June 13, 2008, 12:00 AM

eBay raises the bar for sellers as it re-focuses on growth

In a move to improve its overall performance, eBay Inc. is presenting its sellers new tools—and a tough, new rating system—designed to improve the shopping experience on eBay.com.

In a move to improve its overall performance, eBay Inc. is presenting its sellers new tools-and a tough, new rating system-designed to improve the shopping experience on eBay.com.

The new tools and performance rating system are part of an ongoing restructuring designed to help eBay return to faster growth by providing more cutting-edge methods of conducting e-commerce, says Scot Wingo, CEO of ChannelAdvisor Corp., which specializes in services that help retailers sell through eBay.com and other online channels. The reality for eBay, he adds, is that the world’s largest marketplace can no longer ride the wave of e-commerce without improving the eBay shopping experience.

“If you look back five years, eBay grew so rapidly that it took its eye off its core U.S. market,” he says. “They bought PayPal and Skype but didn’t keep their core marketplace up to date with what happened in the rest of e-commerce.” Meantime, eBay’s growth rate has slowed. Gross merchandise sales, the total value of goods sold on eBay, grew 13% in 2007 over 2006, down from year-earlier growth of 19%. Moreover, its fastest growth was in overseas markets.

But with a new course in recent months along with a new CEO, John Donahoe, eBay is trying to rapidly catch up. “There have been more changes in the last three months on eBay than in the last four years,” Wingo says. “And there are more changes to come. It’s all about the customer experience in 2008.”

With its new Seller Dashboard tool, for example, eBay sellers can see how well they score in customer reviews on a scale of 1 to 5 in key performance areas such as shipping and handling fees and services, timely communication with customers and the usefulness of product descriptions. The better they score, with a 5 being the highest, the better sellers rank in eBay’s new “Best Match” site search system and the more they save on eBay listing fees.

“The Dashboard gives you an at-a-glance look at your seller account status so you can track what’s going well in your eBay business and identify areas for improvement,” Nick Donelson of eBay’s Seller Tools team says in a recent eBay blog posting.

But scoring ratings high enough to produce benefits to sellers is not easy, Wingo says. Sellers find it particularly difficult to score high in reviews of shipping and handling, yet they need an overall rating of 4.6 or higher to rank high in Best Match results and to earn discounts on listing fees. Scoring 4.5 or lower can drive a seller’s ranking down in search results, Wingo says.

Sellers can earn a discount of 5% on fees with a score of 4.6, and 15% with a score of at least 4.8, Wingo says. On a sale of $50 a seller with a 4.8 score would save about 45 cents, Wingo says, noting that’s not enough of a savings to help sellers significantly lower shipping and handling costs.

But the real prize is the improvement in site search results, he says. “Fee discounts are a nice-to-have, but the real carrot is better Best Match results.” That leaves eBay sellers searching for ways to improve operations like shipping and handling to boost their ratings, he adds.

At the same time, eBay is also tightening its policy regarding links to and from seller’s pages. On a seller’s About Me page, for instance, eBay used to allow links to a seller’s own off-eBay web site or blog. “In this case, eBay is not going with state-of-the-art, but protecting its turf,” Wingo says.

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