What to Make of eBay’s New Policies?

I’m an eBay fanatic: clothes, shoes, furniture, razor blades, makeup for my wife, books and even a car — I’ve found them all on eBay. I’m also an eBay seller and have used the the site to move everything from tattered old books to a TiVo I didn’t need any more.

In many ways, I think that eBay is one of the greatest examples of what a free market economy can accomplish.
Recently, however, eBay has announced a series of policy changes that take effect on Wednesday. As a result, many sellers are up in arms and threaten an Ebay boycott.

Although its management is as prone to miscalculation as anyone else, it is obvious that eBay didn’t get where it is by treating sellers poorly. Unlike other companies that can realize short-term gains by cheating their suppliers, the very nature of eBay’s business providing a marketplace means that its can’t make more money unless its own sellers also make more money.

Reading ebay’s reasoning, even the most controversial change — sellers can no longer leave negative feedback on buyers — seems to make sense particularly when one considers new measures to hold buyers accountable.

In some ways, the idea of letting merchants rate their customers seems like a great idea because it allows 360 degree evaluation of someone’s behavior. At least two science fiction novels I can think of — Earthweb and Down and Out in the Magic Kingdom — involve society-wide versions of the eBay feedback system as the basis for new societies.

Here’s the problem: I’ve had more than a few problems with people who have provided poor service that just didn’t rise to the level of outright fraud or failure: slow shippers, surly e-mailers and the like. I could have left negative feedback for them but never did because I knew that it would lead to negative feedback for me. More than once, I’ve also come across sellers who have “positive” feedback that describes failures to deliver on time and even shipping counterfeit goods.

In short, I think that eBay has made the right choice.