Leadership & Changes at eBay

Generally, whenever a new leader takes over an organization, he/she also implements new policies and procedures. It’s called “ making your mark”. This usually causes those affected by the changes to scramble and adjust or in some cases, leave the organization.

Thus it is not surprising that sweeping changes are accompanying John Donahoe, who will officially take over as eBay’s new CEO on March 31. Nor is it surprising that many dislike the changes that are being implemented.

Some of the most controversial changes involve the new final value fee (FVF) increases, detailed seller ratings (DSR), and eliminating seller feedback for buyers.

EBay buried the final value fee (FVF) increases under the news that gallery photo fees would be eliminated and that insertion fees at certain levels would be reduced. However, after doing the math, many eBay sellers learned that their costs of doing business on eBay would increase, and that their ability to be seen in eBay’s searches would be affected by the detailed seller ratings (DSR) left by buyers. While at the same time, eBay would be eliminating sellers’ options to leave neutral or negative feedback or ratings for buyers or transactions.

The Deutsche Bank teleconference with the Internet Merchants Association (IMA) on February 6, 2008, was particularly enlightening about eBay’s changes. Ben Mandell, Vice-President of the IMA, predicted that many eBay sellers would see their DSR numbers decline and consequently their visibility on eBay decrease as newly enboldened buyers leave lower ratings for them. Mandell said that he thought that the ratings for eBay sellers would not exceed the ratings of the top rated department stores in the American Consumer Satisfaction Index (ACSI). In 2007, The ACSI ranked Kohl’s at 79% satisfaction and Nordstrom at 80% satisfaction.

All of these changes mean that eBay sellers have or are looking at other sites including setting up their own.