They took a great business and destroyed it. It is just taking forever for the message to travel from their feet to their brain but eventually it will.

Obviously, the author has not actually used Ebay. Only one thing has changed Ebay from the perfect business a few years ago to a has-been operation today: GREED. Greed is not good, contrary to the "Wall Street" movie quote. There is a reason that most sellers now call the company, "Fee-bay". When you alienate the people that support your business, business can only go down.

eBay is dead. Anybody that buys the stock now has to be a total fool. The only reason why sales are up are due to paypal, and ebay has forced sellers into using paypal along side checks or money orders and even those options will not be available come Monday. I started selling in 2007 and never used paypal for a transaction but was forced to sign up for an account this April because I had feedback under 100.

Other changes feeBay has made over the past year or so:

1. Introduced Detailed Seller Ratings, and they use impossible to keep standards where a 4.3 would be automatic grounds for suspending a seller's account for 30 days. Most of that would be due to a seller thinking that shipping cost is too high or I didn't ship the item fast enough. DSR's are flawed to beging with, but including shipping in them is not the way to go.

2. Paypal could put a hold on any buyer payment at anytime. Holds can be 21 days or more unless shipment occurs/and or the buyer leaves positive feedback. Search AOL or Google for Paypal holds or just Paypal and you will find testimony against this practice. Personally, I have a hold against me because my DSR average has fallen below 10 DSR's over a year. Just one major problem, I was trying to sell, yet good buyers are leaving the site due to the insane changes eBay is making.

3. Changed feedback to where sellers could only leave positive feedback while bad buyers can hit sellers with negative or netural feedback.

4. Gave sellers a break by cutting insertation fees and other fees including gallery, but disguised it by increasing final value fees on the back end. Translation, it doesn't pay to post items for one cent or even 99 cents because you would lose money on the auction if there is only one bid or so.

5. Allow the big guys such as Buy.com to come in and post their listings for free or almost free and created a diamond powerseller level Buy.com. However, most powersellers would find it impossible to even attempt to reach this level under most standards, and about half of ebayers can be classified as being below the first powerseller level.

6. I mentioned this above but it has to be stated again; Monday October 20 is the day that eBay will stop allowing checks or money orders to be used as payment. This is like your friendly neighborhood mall telling you that you must accept this payment only or else.

7. Shipping costs must come down. That is one verdict from eBay. However, how would be be able to compete with the likes of Buy.com or Amazon.com. They want upwards of 20 to 50 cents total for shipping something as simple as a DVD movie or book while the US Postal Service would require about $2.50 and that is via their media mail service which is pretty slow unless you get to ship via First Class which is $1.75. Both prices are average. The only sellers that this helps are Buy.com which has a drop-shipper, or people like Wal-Mart or Amazon which both have physical distribution centers for items not sold by individual sellers.

8. Must mention this again. eBay has required us to sell over $10,000 or more in one day in order to establish a Diamond Powerseller level and keep it. These are impossible standards for even the best powersellers outside Buy.com. The diamond level comes with greatly reduced fees while the other side of things see a 4.3 or worse get your seller account suspended for 30 days. I heard that a lot of the available information says that most retail stores have about a 20-50% dissactifaction rating and wouldn't meet the standards set by eBay.

9. Last but not least, eBay has required us to post if sellers do or do not have a return policy. Hello, a lot of ebay's activities, at least in better days, come from small to medium sellers.

To summarize, to say that ebay is a stock that is worth buying is to ignore all the noise that John Donahoe is hearing from his customers who are the sellers. All that should happen is that we should be like Garfield the Cat and treat ebay like he treats Odie the Dog and that is to kick this stock off the table. This stock is a dog and there is nothing more to do with this except trash it.

Wow Jessy great informative post. I have been on ebay since 1998. I was not aware of all of the changes and negativity towards ebay. Thanks for the info.

I have been a buyer on eBay for the past 6+ years and will remain so for the years to come no matter what disgruntled sellers say or comment about eBay. It is time for eBay to get rid of bad sellers and that is what they are trying to do by introducing some of the fantastic changes such as return policy, reduction in fees and longer duration for fixed price items, etc.

