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PeSA's Official Response to Seller Article - October 20, 2008

The Professional eBay Sellers Alliance was recently contacted about the efforts in the eBay community to "not shop from this holiday season" because of the damage the eBay seller community is feeling from the special pricing program eBay struck with Since this issue underscores the greater issue about the future of the eBay marketplace, we felt is was important to comment publicly on the article, which we have also posted the article on our site for reference. Our comments are below:

We agree that the deal eBay arranged for, as well as the new diamond tier pricing, hurts the eBay community overall because it provides free access to the marketplace without the same commitment to success that the current listing fee structure requires of the rest of eBay sellers. Zero upfront cost allows a merchant to oversupply and saturate a category with pricing that's not matched to the interest of shoppers. The result is a dramatic drop in conversion category-wide. Meanwhile, the rest of the sellers in the category still must make the upfront investments to list but experience dramatically lower exposure.

We agree that eBay needs to focus on the buyer experience. However, we are disappointed that sellers that are delivering great buyer experiences find themselves at a substantial disadvantage because of the pricing disparity of the diamond tier access. We believe that sellers that are doing the right things by all of eBay's measures should not be disadvantaged.

Early in 2007, eBay experienced an issue with too much supply overwhelming the search functionality on the site. The result was that eBay adjusted their fees to encourage sellers to reduce supply to the marketplace. We believe that eBay is experiencing the fruits of that strategy. It is puzzling to us that when eBay was interested in expanding supply on the marketplace, it went outside its large community of merchants to strike a special deal with a company that had no history on eBay and carried the same products currently available from smaller sellers on the site.

PESA continues to be concerned about the health of the eBay marketplace and eBay's supply issues are a symptom of a declining value proposition. Companies such as Dell, JC Penney, Circuit City and Home Depot have tried the eBay marketplace over the years, but left due to limited success. As saturates a number of categories, hundreds of sellers are at risk of shutting down their eBay businesses. Like the other companies that have tried eBay, should find that the economics don't work and leave eBay, there would be a substantial supply hole on eBay that would not be filled easily since the large community of sellers was diminished due to the diamond tier pricing advantage and current macro economic environment.

In light of the above, we can understand the argument that buying from and supporting their business can contribute to the further disruption of the eBay marketplace. We support the individual decisions of our members and the rest of the buyer community who wish to avoid patronizing diamond tier sellers.

For over 5 years of success PESA has been dedicated to supporting eBay and eBay sellers in growing and managing a healthy online marketplace. We measure success by the health and vibrancy of the seller community and we are fighting extra hard for the seller community in difficult times such as this.
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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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