Ebay has been the undisputed leader of all the survived the dot-com boom. It is a company that has single handedly changed the landscape of the marketplace for so many industries. In fact, I recently finished reading The Perfect Store: Inside EBay by Adam Cohen. It really was an interesting read and a valuable insight into Ebay’s “community”. In the book Cohen argues that Ebay’s greatest asset is it’s community. He also talks about Ebays “feedback system” or what is more generically known as a reputation system as a way for the Ebay community to self-police itself (for the most part at least).

Inspired by the book, I decided to give Ebay a new spin. And so recently I pulled out some old items which I wasn’t using any more and mostly as an experiment proceeded to sell them on EBay. I also purchased several items on Ebay and found some good deals and had an overall positive experience. However, in my non-scientific re-evaluation of Ebay, I also uncovered some peeves which I felt compelled to share:

1) Site Design and Usability: For a site that does so much in revenue, it is my personal opinion, that Ebay’s site and usability leave a lot to be desired. I have actually heard talks from usability folks at Ebay when they have come and presented at Stanford and they do a very good job of explaining why making changes to Ebay’s interface has a very high switching cost for the company and for its community. The old dogs and the Ebay addicts have learnt how the site works and making any changes is akin to playing with fire, for fear of inflaming the community opinion or breaking the various screen-scrapers that are out there working trolling the ebay pages.

However, though that is formidable problem, I do feel that there are things that Ebay can do in order to make changes and yet potentially maintain backward compatibility for a period of time and then phasing out old systems through a retirement program. A classic example that illustrates my point is EBay’s Chat. I feel that given my background in the area I’m somewhat qualified to pick a fight on this. The technology that Ebay is using for it’s chat system is so 1994-1995. There have been so many advances since then, but Ebay’s system seems to be caught in its own little world where time stands still.

2) The interface for posting items for sale — and the overall presentation of the items on the website can use a huge facelift. There is no reason that a seller should need to add a counter, or the fact that the counter should be a gif image — again technology reminiscent of a decade ago. The overall experience of posting an item for selling and that of actually browsing and biding can be improved so much by making little changes and most of all embracing new technology.

3) Auctions can get pretty fancy. But on Ebay, you cannot extend an auction into overtime. This is what encourages sniping. In my opinion sniping goes against the very fabric of the principles EBay’s founders claimed to found the company on. If the objective is to create the most efficient marketplace, by allowing sniping (I’m not saying it should be stopped altogether, but that there should at least be the option for sellers to do an auto-extend on auctions till such time there has been no more biding for a certain delta of time) then the market is not efficient any more. Some sellers are not getting the optimal value (and in fact it is so surprising that Ebay doesn’t do this because it should imply a significant increase in the value of the transaction and hence and increase in the revenue for EBay) and some buyers are losing auctions because they weren’t allowed to bid further even though they may be willing to do so.

4) My final and most crucial gripe is how EBay’s feedback system is flawed and is prone to feedback which is quid-pro-quo. I recently engaged in a transaction on EBay in which the seller did not ship the items in a timely manner. My attempts to contact the seller initially went unheard. I did eventually receive the product, but a couple of weeks late which in turn had an impact on the schedule I was attempting to meet for a research project. Consequently, I made the decision to leave negative feedback for the seller, but with the appropriate comment that it was for poor communication and late shipment. The seller in return left negative feedback for me and thereafter, promptly submitting a request for mutual withdrawal. So by now the flaw should be apparent – If one side had a negative experience, but the other party upheld it’s part of the bargain (in my case paying as soon as the auction ended) that feedback doesn’t often come out in the system because both parties know that a negative feedback will probably result in a retaliatory negative feedback. This form of feedback-blackmail as I like to call it, results in a back-scratching quid-pro-quo which undermines the integrity of a reputation system. As I explained to the seller in my transaction, I will not succumb to such arm-twisting and withdrawing an honest and factual negative feedback simply in response to a negative feedback would be a disservice to the EBay community.

What Ebay has going fo it is critical mass, however, if such little issues are not addressed over time (and a decade is a long time) then slowly the rust catches up with the tanker and it start to take on water…

Thoughts?