It should be clear, I am a wholesaler and not a good writer or a stock expert, but I have a first hand inside look having been a powerseller almost from e bay start, for over 10 years, 1.7 million per year sales and account for $156,000 paid to e bay per year for seller fees, this is the bases in which e bay shows profit or loss in a great way for there core business, this does not account for paypal fees charged, seller manager pro, e bay stores. Buyers and sellers are leaving e bay, this can be proved by http://www.sellerdome.com/
It is interesting how the 1500 employee lay off received so much attention, however, the 10% of total powersellers were laid off/suspended because of flawed aggressive policy poorly implemented has not had a placement. This is proved by http://blog.sellerdome.com/?p=16 between 15k-30K e bay powersellers who account for $3000-$20,000 in seller fees paid each month for each of those sellers. This seems a larger story than a simple layoff of e bay employees. Ebay saves money by laying off paid employees, but e bays profit takes a hit by getting rid of partners who contribute to e bay profit. For example: 20,000 powersellers/partners laid off/suspended that account for an average of $5,000 per month seller fees = $100,000,000 each month in seller fees not received by e bay. That is $1,200,000,000 per year in revenue given up for aggressively flawed policy by current management. The idea current ebay management had was by getting rid of 10% of its selling partners was going drive back 32% of its buyers, however, that has clearly not been the case, because the policy change was flawed and implemented with such aggression over a short period of time, 6 months total, 320months aggressively. Ebay seems to have driven away buyers by this and the new search method that sellers or buyers don't like with no concern of management. The company has managed to drive its investors away in the same motion as stock prices show a drop since new management put in place 6 months ago, before market crash. Ebay management charged its sellers/partners for decline in its core business and seems not to have taken into account the increased competition of walmart, best buy, circuit city and many others putting marketing dollars into the online sector of business. Ebay pushing away its partners, sellers and buyers, is only going to make profit softer and push away investors. With 70% more competitors in the market e bay only dropped 30% seems a strong market hold for e bay and a reason to support its partners in a currently working policy rather than place blame partners and will prove to decline its future market share which is pointed out by many market analysis.

Ebay, through the wild west style new management, took a look at itself and realized it had a drop in the number of sellers buying on its site. It decided it was because of bad "buyer experience" and immediately, it seems without full thought of backfire, decided it was the sellers fault. In some cases, this may be true, but it is most likely because of the additions to online retailers such as walmart, bestbuy, circuit city and the lis t goes on that were not competitors before and had not sunk the marketing dollars into the Internet sector of there business plan before. The more big sellers the less customers for ebay. It is widely known that e bay has blamed sellers rather than external forces for the slow in sales. Instead of working within the community, that once believed that people are basically good, took on a policy that made its community fell like criminals and strong feelings of dislike for the symbol that was once regarded. Ebay has aggressively pushed away its partners will prove to decline its future market share and a relationship that may go un repaired when new management is called upon.
Ebay has withstood the .com storm because of a superior system and its ability to hold steady to the working core business policy. Its customers fell that is no longer the case and many companies like bonanzle.com and OLA.COM (onlineauction.com) are rushing to try to meet seller and buyer demands that ebay seems unwilling to meet. Many small auction sites have tried to compete in the past but been successful in driving traffic. Now a once complacent audience of e bay buyers and sellers are seeing the changes and the likely hood t hey are being driven away through aggressive, unfair, flawed policy changes and are taking note to change to someone with the old values that made ebay a community that worked. You can see from the chart below the demand that is being driven to for example.
http://www.quantcast.com/bonanzle.com
This is a small amount of buyers and sellers compared to e bay, but it does show a market who is hungry to meet the demand of current buyers and sellers, and what is maybe most important that buyers and sellers are finding the ability for change.

