February 29, 2012, 4:25 PM

eBay prods its sellers to get into better shape

New incentives encourage eBay merchants to enhance shipping options and other services.

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In its ongoing bid to win over more customers accustomed to the kind of service they get from Amazon.com and other top web retailers, eBay Inc. has introduced policies designed to reward eBay sellers for offering more attractive shipping options and other online shopping services.

“Savvy online merchants understand that consumer expectations are evolving, and they are adapting to the world class services needed to compete,” eBay says in an overview of its 2012 Spring Seller Update, introduced Tuesday. The update comprises a set of new policies for eBay sellers that will begin to take effect this spring and summer, including fee incentives to offer fast shipping and a minimum 14-day return policy, free product pictures, new protections against questionable feedback from buyers, and the availability of Top-Rated Seller status to sellers with minimum annual sales of $1,000, down from $3,000.

EBay also notes in the overview that increased commitments among eBay sellers to a higher level of e-commerce service have already produced positive results, including an increase of active buyers to more than 100 million and eBay mobile sales that have reached $5 billion worldwide.

Some of the changes coming in the spring and summer include:

● Starting July 2, all sellers receive up to 12 free pictures per listing, along with Zoom and enlargement capabilities. Though they can vary widely by seller, eBay’s current picture policy charges fees of about 40 cents or more for a single image, and the free policy will typically save sellers more than 10% in total listing fees, eBay says.

● Starting May 1, eBay will increase the maximum commission it takes on auction-style listings, or final value fee, to$250 from $100. EBay notes that this will only pertain to transactions of at least $1,111, and will apply only to sellers who do not have an eBay Stores subscription. A final value fee is a commission eBay collects from sellers on the total value of a sale including shipping.

● Starting in June, top-rated sellers need to have shipment-tracking information uploaded to eBay on at least 90% of transactions with U.S. buyers.

● Starting June 1, top-rated sellers will earn a 20% discount on final value fees on listings that include these two services: a one-day or same-day order handling time, and a 14-day or longer return policy with a money-back option.

In a sellers forum on eBay.com, several sellers have posted questions about new shipping policies, such as how they will be charged for the cost of returned items.

One eBay seller, identified in the forum as crackerjackfarm, posed this scenario: “I ship an item for $10 and the customer returns it for a refund. The customer packs it up into another box that weighs more and adds delivery confirmation or insurance and pays $18 to return the item to me for a refund. What amount are you going to automatically charge my account for return postage?”

The reply, from eBay’s Seller Communications, notes that the new managed returns process will provide return labels at no extra cost, and that the return postage will be calculated on the weight and dimensions of the returned item, including the “typical” packaging that would be used for the returned item. “If the buyer wants to add insurance, they shouldn’t use the return label provided,” the reply from Seller Communications said. “Instead, they would need to purchase their own return postage with insurance.”

Industry observers say the updated policies should benefit eBay sellers and their customers. “Overall, we view eBay marketplace changes as geared towards driving more convenience and loyalty from buyers as eBay seeks to compete more effectively against Amazon and other market alternatives,” Colin Sebastian, an analyst who follows eBay at investment banking firm Robert W. Baird & Co. Inc., says in report on eBay this week. Amazon is No. 1 in the Internet Retailer Top 500 Guide.

“The eBay changes are largely geared towards rewarding sellers that deliver a great buyer experience,” says Scot Wingo, CEO of ChannelAdvisor Corp., a company that helps retailers sell through eBay and other online marketplaces.

Sebastian and Wingo add that eBay sellers in Europe will undergo bigger changes, notably in higher selling fees resulting from smaller discounts for top-rated sellers. But if eBay invests its increased fee revenue in marketing to acquire more buyers on eBay.com, for sellers “it will be a net positive,” Wingo says.

Ryan Remy, who manages eBay listings at retailer Tool King LLC No. 337 in the Internet Retailer Top 500 Guide, says the new policies will put more pressure on sellers to provide excellent customer service, particularly in faster and more efficient product returns. “As with every change eBay makes, some sellers will like it and some won't. In the world of e-commerce, it's the ones who adapt to the changes the quickest who will be the most successful."

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