EBay's new search slashes sales for some sellers
EBay's Best Match search method is intended to favor sellers with strong customer feedback, but some merchants say their sales have sunk since its launch.
(FORTUNE Small Business) -- Improving the buyer experience is the core of eBay's (EBAY, Fortune 500) growth strategy. The auction site is betting on Best Match, a new default search algorithm, to deliver. But the new system has left many sellers confused and angry.
Numerous eBay sellers have seen precipitous drops in their sales since Best Match became the company's default search option in March.
EBay's search algorithm used to be fairly straightforward, returning results based on sort options such as price, recent listings, or auction ending times. The proprietary, secrecy-shrouded new Best Match formula emphasizes seller feedback ratings from past customers, as well as past customer buying patterns. Consequently, some vendors now find their items buried deep in search results and can't figure out how to surface them.
"Morale is at an all time low for sellers," says Ina Steiner, 45, editor of AuctionBytes, a trade publication for online merchants. "There are obviously some sellers who are benefiting from these changes. But there's an overwhelming number of sellers who are feel they are not benefiting and are frustrated."
Valerie Lennert, a merchant in Anaheim, Calif., was making up to $800 a month from online sales of doll clothing, with a good portion of that revenue coming from last-minute bidders. But none of the 10 items she listed on eBay last week sold. Lennert attributes this dismal performance to her auctions never appearing at the top of search results, even when they were closing.
"People who are huge sellers on eBay, they get all their stuff listed first," says Lennert, 34. "Someone who just came along like me, or any other mom and pop person that doesn't have a full-time business, [their listings] show up on page 300, and buyers never see their stuff."
Even with a 98% positive feedback score and an inventory of 300,000 items listed each day, seller Kevin Harmon has watched his sales plunge by almost 50% since Best Match became eBay's default search algorithm. (EBay shoppers can still override the default and choose to sort search results by other criteria, such as "ending soonest.")
Harmon's company, Inflatable Madness, is based in Matthews, N.C. He posted just under $5 million in revenue last year selling books, DVDs and video games on eBay and other e-commerce sites. The company used to sell 70% of the Guitar Hero video games it listed. After Best Match launched, that number dropped to 20%. Harmon's staff found that listings that would have risen to the top under the old algorithm were instead buried on page six.
"If you're on the wrong side of Best Match, they basically make you invisible," says Harmon, 38.
Not all merchants dislike the new search changes. Online-auction broker Adam Hersh of Los Angeles has been waiting eagerly for Best Match, which he believes rewards good sellers who focus on customer service. The new search option initially hurt his listings placement, but he has since grabbed a bit of market share from competitors by improving his communication with buyers.
"It's going to force sellers to bring their A-game every time and really start giving some great service," says Hersh, 29. "It'll be a self-regulating site."
EBay executives solidly backed Best Match this week in their conference call with analysts following eBay's first-quarter earnings report. CEO John Donahoe called the new search mechanism "an innovation at the heart of bringing the best items and best values to our buyers."
Early results have been encouraging, he said: "It appears that finding the right product from the best sellers is getting easier." 
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