If I were the CEO of a shopping engine, this would be my list of merchant facing resolutions:

1. Provide greater transparency
2. Launch an API to allow merchants to more efficiently and creatively manage their shopping engine campaigns
3. Create an open and honest merchant facing blog to discuss the challenges and opportunities we’re facing
4. Allow merchants to manage syndication/distribution partnership listings separate from main shopping engine listings
5. Take care of our merchants
6. Engage merchants in a conversation and listen very closely

In other words, for the most part, do what Google AdWords has done. And since you have a PPC expert in house spending millions of dollars a month on AdWords, ask that person to give you and the entire merchant facing team a crash course on Google Adwords. Possible topics include: targeting (placement, keyword, region, etc.), the API, reporting capabilities, fraudulent click policy, the content network, quality score, conversion optimizer, CPA bidding, customer support, and customer engagement.

Not everything you learn will be applicable to the shopping space, but at your core, from the merchant perspective, you are a performance based internet marketing channel. And if Google AdWords is the standard in that market, then you have to keep up with them in terms of what they offer merchants and how they work with merchants.