Topic: eBay strikes again...

[Pugnate]

Apparently if sellers get two negatives in 31 days, then eBay will hold payments for any future high value items you sold for a period of 21 days. Meanwhile these payments will be in a bank collecting interest, that will go to eBay. Hmmmm...

It actually doesn't sound so bad to me, but people are freaking out:

EBay's PayPal funds freeze plan draws fire:

http://money.cnn.com/2008/02/08/smbusiness/paypal_funds_freeze.fsb/index.htm?postversion=2008021113

What PayPal does with your money:

http://money.cnn.com/2008/02/26/smbusiness/paypal_float.fsb/index.htm

Citigroup (C, Fortune 500) Director of Internet Research Mark Mahaney arrived at similar estimates by examining PayPal's public quotes of average "stored value." Mahaney approximates the interest earned on the float at "single-digit millions per quarter, and at most $10 million a quarter."
All that's a drop in the bucket, said Quarles. In 2007, PayPal generated $1.8 billion in revenue. EBay's total 2007 revenue was $7.7 billion. EBay does not break out PayPal's earnings in its financial statements, meaning analysts must rely on their own estimates of the division's profits.

[gpw11]

Citigroup (C, Fortune 500) Director of Internet Research Mark Mahaney arrived at similar estimates by examining PayPal's public quotes of average "stored value." Mahaney approximates the interest earned on the float at "single-digit millions per quarter, and at most $10 million a quarter."
All that's a drop in the bucket, said Quarles. In 2007, PayPal generated $1.8 billion in revenue. EBay's total 2007 revenue was $7.7 billion. EBay does not break out PayPal's earnings in its financial statements, meaning analysts must rely on their own estimates of the division's profits.

This doesn't surprise me at all.  You really have to expect things like this and it's not one of those things that will make me bitch about banks and other financial services.

Apparently if sellers get two negatives in 31 days, then eBay will hold payments for any future high value items you sold for a period of 21 days. Meanwhile these payments will be in a bank collecting interest, that will go to eBay. Hmmmm...

It actually doesn't sound so bad to me, but people are freaking out:

This, however, is pure fucking bullshit.  Thanks for my money back and you're welcome for the zero interest loan.  It seems pretty fucking apparent that eBay has to lose some business now.  I mean, they're already under a bit of fire and they announce this?  You can't make PR errors like that and just walk away from it unscathed.  Audacious is the only word I can think of.

[scottws]

Wow, I never knew that eBay made so much money.  That's crazy.  That in the light of the fact that they just started taking a bigger cut of every transaction makes it complete and utter bullshit.  It's not like they can have any overhead that is anywhere even close to $7.7 billion that they have to make up for.

[Pugnate]

I guess the shareholders just demand a growing percentage in profits every year. And if the shareholders won't get it, they'll find a CEO who can give that to them. I just think there is a point where you are just happy with your profit margin.

I think eBay's growth came from the small value auctions, and now they've just basically killed that with final value fees up to the ass. 

This, however, is pure fucking bullshit.  Thanks for my money back and you're welcome for the zero interest loan.  It seems pretty fucking apparent that eBay has to lose some business now.  I mean, they're already under a bit of fire and they announce this?  You can't make PR errors like that and just walk away from it unscathed.  Audacious is the only word I can think of

I can see why they did that. I bet many sellers grow reputations just so that they can suddenly sell something for 10,000 dollars and run away with the money. I think when you get a few negative feedbacks, they take it as alarm bells. But they should be using this 21 day thing only for sellers that are relatively new.