An eBay presentation to top PowerSellers this afternoon revealed eBay's desire to be a "more efficient marketplace" and "improve the buyer experience," and it appears low prices are key to accomplishing that mission. A slide demonstrated how price-competitive eBay has become, with the company advising sellers to "actively manage their prices to compete." The message to sellers seemed to be: slash prices, slash them often.
The slide shows four sellers of a Garmin GPS product who are pitted against each other in a price war. Each seller has a different number of feedback ratings. The slide shows that Seller 1 lowered his price for the product from $142.99 to $129.79 over the course of a 1-month period, with all of the sellers lowering pricing to keep up with each other. The slide indicated how many times each seller lowered prices during the month, with "Seller 3" lowering his price 15 times. A box on the slide called out: "Top sellers are revising the prices on their listings MULTIPLE TIMES PER WEEK."
It's hard to believe sellers listening to the conference call would want to achieve lower Average Selling Prices, and eBay itself generates commission on selling price.
Nowhere on the slide did eBay mention customer ratings, DSRs or buyer satisfaction with the four sellers. With a focus on low prices, it's hard to see how sellers can keep or raise the level of customer service they provide to buyers, yet DSRs are not unimportant to sellers. Update: Just to clarify, eBay did say during the presentation that title, Item Specifics (especially condition), DSRs, buyer satisfaction, free shipping, listing in relevant categories, all play a role in Best Match. However, it said the "key criterion" for Best Match for Fixed price listings was Recent Sales.
eBay made radical changes to its feedback system this year in the name of improving the buyer experience, but confirmed Thursday that "Recent Sales" was the main factor in how fixed-price listings are shown to shoppers in search results. A slide entitled, "Choose the right format" said the key criteria for Auction-style format is Time Ending Soonest, and the key criteria for Fixed Price format is Recent Sales. (See the previous AuctionBytes blog post for a discussion on eBay's search alogrithm.)
The presentation overall showed how complicated it has become to sell on eBay, and specifically how price competitive the site is becoming. Other news and information coming out of the presentation will be reported in tomorrow's AuctionBytes Newsflash newsletter.
