eBay Misinterprets Data to Claim Improvements in the Marketplace

Posted on June 21, 2008. Filed under: eBay | Tags: , , , , , |

Coming out of eBay Live were several interesting comments from eBay.  According to eBay, their radical iron-fisted changes to whip sellers into shape are working to create a better environment where buyers are likely to come back and more likely to purchase more.  According to eBay executives:
1. More buyers are leaving feedback and if I interpret their comments correctly, eBay specifically means more buyers are leaving Detailed Seller Ratings (DSRs) than they were before.
2. The overall DSR ratings have increased which eBay claims proves that seller performance has improved.
3. More negatives and less neutrals are being left by buyers which eBay interprets as support for their new scoring system (where neutrals have the affect of lower the feedback percentage) since eBay interprets the data to mean that buyers who would have previously left neutrals are now leaving negatives.
Some of eBay’s comments about the data actually seem contradictory.  If more buyers are leaving feedback and more negatives than neutrals are being left than before, then how are the average DSR scores actually increasing?  eBay’s interpretation of the data doesn’t seem to explain how the recent changes have brought about an overall positive change to the eBay marketplace.
I have another explanation.  First of all, buyers are becoming more educated about feedback.  Sellers are directly responsible for educating buyers on what feedback scores and ratings REALLY mean.  So buyers are leaving more DSR ratings than before because they understand how important the ratings are to sellers.  And buyers are leaving higher DSR ratings than before because they understand that “4” is really bad whereas previously they did not.  Buyers had previously intended on publicly reporting that the seller was providing good service and value and therefore they left 4s but when they soon learned how bad a 4 really is, they began leaving feedback that more accurately reflects their true feeling about the transaction.  And buyers learned that a neutral was not really a neutral in the new system and thus fewer buyers are leaving neutral feedback.  In addition, poor performing sellers are being involuntarily removed from the eBay marketplace and this occurred because more buyers could leave these sellers negative feedback without fear of retaliation.
Therefore, the DSRs have gone up on eBay NOT necessarily because individual seller performance improved but because buyers are now more educated about the eBay feedback system and because the poor performing sellers, who had previously been dragging down the DSR scores, are being involuntarily removed.  The remaining sellers are not necessarily performing any better than they were before and that is what the statistics actually show when you interpret the data correctly.
In addition, eBay has stated that Unpaid Item Disputes (UPIs) have not increased since May 19, 2008 and eBay interprets this to mean that removing the sellers’ ability to leave negative feedback has not made buyers any more likely to buy without paying.  However, I would posit that the reports of  UPIs have not increased because too many sellers are afraid to report nonpaying bidders since the bidders can leave negative feedback even without ever paying.  So the actual number of unpaid items has increased but sellers just aren’t reporting these incidences.
eBay, of course, interprets their data to mean what they want it to mean but their explanations of the data don’t make sense.  But, then, perhaps the misinterpretation is simply a matter of eBay not understanding their own marketplace rather than their attempt to be purposely deceitful.

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One Response to “eBay Misinterprets Data to Claim Improvements in the Marketplace”

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With the “education” that a 4 is bad, and a 5 is really the “only” value that can be left to not penalize a seller, one can see how the DSR system is being rendered “absolutely useless” because we, the sellers, are causing users to skew the data toward all “5”‘s. For this system to have had ANY real meaning, the natural average should have been somewhere around 3.75 to 4.25, but the current wording makes it useless. I fault eBay for that. The middle ground of “neither this nor that”, is so ridiculous, I can’t even begin to explain. There should have been NO wording associated with those 5 stars, except there should have been a “Poor” next to 1 star, and “Excellent” next to 5 stars. Everyone knows what a 5 star grading system is, they don’t need prompting on each star, especially prompting that related all the 4 star entries as “everything went just fine, no problems, no issues”. I think the grades would have worked out much better this way instead of how they did it with the ambiguous language that’s being used now.

But don’t worry. They hear us. They’re listening. We’ll screw it up for you again by the holidays. We promise.

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