Auction site eBay trying to keep its die-hard users happy

SAN JOSE, Calif. -- Twelve eBay users from around the country have been invited to company headquarters to give the Internet auction site's executives pieces of their minds: Customer service is lousy. The search engine is weak. Pop-up ads are deplorable.

The eBay manager writing down their gripes quickly fills a large sheet of paper, then two, then three, eventually taping so many onto a wall that new ones go on the door.

Michael Benson, a baseball card collector from St. Louis, adds his complaint: "eBay is going with the big sellers over the little sellers." Murmurs of assent can be heard around the table. "You've got to get back to mom and pop sellers," nods Judy Tomlin of Mecosta, Mich.

That complaint is not new, but it is becoming increasingly common among longtime eBay users. Many say eBay, committed to growth, is giving big companies an unfair advantage by prominently featuring their brand-name wares, creating tough competition for the millions of regular folks who made eBay huge.

"It's so infuriating to see the stock continually rise and know that it's happening because the little guy is taking it in the shins," said collectibles seller Tricia Spencer of Riverside, Calif., who was not among the 12 users invited to headquarters. "It's like a kingdom where the serfs have done all the work and the king eats hale and hearty."

Poor communication

EBay executives say the charge is unfounded. But they acknowledge that after eBay's astonishing rise in recent years, it is more difficult than ever to stay connected to its treasured "community" -- the hobbyists and small businesses that trade everything from AstroTurf to zithers, and dole out "feedback points" that reflect their online reputations.

"Our communication, frankly, to the community is broken," Bill Cobb, eBay's director of marketing, told the group of 12 at eBay's most recent "Voice of the Customer" session. "We have to figure out a better way."

EBay hopes relations get a big boost from its first "community celebration," called eBay Live, June 21 through 23 in Anaheim. More than 3,000 users are expected to mingle with company managers, trade advice on how to buy and sell things in more cost-effective ways, hear a speech by CEO Meg Whitman and attend an awards ceremony.

Founded in 1995, eBay is by far the world's top Internet auction site, with nearly 50 million registered users and sites in 27 countries.

It long ago shed its roots as an online flea market. With big companies such as Dell and IBM now unloading goods on eBay, the site is more like a giant mall with a flea market and a used-car dealership in the parking lot.

To attract even corporate sellers, eBay and consultancy Accenture plan to launch a service to facilitate auctions for firms with discontinued or out-of-season merchandise.

Executives say such deals are essential for eBay's long-term financial growth, which will come largely by expanding its slim market share in major consumer categories. More brand-name products will bring new buyers, which ultimately helps big and small sellers, they say.

They also point out that eBay charges all sellers the same listing and commission fees. And they say 96 percent of the $13 billion in merchandise that will be sold on eBay this year is from small and medium-sized businesses.

Feeling the pinch

Even so, many sellers say they are feeling pinched by increased competition -- while the listing and commission fees they pay to eBay have only gone up.

Prices of collectibles on eBay dropped 11 percent in May from last year and 25 percent from 2000, according to AuctionBytes.com, which tracks Internet trading. Collectibles' average "sell-through rate" -- the percentage of listed items that sold -- was 55 percent last month, down from 72 percent in 2000.

"The traffic to my auctions has slowed to almost half since the influx of discounters and wholesalers into the categories," said Mischelle Martin of Los Angeles, who sells women's clothing on eBay.

Brian Burke, eBay's senior manager of community development, argues that such developments are a natural part of the marketplace.

"We haven't eliminated competition by putting it online," he said. "We've probably actually enhanced competition."

Promoting that benign image hasn't proven easy. Adding to the perception that eBay is unresponsive: On its online message boards, many community questions are answered not by real eBay staff but by fellow members or with canned, automatically generated replies.