eBay: Restrictions on Sellers

In the fall of 2008, eBay made several changes that greatly affected the way sellers do business. We've already talked about the fact that eBay is forcing electronic payment for purchases with the goal of eliminating paper methods such as checks and money orders. Some visitors to this blog have added comments discussing their concern about this new rule.

Here are some other things eBay is doing.

1. Shipping charges - eBay is encouraging (and forcing in some cases) sellers to keep shipping costs to a minimum. Extra incentives have been added through the end of 2008 for sellers if free shipping is offered. Sellers are supposed to define exactly what shipping charges will be up front.
2. Descriptions - eBay is encouraging more complete and accurate descriptions of items.
3. Return policy - eBay is requiring sellers to define a return policy. Sellers are not forced to accept returns but they must state their policy.
4. New eBay fee structures give sellers more incentive to consider using the fixed-price ("Buy It Now") format as opposed to the auction format.
5. Detailed Seller Rating (DSR) - eBay is placing much greater weight on the DSR ratings that buyers assign to sellers through the feedback process. The four DSR categories are:
   
   - Item as described
   - Communication
   - Shipping time
   - Shipping and handling charges
   
   A buyer may assign a score between 1 and 5 (with 5 being best) in each of the four categories for each eBay transaction. This is so important to a seller that we ask buyers to let us know why if we did not earn a score of 5 in each category. We're not trying to intimidate buyers but we need to know what we did wrong so we can do better next time. eBay only gives sellers their overall average score and does not give any reasons to the sellers. 5's are very important! Multiple buyers assigning ratings below 5 can have a severe impact on a seller.
   

As a footnote to this discussion, buyers should be aware that eBay and PayPal charge fairly significant fees to sellers. Several parameters affect the ultimate fee. Taken together, eBay and PayPal fees top out at around 16% of the sales price for an item sold on eBay and paid for through PayPal. This includes fees not directly related to a sale.

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