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eBay Rumored to Be Abandoning Platforms for Small Retailers

Jalmar Araujo runs his two retail businesses using eBay’s ProStores ecommerce-hosting service and may soon have to look for a new platform to host his websites. Rumors have yet again surfaced that eBay will abandon its ProStores and Magento Go services – both designed to make it easy for small sellers to set up their own ecommerce storefronts – as it focuses on large retailers and brands. But Araujo, who does not have a dedicated ProStores representative, said he had not received any notice from the company about a possible closure.

On Friday, an eBay spokesperson told EcommerceBytes it was not commenting on rumors or speculation regarding ProStores. In March, eBay spokesperson Kelly Henry had told EcommerceBytes the same thing, and had added, “We are a customer-centric organization and any changes to our products and services will be directly communicated to our clients at the appropriate time and with their best interest in mind.”

Araujo opened his ProStores account in 2006, and said in the beginning it was tough – there were lots of glitches and problems, he said. But now everything runs smoothly, and he simply updates his inventory on his two sites, BRCoffee.com and Flexibrace.com.

While ProStores used to send emails to him announcing new features, they had not done that in a while, he said.

Araujo took the rumors of ProStores closing in stride – sales on his own sites make up for less than 10% of his business, with the majority of his sales taking place on Amazon and on eBay. If ProStores closes, he would switch to a different platform, he said.

While his own websites are more profitable, the lower sales volume means challenges on marketplaces have a greater impact. The day EcommerceBytes spoke to him, for example, he had received an “item not as described” complaint from an eBay buyer – exactly one day after they purchased the item. He’s based in Massachusetts, the buyer is in California, and tracking showed the item was still being processed in Boston.

When he called eBay to escalate the claim, the customer service rep “played dumb,” and he’s concerned that it could show up as a “defect” on his account when eBay institutes its new Seller Defect Rate policy in August.

His biggest problem on Amazon is returns, where he says 10% of FBA orders are returned to him. He had one case where the same buyer purchased an item and returned it five times. When he caught on to the behavior and reported the buyer to Amazon, it told him they had taken “appropriate action” – but he has no way of knowing if the buyer is still active on the marketplace.

On his own site, he charges a 20% restocking fee and return shipping to discourage such abuse from bad buyers. But with Amazon FBA orders, he must accept all returns and pay for return shipping.

While Jalmar Araujo said he isn’t panicked about the prospect of eBay closing its ProStores platform, he does say he would need a minimum of 3 months to make a transition to a new platform.

Interestingly, eBay had experienced a security issue “that potentially allowed shoplifters to empty eBay ProStores shops and swipe customer credit cards,” according to The Register in a report published 2 weeks after rumors of ProStores closing first surfaced in March.

Update 7/1/14: It’s official: eBay is closing Prostores and Magento Go on February 1, 2015, see today’s Newsflash story.

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Ina Steiner
Ina Steiner
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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.