- ACCC and eBay
eBay recently implemented changes to how search results are presented to buyers. They advertised the changes as "Sales over impressions" - meaning listings which sell more per viewing will be shown at the top of listings. Also the seller's feedback history was to play a part.
However - the largest change that actually occurred was that the single most important factor in determining which listings are shown at the top is whether they offer free postage. Perform any search, and you will be shown all fixed price search results with free postage before every any fixed price listings with a specified postage cost. It does not matter whether the items with specified postage costs are actually lower overall, whether they have sold hundreds of items, or whether their seller has better feedback - ALL listings witha postage cost are now shown below ALL free postage listings.
Why is this a concern? Free postage listings RAISE THE COST OF THE ITEM FOR BUYERS. Ebay does not charge final value fee percentage on specified postage costs. Free postage listings just mean adding th postage cost to the item price. but By including the postage costs in the item price, ebay benefits by then having a higher value item price to that their up to 7.9% fees out of . These higher fees are then passed on to the buyer as higher item prices.
Not only this - by including postage cost in the item price buyers are not able to benefit from combined postage costs for multiple items. Sellers will also be very restricted in the circumstances they may offer returns and refunds because refund or credit of item price means they will be out of pocket for postage costs. Furthermore - when postage costs vary according to buyer location, buyers whose postage would have been cheaper with a specified postage cost tailored to their location will end up paying a higher rate when the postage rate is changed to a flat rate for all buyers and added to the item price.
By showing only free postage listings first, items with specified postage costs that were previously at the top of search result through a natural rise caused by item popularity and seller good feedback history have now been dropped out of buyers view. For some items, buyers must scroll through dozens of "Free postage" listing before ever seeing the items that used to be the most popular sellers according to buyers own preferences. This occurs even though generally the items with the specified postage cost are lower in overall price included postage than the free postage items listed above them! The sellers of these item therefore will be forced to raise item prices in order to offer "free postage" just so that buyers will actually get a chance to see their items and therefor purchase them. It does not matter how many buyers purchase these popular items anymore - ebay will never list them above a free postage fixed price listing!
So why would ebay promote the free postage listings at the top of search results if it disadvantages buyers and sellers?! Simply because they make more money out of the higher final value fees! Ebay's response so far has been to try to deny they are doing this intentionally and blame it on "the system changes" - as though they were not the ones who designed the system to operate this way! They claim that postage price does pay a small part in listing results - but any search will clearly show that regardless of all other factors, free postage fixed price listings are shown above all non-free postage listings. This makes it the PRIMARY factor, and thus ebay is presenting their search system in a completely dishonest way to its buyers. Not until hard pressed to show a buyer a specified postage listing that appears above a free psotage listing will they actually admit to these apalling changes. In other words - ebay are pretending to be promoting cheaper items - but in reality they are attempting to manipulate buyers into only seeing and hence only buying the items for which ebay will make more money.
In the old system from ranking search results - if the free postage listings were actually cheaper, they would have been the most popular in sales and views - and hence would have risen to the top of results automatically due to popularity and high sales! Reality is buyers were not purchasing those items because they were not good value - so ebay has now begun manipulating the search results in order to cause the buyers to purchase these items anyway!
Ebay were recently prohibited by consumer affairs organizations in the UK from forcing sellers to offer free postage on all items - manipulating search results to show only free postage results first is ebay Australia's way around this!
Its time to stand up and not let ebay disadvantage sellers with good items and best prices by hiding their listings where nobody can see them - just because ebay don't make as much money from them!
It's time to stand up and not let ebay try to tell us what to buy - just because they will get more money from it!
Stand up for an honest search standing system, based on what buyers actually want and actually buy - not what ebay gets more money from!
Free postage listings earn ebay higher revenue in final value fees, but they raise overall price for buyers as well as inhibit their opportunities for refunds. Fre postage listings also disadvantage sellers who until now have appeared at the top of search result due to their actual value and popularity with buyers.
We call upon the ACCC to ensure the items which buyers are presented with first in ebay search results are NOT the ones that ebay makes more profit from, but the ones buyers determine for themselves are better value and are let to raise to the top of search results naturally through their popularity and high sales.
We call upon the ACCC to stop eBay from surreptitiously forcing sellers to include postage costs in the item price, by making this the only way to get their items seen and thus purchased by buyers.
We call upon the ACCC to ensure eBay must advertise their search result sorting truthfully and cease misleading its users - both buyers and sellers.