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EcommerceBytes-NewsFlash, Number 1795 - May 22, 2008 - ISSN 1539-5065    1 of 4

Top Australian Seller NARU, Reacts to eBay Feedback Changes

By Ina Steiner
May 22, 2008

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The account of one of the largest sellers of DVDs on eBay Australia and UK has been suspended, or NARU as it's known on the auction site. Phil Leahy, who also heads an organization of eBay sellers, said he stopped trading on eBay about a month ago in order to revamp his operations, and is NARU for not yet having paid his eBay bill.

A Platinum PowerSeller and head of PESA Australia, Leahy had been using a software program called Marketworks to manage his 40,000 product SKUs. But the software didn't deliver on its promises, he said, saying it failed to improve its Search Engine Optimization capabilities. After ChannelAdvisor acquired Marketworks, Leahy decided the time was right to switch to a new system.

The timing of his decision couldn't be better, he said, referring to the changes that have been rolling out at eBay. Previously Leahy's business was out of stock on 15 percent of his inventory, leading to customer dissatisfaction. And with eBay's new rating system, his feedback and "Detailed Seller Ratings," or DSRs, were taking a hit. One customer left him a neutral rating last week, for example, writing, "They never had this item to sell in the first place But gave full refund."

eBay has also begun using DSRs to reward sellers financially if they get high marks, and to punish them with less exposure on the site if they receive low marks.

Leahy said he is focusing on best practices when he relaunches, such as having a 100 percent in-stock policy. He also plans to become less dependent on eBay.

The fact that he is willing to abandon his eBay User ID, "philsales1," which had earned 112,150 feedback ratings since launching in July 2002, to start with a new ID with no track record, speaks volumes about eBay's new policies. Highly rated PowerSellers can receive discounts of 15% off of their fees and get a boost in eBay's search results.

Leahy said the old ID had a legacy with it, and to raise DSRs on the account, he said, "it can't be improved overnight." He'll begin with a new ID and will "focus on the DSR question." His new ID will contain his company's name, Entertainment House.

Despite the challenges, Leahy said he thinks eBay has done some really good things with the new feedback system. "DSRs are a great thing, they help sellers recognize their responsibilities. But not all changes are positive - such as mutual feedback (withdrawal) - I can't figure out why they took it away. The seller is just going to leave it at that." With sellers unable to leave buyers negative or neutral feedback, and unable to get their own negative feedback withdrawn even if they succeed in making the customer happy, "sellers won't go through the refund process," he said.

"eBay got a few things wrong, but they are deal breakers."

Leahy said he has worked out a payment program with eBay for the bill he owes, but said the fees are minimal given the millions of dollars he has paid eBay over the past six years.

"These are rocky times for us, but we're not running anywhere. I intend to pay my fees," he said.

In addition to continuing to provide customer service to his eBay customers, revamping his business operations, and bringing in a new investor, Leahy said he has spent a lot of time working against the policy eBay Australia is instituting in going to a PayPal-only venue beginning next month (http://www.auctionbytes.com/cab/abn/y08/m05/i21/s01). Leahy prepared a document for the Australia Competition and Consumer Commission (ACCC), saying he felt it his responsibility to represent the community.

He also met with ACCC staff on May 15. The ACC notes of the interview are available on its website (http://www.accc.gov.au/content/index.phtml/itemId/823668/fromItemId/776499).

Updated on 5/22/08 to reflect the out-of-stock rate of 15 percent, originally reported incorrectly.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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