When e bay was a "venue", now it is felt by many of its sellers that it acts as an employer or landlord by design of new policy, it was profitable for sellers and a great value for buyers. Sellers drove traffic to the site because buyers knew they could get many of the items for a large percentage below retail, at or below wholesale. E bay is a follower now and is trying to make itself like Amazon and other .com retailers. Ebay sellers who use Amazon report little to no sales. E bay has a niche (wholesale products) and Amazon has a niche (books, CDs with unmatched distribution etc) and both worked independently of each other, this is why Ebay sellers are not successful on Amazon and Amazon sellers are not successful using ebay. New ebay management has had a hard time realizing Amazon is a different market plan. Many e bay sellers are leaving to do Amazon but it is feared this will not prove successful for them. The e bay system worked and most were satisfied, buyers and sellers could realize other bad buyers or sellers.
Buyers and sellers are not happy anymore and the numbers will continue to show as long as this management stays. Economy will play a roll, that is why ebay can't afford to gamble with management that has proven to drive its partners, sellers and buyers, away. The company is large enough it will be around for a long time, maybe not in the online auction sector effectively as it was before, but it is still a mystery to many who use or used to use the site why this management has been allowed to make this aggressive of a change. If this is where they wanted to go, it would takes years to change a company this size effectively, it can't be done in 6 months times and certainty not given a slow in the economy.
Things are not happy under new management/John Donahoe management has made no one happy, sellers or buyers or its investors. It has been a 6 month meltdown since new managemen t fumbled a working system.
I talked to the owner of onlineauction.com 1-800-900-2828, Rowen Grisham, a previous e bay powerseller who seen improper change coming long before many sellers and buyers realized. He said he had seen a flood of sellers and buyers calling to learn about the site in the last 4 months. Rowen Grishamw says they are about to roll out a goggle search program that will make it more visible. This is just one example of where e bay buyer and seller base is going. Grisham seems to want to supply its sellers and buyers with a fair service, as when the ebay site was born and acted as a venue rather than an employer. Small companies that are hungry and taking advantage of a situation where ebay is not satisfying its demand.
Anyone considering investing or putting time into future sales may want to take a look at the=2 0aggressive, flawed policy’s they have put in place, there are little to no direct policy as there has been. Sellers, buyers and investors wouldn't be leaving if there was any good reason to stay.
E bay has done a poor job or emplaning the new changes to its buyers, sellers only after a few months of effect, some loosing there e bay business because of improper, unmonitored data, is still learning and it seems no one knows the answers even at the top account managers level. Its buyers do not realize that the DSR DETAILED SELLER RATING, the 5 stars under the feedback rating is not based on a 100 point scale like every other system in the free world. For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With e bay, 4,5 is average and 5 is good, I am glad they didn't have my math teachers in Collage. So many times buyers rate a 3 when they don't realize they are giving the seller a unacceptable rating that could potentially suspend his/her account from e bay as so many has been suspended in the last 3 months because of improper data that has been now used as the bible of e bay to rate seller performance. It should also be noted that a flaw in the data of the 5 star DSR is that if a customer is happy, they fell that leaving positive feedback served its purpose and they have caused a positive vote to the seller, e bay has not educated the buyer, so they do not leave a star rating at all, and are not required to and a large % do not, but leave a positive feedback as it is not required. But the buyer who is mad and is leaving hasty feedback will be more than motivated to leave a 1 or 2 for all stars. For this reason, good sellers offering great service and products are being suspended from e bay by record numbers, this cuts the life cord of the seller as well as core business at e bay and the reason buyers come to the site and investors invest in the company.

Ebay may have ruined their market flair for both buyers and sellers forever. Too many restricting rule changes, increased charges, paypal demands, seller ratings. This has ultimately destroyed their bottom line.
Don't think eBay and its payment system engage in unfair, at the very least unethical or even illegal business practices? Retailers are asking for congress to crack down on organized computer crimes, but eBay, said "they would be unfairly targeted in the proposed legislation" Read article from link below:

http://news.moneycentral.msn.com/ticker/article.aspx?Feed=3 DAP&Date=20080922&ID=9174700&Symbol=EBAY

Many sellers, buyers and investors alike have a dedicated special interest and hope they turn themselves around, but it is going to take some quick and correct policy change back to the system that worked to undo what has been done in what would be considered by many as well as a powerseller account manager in a telephone conversation said that this is "the most aggressive change e bay has ever done" it is costing sellers there business and driving buyers away from the site. The Best Match search is fatally flawed and $0.35 listings are not going to fix that.

