Internet auctioneer eBay, responding to protests, reduced a new fee and suspended plans to change bidding policies for some items.
eBay had notified users Friday that, beginning Aug. 30, it would charge sellers US$1 for "reserve-price auctions," where sellers set an undisclosed minimum price, below which they will not sell the item. EBay also said it would require sellers to set opening bids for reserve auctions at 25% of the specified, or reserve, price. Sellers say they use reserve auctions to protect themselves from having to sell an item for an unreasonably low price, particularly when eBay suffers computer problems. "A reserve protects you from losing your investment," said Louis Santucci, a Washington, D.C., lawyer who buys and sells collectibles through eBay.
Users frustrated But the announcement unleashed protest from eBay sellers, who questioned eBay's motives and complained about what they considered meddling in their auctions. Discussion boards on the eBay site were jammed with complaints during the weekend. Some sellers said they would shift auctions to other sites.
eBay founder and Chairman Pierre Omidyar appears to have fueled the firestorm with an open letter to users posted Saturday, describing the fee as "only a dollar," and suggested sellers would recoup the charge with a higher sales price. Omidyar's letter was removed from eBay's site Sunday night, adding to suspicions among some eBay users.
"It's a money grab," complained John J. Christopher, a New Jersey video producer who says he sells 10 to 15 items a week on eBay. "Their only concern is not reserve auctions, but the bottom line for their stockholders. "
'A modicum of a compromise' None of these problems have slowed eBay's growth. Sellers stuck with eBay because it is the busiest online auction site, providing the largest group of potential buyers and best prices on the Internet. Two weeks ago, eBay Chief Executive Margaret Whitman said the company's daily auction transactions were almost US$7 million a day, roughly 40 times that of its nearest competitors.
eBay said it was acting to protect buyers, who complained that they did not know when items offered for sale carried reserve prices. An eBay spokesman said the fee was designed to reduce reserve-price auctions and to offset the additional costs of handling e-mail messages from "frustrated" buyers. Reserve auctions account for about 15% to 20% of eBay auctions, the spokesman said.
eBay softened the proposed changes on Sunday night, reducing the fee to 50 cents for items where the reserve price is less than $25 and suspending plans for the minimum bid. eBay also said it won't impose the reserve fee if the item is sold. The spokesman said eBay is trying to reach "a modicum of a compromise" between buyers and sellers. The furor regarding the reserve-auction policy comes after a series of computer failures at the leading Internet-auction site. Most recently, eBay's site was down for 10 hours Aug. 6, with portions of the site unusable for almost 24 hours.
Pity they didn't consider their inability to create administrative procedures that work for their clients (not stock holders). Perhaps then they would receive a lot more dollars in their pockets. It's bizarre when the only way to deal with ebay is through chat boards and other sellers, buyers etc. No wonder they make a fortune, they don't spend any of it on customer support, at least not intelligent customer support.