I should start with the caveat that I am not generally a moaner. Working in both corporate America and corporate Europe, I understand the challenges large businesses face to become leaner, meaner, more cost effective and more resilient. Understanding these challenges gives me a unusual insight into why companies take actions which often seem, to the end consumer, heartless, rash, reactionary or just plain old senseless.eBay however has forced me to break the rules. Over the last couple of months in the UK, eBay has been making changes to the way in which sellers can charge postage fees. Since last year, eBay has imposed maximum postage charges in categories, and the business logic behind this is just about tolerable.
It goes back to sellers abusing the postage system. For many years, across both the Americas and Europe, sellers have been “cheating the system” by charging say $0.99 for the item and $18.99 for postage. The net result? Two fold. Firstly, the seller does not have to pay final value fees on the $18.99 because it is technically postage, and secondly in the event of a refund for an unwanted item (in which postage is non-refundable), the buyer would simply receive their $0.99 back.
So eBay clearly thought long and hard about this one and came up with the detailed seller rating system. This is a great system, which allows for a more detailed feedback on the seller, in terms of speed of postage, cost of postage, item description etc. Each of these categories can be marked out of 5 stars. eBay's plan for this was simple... they would penalize sellers who had a poor postage cost rating by limiting them in one way or another, for example using maximum postage restrictions.
For some reason, this either never took off, or took off for a very short amount of time because before sellers knew what had hit them, this logic had been applied seller-wide... and postage restrictions had been imposed. It was a bad deal for sellers, simply for the fact that sometimes, on some items, postage just costs more.
So eBay reverted from an idea which would have allowed sellers to moderate themselves, via the rating of buyers, to a system which in effect penalized everyone. Still at this stage I did not blog. I could understand eBay's reasoning for doing this, the smart business logic (in being able to charge more of a FVF) and the possible legal avenues opening of discrimination based on a sellers feedback... I could just about understand.
Then it happened. Earlier this year some categories started imposing zero postage fees allowed. This is a complete scandal, and I'm not even sure it is legal. The books category for example has just been zero rated. This means that you must offer free postage, and build the postage into your item value. The net result is a vast amount more money for eBay in final value fees, as the item is now 100% chargeable. It truly is an unashamedly greedy ploy.
For sellers, this means increased fees, and an untrue reflection of an items value. If the whole item cost is built in, postage costs become opaque. As a seller I pride myself on being able to quote accurate postage, and guaranteeing on the auction that they will only pay for the postage plus a very small surcharge in packaging. I guarantee that if it costs me any less to post that I will refund the extra. That avenue is now closed.
For such a pioneering company like eBay to do something like this is bad for everyone. It's bad for the buyers, for the sellers, for the economies in which eBay operates, and for the Internet as a whole. Just because eBay does have a markable monopoly on online auctions, they have clearly become a law unto themselves... and when any company does this it represents the very worst of human nature, that of greed.
