If you are not actively into online business, you may not have heard about it yet.

A large number of small sellers at EBay are on a strike this week to protest at the treatment they are receiving from the company. Given that EBay generates revenues from the sellers (and not the buyers directly), the sellers are protesting against two things:

(a) The recent increases in fee which is making it very difficult for smaller sellers – who are not ‘power sellers’ (there are various fees that a seller has to pay: listing fee, final value fee, and then PayPal fee).

(b) The fact that EBay has removed the ability of sellers to give negative feedback on troublesome buyers. If you visit the forums, many sellers are especially annoyed this change, because it creates an uneven playing field where the buyer can get away with hurting a seller.

Different reports are quoting different numbers – but the fact is the Ebay listings and sales have gone down as a result of this. The management is sticking to its stand, while the small sellers want to raise us their voice as much as they can in the one week’s time, because many of them can’t afford to not sell for long.

The fee increase mentioned above actually reflects the fact that EBay is struggling with the ongoing damage caused by refunds/returns done by fake sellers and fake buyers – both of them are increasing – and unless EBay uses some new steps to police this aspect (which should involve trusted EBayers in some way to share market intelligence) – this trend will continue to hurt EBay and the majority of genuine EBayers who have been selling / buying on EBay for almost a decade now.

In fact, many trusted smaller sellers have closed down their EBay stores in the last 6-12 months due o the reducing profit margins available to a smaller seller. No doubt, new sellers will take their place because it is a large eco-system.

But this whole episode makes one thing very clear: If we can create a similar system as EBay and get some interested traffic to it, there is a demand for it, and it can take-off.

Here are some news reports on this topic:

CNN: http://money.cnn.com/2008/02/07/smbusiness/ebay_boycott.fsb/

http://www.auctionbytes.com/cab/abn/y06/m08/i16/s01

And some of the best discussion is happening these blog posts:

http://bits.blogs.nytimes.com/2008/01/29/sellers-give-negative-feedback-on-ebay-changes

http://webpronews.com/topnews/2008/02/20/ebay-boycott-having-minimal-effect