And yes, it was kind of like the "wild, wild west". As there always is, there were a few dishonest or unscrupulous sellers, but they usually didn't last very long, as the feedback system alerted buyers as to what kind of seller was offering the product before they made a purchase. There was also the occasional dishonest buyer, who likewise found quickly that negative feedback comments severely limited his ability to buy from other sellers on Ebay. The occasional "real" mistakes and misunderstandings, when they happened, were usually worked out in a cordial manner. The selling fees were very affordable, usually amounting to between 3% and 5% when all the factors were added in. Basically, sellers were happy, buyers were happy, and Ebay made a ton of money.
Sometime between 2005 and 2007 things began to change. Not all at once, but by little bits at a time that kept adding up, and adding up until all of a sudden Ebay wasn't the same fun, profitable place for most any more. And then it got even scarier.
Today, a trip to the Ebay Community Seller Forums is an eye-opener. A majority of the discussions revolve around how deadbeat buyers are now common, scamming by buyers has transitioned into an art, there is almost no customer support for sellers, and an automated "Customer Service" system that usually sides with buyers and will almost automatically process refunds to buyers for the flimsiest of reasons....if any reason is given at all. Sellers are hit with being charged shipping both ways on many returns, after initially being charged a 10% fee on the shipping to begin with (a fee...by the way, that is not refunded when the item is returned). On top of that, buyers have 180 days to return many items for that refund, hence the graphic at the top of the page, which was "borrowed" from a posting at the sellers forum. Having a Prom? Buy a dress of your liking off Ebay, wear it to the prom, then a couple weeks, or even months later return it for whatever reason. At most the buyer might have to pay the shipping back to the seller. Want to read a new book? Buy it on Ebay, read it, return it. Halloween Costume? Why not. The opportunities go on and on. Scammers have taken notice.
Mention Ebay to vendors at a Flea Market or Antique Mall today (the very people that initially made Ebay into the giant it is today) and one will quickly see just how deeply this distrust of the company actually has gone. Very few will have anything good to say about the company. Most are using alternative venues even if they are still using Ebay. Many have simply gone in a different direction completely, and not looked back. And most will tell you, when they sell elsewhere, they also buy elsewhere. "Ill Will" is not a word most businesses like to hear because it is very, very hard to overcome once the label has been attached.
In my opinion many factors contributed to where they are today, but like boiling that frog in a pot, the heat rose gradually in steps and was unnoticed early on. Today it is boiling.
Factor number one: Greed. What were initially perceived as very fair (and profitable) fees were slowing tweeked, re-tweeked, then new fees added on, all in the name of "improvements". Yes, Ebay had an obligation to maximize profits for the shareholders, but it also had an obligation to balance those profits in a way that still retained their customer base (the sellers). Some of these fees were shameless in the explanations Ebay provided as the reasoning behind them. An example is the 10% fee on shipping charges, which sellers have no control over, because a very few were scamming Ebay by offering an item at very low cost such as a $50 item for $2- which normally the Ebay fees would apply to - then making it up by overcharging shipping costs - which did not have any fees attached to. Instead of ridding themselves of these very few unscrupulous sellers, Ebay saw an opportunity and simply attached the same fees to the shipping charges across the board. The end result is a $10 item sold with $10 in USPS shipping charges just doubled the amount paid to Ebay, going from roughly $1 to $2 in "final value" fees. Multiply that by millions of sales a week and you're talking real money.
Again, one step at a time, Ebay has evolved into a company today that completely controls what is sold through them, controls the returns process, controls how communications between parties are handled, controls the payment process, controls the refund process (without seller input in many cases), controls the amount of shipping that can be charged in many instances (forcing some items to be shipped at a loss by sellers), and even controls when the money can be paid to the seller for his own merchandise.
Another way to look at Ebay today? They are using the inventory of millions of sellers (without any investment in that inventory) to build their market; using the labor of millions of vendors to photograph, describe, and post that inventory on their website; collecting the payments with a guaranteed profit margin percentage as a fee for every sale, and using their own discretion - not the owner of the merchandise - how and when to offer returns, all while using their own discretion of when to offer refunds and automatically charge it back to the seller. Is that a service? Or is it a company using another's inventory, another's labor and another's capital to turn a profit?
Slowly several competitors appeared with similar pricing, some even cheaper. But Ebay owned the market of online auctions from private parties.
Amazon back then began as an online book store. Within several years they expanded into CDs, DVDs, Computer Products and other related items. Initially what gave Amazon a web advantage was the venue: they could offer 2 to 3 times the offerings of a normal "brick & mortar" book store, while at the same time saving the customer a drive to that store. They owned, or controlled, what they sold...offering a combination of variety, price and convenience. The concept, like EBay's, exploded.
Amazon expanded the concept into other merchandise. They bought other online providers such as Drugstore.com, Pets.com, Gear.com, Homegrocer.com and dozens of other companies. They also built or bought fulfillment centers to control the supply line and shipping efficiencies. Amazon used their own inventory, their own labor within the supply chain, and their own capital to continue to grow. By 2001 they had revenues of over one billion dollars.
They later expanded into allowing others to use their format to sell product through, for a fee. In most instances this was brand-new merchandise offered by dealers or manufacturers. Ebay took notice.
As Ebay became more expensive, added more and more rules & regulations, and began being perceived as hostile to sellers, many of EBay's seller base began to move part of their business elsewhere. As sellers moved, so did many buyers. Sellers could sell items for less money and still make the same profit, based on the reduction in the amount of fees being charged. Buyers liked this. Ebay seemed to have a deaf ear to what was happening around it. They were, after all, the biggest....a fact often brought up by their Customer Service Reps when one spoke with them about a problem. Size matters, they said, so its "our way or the highway".
Today, Ebay ranks 5th in Seller Satisfaction according to the 2015 EcommerceBytes Sellers Choice Marketplace Survey, ranking behind Etsy, Amazon, Bonanza, and Ruby Lane.
The competition is here to stay. and customer satisfaction also matters, and Ebay seems to not realize that the revenues they receive are from sellers, not buyers. It will be interesting to see what direction the new leadership at Ebay will try to take. It may be too late.