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Filed in: General Announcements

A Message from Bill Cobb

Bill Cobb

Hello everyone…I’d like to share some important news on pricing and other changes that we’re making to the marketplace. Some of you may have joined me this morning via Webcast and listened to my keynote address at the eCommerce Forum in Washington D.C. I’d like to provide you links to pages on the site with details about the upcoming changes.

Our goal for these changes is to continue to improve the overall experience for our customers – both buyers and sellers. That’s why we’ve decided to make fundamental changes in big areas like pricing, seller standards and incentives, and Feedback.

Pricing
The first of our big changes is in pricing. We’re making a fundamental change to the economics of selling on eBay, resulting in three significant price reductions, effective February 20:

  • First, we’re reducing the up-front risk for all of you by lowering insertion fees for auction and fixed price listings across the board…and we’re balancing that change by adjusting some final value fees. We will take a similar approach with Store Inventory Format listings.
  • Second, we are making Gallery freeat last!
  • Third, we are going to create tiered pricing for Featured Plus, which will make it more accessible for to sellers.

All of these changes came as a result of listening to your ideas and concerns … You told us that you want free Gallery. You said you’d prefer fees for success, not listing. But more than anything, you told us that our overall pricing structure is simply not working for you, and that high insertion fees, in particular, have been a big deterrent in moving more of your merchandise onto eBay.

We know you have other choices for selling venues … but we think these pricing changes – in addition to eBay’s unmatched volume and traffic – will make our total value proposition “best on the Web.”

Please read our Overview page for more specific details. You’ll also find important information about changes to our Reserve fee pricing, our new minimum BIN start price for fixed price and Store Inventory format listings, as well as additional fee reductions for several additional listing upgrades.

Seller Standards
In addition to pricing changes, we’re making the minimum standards for selling on eBay more stringent, primarily to discourage bad seller behavior on our site. And we’ll do this in 2 key ways: through decreased listings exposure in search and safe payment requirements.

Starting in February, we will decrease listings exposure in search for the relatively small number of sellers who have a high buyer dissatisfaction rate and low DSRs over the last 30 days, especially for charging excessive shipping and handling.

Second, we will be requiring sellers with high buyer dissatisfaction rates to offer a safe payment option.

Last year, we started requiring all new sellers to offer PayPal or a major credit card as a safe payment option. This gave buyers a higher degree of protection when they transacted with sellers who had little or no track record.

This year, we’re expanding this requirement to include a small number of sellers who have the worst rates of buyer dissatisfaction or who have less than 100 total feedback.

My colleague Jim Ambach, VP of Seller Experience, will deliver more details, including how we calculate buyer dissatisfaction.

Seller Standards – For PowerSellers
We’re also going to raise the bar on what it means to be a PowerSeller – we want the PowerSeller icon to really mean something to buyers and sellers. Given that this program has historically only required a certain level of sales and a 98 percent positive feedback rating, a number of our buyers have complained that there’s not a consistently great experience when they’re buying from PowerSellers.

We’re going to change all that by making PowerSeller status a competitive advantage … and it all starts with setting a higher bar for sellers using their DSRs.

We’re going to give you some time to do this, but starting this July, you will need to have a minimum 4.5 score in all four DSR criteria over a 12-month period to be designated as a PowerSeller (or remain in the program).

Incentives for Great PowerSellers
For PowerSellers who meet or exceed our standards, we’re going to make sure they are rewarded for delivering great customer service. And we’ll do this in three major ways:

  • Discounts for PowerSellers (for the first time ever!)
  • Better payment protection for PowerSellers
  • And for all qualified sellers, greater exposure for listings in search

Fee Discounts
Let’s start with the fee discounts for PowerSellers … Beginning with your April bill, we’re offering two levels of discounts for qualified PowerSellers that will be based on Detailed Seller Ratings you have received over the last 30 days:

  • For those with a 4.6 and above on all four DSR criteria, we’ll give you a 5 percent discount off your final value fees.
  • And for PowerSellers with a 4.8 and above, the reward is even better: 15 percent off all of your final value fees.

PayPal Enhancements
You’ve also asked us for a number of changes with the way you do business with PayPal. We, and our friends at PayPal, have heard you and I think you’ll be happy with what we’re going to do for you.

Starting in February, PayPal will dramatically improve seller protection for PowerSellers. Currently, PowerSellers are already protected against unauthorized and non-receipt claims and chargebacks. With expanded seller protection:

  • PayPal will no longer require that PowerSellers ship to confirmed addresses for items sold on eBay. Every address in the PayPal system will be considered a confirmed address for PowerSellers.
  • For PowerSellers there will no longer be an annual $5,000 limit on seller protection…you’ll have unlimited protection coverage.
  • Also starting in February – seller protection will be extended to cover transactions with buyers in many markets around the world (instead of only to US, Canada and the UK). Now PowerSellers can sell with confidence to a much larger group of buyers.

Finally, the Unpaid Item Protection Program that refunds feature fees to PowerSellers in the event of an unpaid item will become a permanent benefit of the PowerSeller program. What’s more, in addition to auction-style listings, we will also be extending this protection to single-item fixed priced listings.

For details on these PowerSeller changes, see our PowerSeller page and FAQ.

Incentives for All Great Sellers
In addition to these economic rewards for our PowerSellers, we’re also going to be giving all great sellers an advantage in terms of increased exposure for listings in search.

We’ll be doing this specifically for “Best Match” search results. As you know, we rolled out Best Match last year, and it’s one of the sort methods we’ve provided that allows buyers to find relevant items faster.