Sellers of the unique items that made eBay famous (and who paid listing fees) are leaving in droves, while eBay brokers deals with corporate sellers of new stuff you can get anywhere who don't pay listing fees deteriorate the profits. And their buyers are following them. Watch the Q4 and Q1 figures. A company of this size can keep up appearances for some time, but its customers, its customers customers, that is sellers and buyers, are speaking up and cannot be ignored in the long term, the leader of these policy's are and continue to drive away the core business of e bay and investors are taking notice.

E bay bought Bill Me Later, I would have been surprised just 6 months ago, but I am unhappy to report that I am not at this time, the reason is this management has taken down the tread that holds e bay together as can be seen by its buyers and sellers everywhere complaining about the flawed aggressive policies that have taken place over the last few months, maybe you have heard some of them or are one of them. Every comment citing that the previous system was not broken. E bay has had community and trust, this 13 year trust has been violated and has failed both sellers and buyers in just a few months of unfair, faulty policy change that has taken a ship this size and turned it so fast that it is out of control and is facing a challenge to bring the ship back to course as it was before in the core business, although still ignored by management at this time, this is just in the core business, this shows the danger of a lateral move like credit right now. Take into account there could't be worse timing as the world economy will not view this favorably given recent events. This policy change was over a short aggressive period, but the negative impact will make it difficult to navigate back in position, if this venture is not successful, it will be even worse for ebay, its investors, and20the management that follows. The core business has taken a great hit world wide, now it is committed to a market that is new. A new market during the time when its core business is in jeopardy due to flawed policy and a slowed economy with management proven only to drive away customers. This will prove a challenge that may take years to repair relationships of its sellers and buyers when it has been realized by investors concerned on top of unpopular credit service. Migration back to the system with effective proven 12-15 record, built by previous management over 12-15 years, seems to be the only way to save the future profits and stability the company once enjoyed.

So, e bay wants its investors to trust it in a huge risk buy, when the investors are clearly concerned and most can see that e bay can not run its core business in a way that is satisfying to its customers, causing them to leave, look for other suppliers that will eventually be able to meet demands of the once complacent sellers and buyers. Sorry, it would be hard for anyone with basic knowledge of the problems with recent policy of the core business to buy this, having been a seller and buyer for 10 years, it makes it even harder to buy. I can say, I am happy to report my family, who bought stock when they=2 0seen my success on e bay, sold there stock when I explained the new managements flawed, unfair, and aggressive policy handed down. The stock has followed since this and many are betting with there dollars fell it will continue to fall. Maybe Jim Cramer, hyper as he is, has a point when he said he could not get behind the company, and that someone should buy the company "and put them out of their misery." It is hard to argue with him, stock sold back in march, when these policies were being talked about, not yet implemented agressively, sold ebay seems to be the smart move. Stock was $30-$32 per share at that time, March 2008, it dropped every since as can be tracked from any stock quote chart. Yes, the economy took the abrupt hit, stock price had already plummeted by 1/3, $19-$22 per share, before it happened that our country was in trouble from bad credit/debt. Some say they wouldn't want to touch this a credit market at this time. I would also not want to answer to shareholders when they learn what long time sellers and buyers have seen in the past few months. Good thing for golden parachutes I guess, maybe that will soften the fall?
I think this report on NYtimes has some good in site of the problems facing the company with the current buy:

http://bits.blogs.nytimes.com/2008/10/06/ebay-plays-warren-buffett-buys-online-lender/#comment-55807

ebay gets what it deserves. they have put small town antique stores out off bussniesss and there just like eron. i just what and hoping the bubble will buesrts and the sink like a rock, it good for the crooks.

