When CEO Meg Whitman told analysts that eBay had lost its magic, she blamed store inventory. But Store inventory is not what is hurting the "core" (non-Store) eBay platform.

eBay launched Stores as a way for sellers to list slower moving inventory and to project a more professional image. Store items do not show up on the eBay.com core platform except for rare circumstances.

"The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience," Meg said. However:

- store items can't hurt the core platform with identical, poorly priced items; when you do a search on core, you don't find the store items;

- if there's a reason for core "losing it's magic," it's because of fraudulent listings; scam sellers; counterfeit items; BIN bandits; changing auction ending times due to extender tools; shipping gouging; and more. These are all things eBay has failed to fix;

- another reason for sellers moving to Store format instead of core is because of falling ASPs and STRs.

Making eBay Stores more expensive won't give sellers an incentive to move listings back to a marketplace where they can't make money. In fact, the ill will caused by the events of the last few weeks along with a laundry list of complaints make sellers loathe to put all their eggs in one eBay basket.

Sellers want quick turnover and higher selling prices just as much as eBay does, but core is not enough. If eBay makes its storefront unattractive, it will for some sellers be a "kick in the pants" that makes them look at opening their own independent storefronts and using Google Adwords, Froogle and MySpace to try and drive traffic to their listings.

Here's what sellers wish eBay had announced on July 19 (but didn't):

We were so excited about eBay Express, we wanted our sellers to have lots of store inventory to stock the eBay Express shelves. So we gave sellers lots of incentives to open stores and list even more items - we rolled out Stores in Search, giving more exposure to Store inventory.

Well, that was our mistake. We made it so attractive, that a lot of you focused on Stores at the expense of core listings.

Because we need to fix our mistake, we are increasing store fees from 2 cents to 3 cents, and we are lowering auction listings through the end of the year. We hope you will take advantage of the auction format.

We're also going to start enforcing our 10-item limit per seller. We know some of you have multiple stores with identical inventory. But having 24 eBay Stores with identical inventory in an attempt to get extra exposure in the search engines is just wrong.

We're also going to prohibit automatic auction-extender tools, because, as we said when they first came out, they hurt the buyer experience.

We're going to enforce our policies, get rid of scammers, begin a stricter seller-verification process, and improve our customer service to all users - buyers and sellers. Because we haven't focused enough of our attention on these crucial areas, we have hurt the eBay experience.

To sellers who list lots of different items on eBay, thank you. Your inventory adds value so that when buyers come to the site, they know they have lots of choices. We - eBay and our sellers - are partners. Your success is our success, and we truly do manage the company, not the stock. Here's to a mutually beneficial and long-lasting relationship!

Edited 8/19 at 2:51 (pasted wrong draft)