Since we rolled it out as a search option, we’ve seen that Best Match helps buyer conversion more than any of our other sort methods. That’s why, starting in March, it’s going to become the default sort method site-wide.

And there’s one important enhancement that will make it even more useful to the buying experience. We will begin using Detailed Seller Ratings in the Best Match algorithm to differentiate between sellers who provide a positive buying experience and the small percentage that don’t.

Here’s how it’ll work: Great sellers, as defined by high DSRs within the last 30 days, will get higher visibility in search results than sellers who have lower rates of buyer satisfaction.

With this key change, we are effectively linking search with seller performance. Of course, the algorithm for Best Match will continue to include factors like “Time Ending Soonest.” But we believe that also exposing the listings of our most trusted sellers more prominently will help drive noticeable improvement in buyer satisfaction overall.

Introducing the Seller Dashboard
Let me tell you about a new tool we’re going to give you starting in May that will help you monitor your performance on eBay.

We’re going to be rolling out to all eBay sellers their own personalized Seller Dashboard, and it’ll include information about:

  • PowerSeller status
  • Account billing status
  • Final value fee discount qualification
  • Policy violations and risk of restriction
  • Buyer satisfaction (based on feedback, DSRs and complaints)

This Dashboard will give you an at-a-glance look at your standing, and should help you manage your business more efficiently. You’ll basically have the same view as customer support, so there should be no more complaints about not knowing where you stand at eBay.

Evolving Feedback
The final set of changes I’d like to share with you concern Feedback. There’s a lot of passion – in the Community and in the company – around the Feedback system, so I think it’s important to remember our ultimate goal: We are evolving in many new areas so that eBay remains a vital, thriving marketplace that buyers will prefer over all the other choices they have on the Internet today.

To give you some background, the original intent of eBay’s public feedback system was to provide an honest, accurate record of member experiences. Over the years, we’ve adjusted the system to add non-public means of providing feedback to try to improve its accuracy. For example, we instituted Unpaid Item Reports in 2006, and that has helped us to hold buyers accountable.

But overall, the current feedback system isn’t where it should be. Today, the biggest issue with the system is that buyers are more afraid than ever to leave honest, accurate feedback because of the threat of retaliation. In fact, when buyers have a bad experience on eBay, the final straw for many of them is getting a negative feedback, especially of a retaliatory nature.

Now, we realize that feedback has been a two-way street, but our data shows a disturbing trend, which is that sellers leave retaliatory feedback eight times more frequently than buyers do … and this figure is up dramatically from only a few years ago.

So we have to put a stop to this and put trust back into the system.

But I think – and I’m sure you’ll agree – that the most compelling reason we need to change feedback is so that buyers will regain their confidence on eBay and they will bid and buy more often.

We explored a number of solutions, and talked to eBay’s founder Pierre Omidyar, who created the Feedback system. He agrees that bold changes are required to fix Feedback. And that’s exactly what we’re going to do … here’s the biggest change, starting in May:

Sellers may only leave positive feedback for buyers (at the seller’s option).

I know this is a huge change, but we’re also putting into place protections that sellers have wanted for years. In addition to holding buyers accountable via non-public seller reporting tools, such as Unpaid Item reports, we are planning a number of other Seller Protections against inaccurate feedback:

  • We will remove, not just de-score, negative and neutral feedback when a buyer doesn’t respond to the Unpaid Item process
  • We will remove all negative and neutral feedback and comments when a buyer (or seller) is suspended. We will also do this retroactively – which means any negatives and neutrals you’ve received from members we’ve ever suspended will be removed.
  • For sellers with an established track record, we’ll prevent negative and neutral feedback within 3 days of listing end to promote communication.
  • We’re going to reduce the number of days a member can leave feedback from 90 to 60 days.
  • We’ll increase block bidder list capacity from 1,000 to 5,000 user IDs.
  • We’ll increase our monitoring, and take action based on seller reports of buyers behaving very badly.
  • Feedback percentage will be based on the last 12 months, although the total count remains lifetime. This means that any negative or neutral feedback left for you more than 12 months ago will no longer affect your percent positive.

For more details, please see our information page.

Repeat Feedback Credit
The last change to Feedback that I think you’ll love is that beginning in February, we’re going to give all members credit for multiple purchases with the same buyer or seller when the listings end in different weeks. Sellers will now get the credit they deserve when their great service and selection results in repeat buyers.

I know that all of the changes we’re making in pricing, seller standards and incentives, and feedback are big ones … and that not everyone will like them. But the overall package is what you should focus on … and the overall package is strong.

I think we’ve demonstrated that we’re committed to making improvement to the overall customer experience – and that requires higher standards and bold changes.

That said, the vast majority of our changes work to strengthen our relationship – and they’ll be great for the marketplace as a whole, and certainly great for many of you.

We’ll be sharing archives of both event Webcasts on the General Announcements board. I’ll also be hosting a Town Hall on February 4th at 3:00 pm Pacific time, and I hope you will join us.

* * *

In closing, I want to let you know that this will be my last Announcement Board post. As you’ve probably heard by now, I am stepping down now as President of eBay North America and retiring at the end of this year.

But before I sign off, I want to tell you that in my seven years at eBay, I’ve come to know and respect a great many of you, not just for how you handle your business, but also because of your loyalty. It’s obvious to me that you care as much about our marketplace as any of us at eBay do – and that has made my job such a pleasure.

You’ll continue to see and hear from me as I help Rajiv, Lorrie and their teams transition, but I’d like to take this opportunity to tell you – and the entire eBay community around the world – how honored I am to have known you.

You’ve made my time as president incredibly rewarding and memorable … It has been a privilege.

Sincerely,

Bill Cobb
President, eBay North America

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