedback system. Sellers are using these conspiracy shoestring theories to avoid talking about their real fear: not being able to retaliate when they pick up a neg. I agree with them, I want feedback to be a two-way street. But I won’t hide behind fear-mongering to defend the current system.

Lets run through the rest of the list though, as there are a some good things in here.

Positive repeat customer Feedback will count (up to 1 Feedback from the same buyer per week.)

A needed change, as repeat customers are signs of healthy business practices.

Feedback more than 12-months old won’t count towards your Feedback percentage.

I’m split about this one. It’s good, because it provides sellers a reason to improve. Improving your track record on customer support can eventually wipe the slate clean as far as your feedback percentage is concerned. To some extent though, I think it waters down the value of a very high feedback score.

When a buyer doesn’t respond to the Unpaid Item (UPI) process the negative or neutral Feedback they have left for that transaction will be removed.

This isn’t a change and shouldn’t be in this list. To my knowledge, this has been policy for quite some time. I just realized I might have misread this one. Previously, the feedback rating for the transaction was removed (positive or negative), but the comment remained. Now, the entire thing will be removed as though it never existed. This still isn’t a big change as you had to really dig through feedback to find these kinds of things.

One of the few negative feedback I’ve left.

When a member is suspended, all their negative and neutral Feedback will be removed.

A minor, but good change. Unless eBay starts kicking accounts more often than it does now, I don’t think this will have a huge impact. It is an improvement over the existing policy where feedback was wiped out only if the user was less than…I think 90 days old.

Buyers must wait 3 days before leaving negative or neutral Feedback for sellers with an established track record, to encourage communication.

Three days, really. For many destinations, even if you ship the same day the order is made, you’ll be lucky if it gets there in three days. If you want to make this rule, shouldn’t it be at least five days to give a reasonable shot at the merchandise having arrived?

All Feedback must be left within 60 days (compared to 90 days today) of listing end to encourage timely Feedback and discourage abuse.

Meh. This isn’t a big change.

Buyers will be held more accountable when sellers report an unpaid item or commit other policy violations.

How? Like a number of things in this announcement, there are promises and threats of possible action, but no explanations or definitions. Given that I’ve seen shill bidders have their accounts re-instated, it’s hard for me to take this one seriously until I see it in action.

This is much like the changes to the fee structure, a series of small, beneficial changes offset by one massive negative change.

My hopeful anticipation of eBay’s changes in fee structure quickly turned to panic as I clicked through the links in the announcement email. My heart beat quickened, the room seemed to shrink around me, everything started to get a little fuzzy. I saw my business going down in flames, customers gaining all control over the eBay marketplace, fees devouring every hard earned dollar I make. It was the end, might as well start polishing up the resume and looking for a real job. That blog I was about to start, this one, kiss that idea goodbye.

Quickly scanning the official eBay forums, I wasn’t the only one seeing the virtual sky crashing down. The boards were flooded with righteously angry sellers.

After a day of crunching numbers and talking to others in the industry, I’m still not happy with what eBay has done but I don’t think it is the end of the world. This was a confusing change and so far I haven’t seen eBay handle it as well as they should have. (Hit the read link below for my in-depth analysis of what the new fees mean.)

I suggest reviewing eBay’s total changes, but for this discussion the most applicable numbers are a slight decrease in listing fees, a sizable increase in the Final Value Fee for the less than $25 tier and the addition of free gallery pictures (previously a premium charge).

I was quoted (anonymously) on one of ZDNet’s blogs yesterday saying I expected the fee changes were a smoke and mirrors attempt to hid a fee increase that would result in a 10 to 60 percent increase in fees for many sellers. In the worst case scenario, I still think that is true. After running last year’s monthly averages through the new fee schedule, I estimated that my fees would have increased by six to nine percent (depending on which PowerSeller discount I would have qualified for). With no PS discount, it came out to a 10.5 percent increase.

It’s complicated to figure out, but the people who are worst off are those who sell a high volume of items worth less than $50, have a high sell-through rate and use no premium services (like gallery pictures). This would represent direct increase in their fees of 40+ percent. The fee reduction on low value items is just too small to offset the large change in final value fee. For a $24.95, the listing fee was reduced by five cents while the final value fee increased by 87 cents. So previously, to sell this item on its first listing would have cost $1.91 ($0.60 list fee plus $1.31 FVF). Now, it would cost $2.73 ($0.55 list fee plus $2.18 FVF): an increase of about 43 percent in fees.

So, we know this represents a fee increase for some sellers, but does it also represent a fee decrease for others, as eBay has hinted at in previous announcements. Maybe. If you sell high dollar items, have to relist items several times before a sale or used Gallery Pictures on a regular basis, you may save money under the new structure.

The gallery picture represents $0.35 per listing. I’m honestly hesitant to even use this as a savings. eBay has needed to add free, standard gallery pictures to auctions for years. The web has moved on and eBay has lagged in the virtual dark ages by charging people to slap a thumbnail picture next to their auction title. But, it is a change for the better, so we’ll take it for what it is.

Anyway, let’s take a scenario where someone is selling a $250 dress and previously used a gallery picture. Under the old system, they would have paid $12.57 in total fees if it sold the first time it was listed. New system results in $13.06 total fees. Now, if this dress has to be relisted 3 times before it sells, the old system would result in $20.47 in fees. The new system: 19.06.

My final analysis is that eBay is shifting the burden of its fees to high volume, low dollar items. If that’s the kind of category you work in, expect to send more money to eBay this year. If you happen to sell slow moving, high dollar items, congratulations, you hit the eBay fee jackpot.

I still need to address the other changes in this update, like feedback and added seller protection (of which I am skeptical). Hopefully I’ll get to that in the next day or two.