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January 2005

PeSA Official Statement on eBay's Marketplace Security Changes:
Eroding Marketplace Integrity A Concern

The integrity of the eBay marketplace is the single largest issue challenging top sellers conducting businesses on eBay. Negative buyer experiences and the associated media coverage have created a strong caveat emptor mentality among shoppers when considering shopping on eBay.

During the past year, PeSA members have seen the eBay marketplace weaken. While competition in the market has increased, we believe that the state of mind of the shopper is the primary underlying issue. Conversion and average selling prices have slid across most categories. Buyers appear more price conscious than ever. We believe that a shift of balance of buyers versus sellers as well as an erosion of buyer confidence from fraud experiences and media attention has caused the flattening growth of eBay US. Although eBay started as an online flea market, many of the merchants that have joined the site are now offering new merchandise. Unfortunately, buyers still perceive eBay as a flea market with shady sellers and poor customer service.

The members of PESA are concerned that eBay is not taking serious action to address this issue. The INR/SNAD process that is being rolled out in January is simply a reporting mechanism with no protective value to the consumer. It does nothing to curtail improper practices from occurring, only reporting after the fact. We believe that eBay needs to implement policies that will prevent people with negative intentions from doing excessive damage to innocent shoppers. eBay should verify the address and identity of sellers as well as place restrictions on selling activity until certain criteria are met. A new seller should not have an issue providing a verifiable name and address before needing to list 50 plasma televisions or laptop computers.

eBay should also let the cream rise to the top and make it easier for shoppers to find its best sellers. Buyers should be allowed to search for items using seller criteria such as feedback percentage or return policy. If these search criteria were available to shoppers, it would provide an incentive to sellers to adopt best practices. In the current environment, why should a seller have a return policy or strive to achieve a 99% positive feedback rating when the items from a seller with a 99% rating will be listed alongside a seller with an 88% rating.

The members of PESA believe that the changes from the INR process are purely cosmetic and only seem to add a greater reporting burden on high volume sellers without any improvement in the integrity of the eBay marketplace.
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"PeSA has helped thousands of merchants optimize their eBay sales and I am pleased to say that my business is one of them."

- Jonathan Garriss, Executive Director and online merchant of shoes and posters.
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