PUT A FORK IN IT!
eBay has been reading these posts for MONTHS & have done NOTHING to generate NEW Sellers but have succeeded in driving Sellers away from eBay with reckless abandonment! Buyers don't TRUST email because eBay has FAILED to address the Identity Theft on eBay & PayPal...
Buying this stock at this point would be like buying a ticket on the Titantic! Listing on eBay is like throwing your money out the window with the NEW FEES & NEW ONEWAY FEEDBACK rules!
Buying something on eBay! "At your own risk"...........IMHO

This blog is brilliantly informative and extremely well written as are the follow up comments.
I have used ebay a couple of times and have to say that the people who I have bought items from have been reliable and trustworthy. I would say however that I dont trust emails supposedly coming from ebay as there are so many scams but thankfully I am not stupid enough to fall for it. There is apparently a new site available called nirelandmumsonline.co.uk and this seems to be able to provide a reliable, trustworthy service to its users. I am happy to keep using ebay and always have my wits about me.

It doesn't take a genius to know that an online selling site will see an increase in sales as the holiday gift giving season goes into full swing ! How do you say a stock is still worth investing in when the time downslide began can be directly connected to when a new CEO and a multitude of unfair, unbiased & greedy policy & rate changes go into effect. Ebay is looking at other acquisitions because it knows it must, Ebay alone is faltering miserably. Ebay now needs the other ventures as "tugboats" to pull the broken Ebay ship along as it's engines shut down one by one. They wish to "pretend" to the public that it is healthy by buying other companies, a false impression. Ebay is laying off staff & having to use over 1/2 ofit's available revolving credit to make it happen, no different than losing your job and then paying your mortgage with your credit card. When the income still isn't coming in the next month, how are you going to pay both the mortgage AND the credit card payment ?
Until Ebay changes it's management & policies back, it will continue to go downhill, it's newly acquired side ventures along with it. Take care of your people Ebay & they will take care of you !!

I think Donahoe is going to be famous - for being infamous - he's managed to do a great job of developing a negative branding - EBAY is now the company that folks love to hate, word of mouth built EBAY, it'll be the end of them too. Their inadvertant negative marketting has developed a huge momentum - and the company is not suddenly going to reverse trend and skyrocket. I can see all this in future business courses on how not to market. The Donahue Effect may be a good name for the course - his name may even enter the vernacular as a term to describe how galloping incompentence at the top sinks even the biggest ships.

TIME TO GO DONAHOE!

http://www.petitiononline.com/jdonohoe/petition.html

"Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO"

PLEASE share this info anywhere & everywhere!

Time To Go Donahoe!!!

Search the internet for:

"Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO"

(at petitiononline) to read the comments from other ebay/Paypal users and to SIGNTHE PETITION.

Please share this information with others!

Gary, great piece. Tim, nice comment & analysis. Sellers are definitely getting more & more frustrated with eBay's 2008 seller policies that started in January but were not fully implemented until May. Business Week did an October article entitled the Growing Frustrations of eBay Sellers at http://www.businessweek.com/smallbiz/content/oct2008/sb20081021_503608_page_2.htm

If you are frustrated with eBay's seller policies & still haven't given up on them, there's a petition to pressure & boycott eBay's changes with its seller policies at http://www.thepoint.com/campaigns/boycott-ebay-for-fair-seller-policies if you'd be interested in joining. My mother is a small, at-home seller, but her frustrations encouraged me to sign up and at least try to make some sort of difference with eBay. The petition is challenging the following -- all sellers having a lowered listing fee; a higher final value fee; and no recourse when it comes to fraudulent, non paying bidders as sellers won’t be allowed to leave any negative or neutral feedback for any buyer. I'm trying to help spread the word.

Thanks from a cold day in Chicago.

Great article. I believe that even if eBay suffers very much from this recession due to dollar decline and sales declines, there is a fair chance for its subsidiaries in other countries to still continue the business.
Emerging countries like China and India are the best next markets that can make eBay better. But the company as a whole will not benefit from this.

thanks,
-fornls
http://www.bizcovering.com/Investing/Do-You-Sell-Shares-in-Panic.50511