eBay Cannot Live by Spreadsheets Alone

Posted on November 26, 2008. Filed under: eBay | Tags: , , , , |

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Today, for some reason, I was thinking about a movie I watched awhile back titled “Vantage Point” where a true understanding of the situation required the movie goer to see what was happening through each viewpoint of several different people who were all a part of one single event.  The movie really made me think about something — the disconnect between eBay and its sellers is often times the result of each party viewing the same thing from a completely different perspective.    

I will use a very simple example to illustrate my point.  Many eBay sellers reported that the number of nonpaying bidders began rising just after they were no longer able to leave negative feedback for nonpaying bidders.  Yet, eBay claimed that while a few sellers may have seen an increase, the problem was not sitewide.  eBay publicly stated that the percentage of nonpaying bidders, in the aggregate, did not rise.  So, who was telling the truth?  Actually, both eBay and its sellers could be correct. 

  

(1) Assume there are 6 different sellers on the eBay site with the following stats:

                UPI %     Transactions        UPI #
Seller A 8 1000   80
Seller B 4 1000   40
Seller C 5 100   5
Seller D 4 100   4
Seller E 10 50   5
Seller F 0 10   0
    2260   134
 
Aggregate UPI % 6

 

(2) Assume that seller A leaves the site either voluntarily or involuntarily and none of the other statistics change for the remaining 5 sellers:

                UPI %     Transactions        UPI #
Seller A na na   na
Seller B 4 1000   40
Seller C 5 100   5
Seller D 4 100   4
Seller E 10 50   5
Seller F 0 10   0
    1260   54
         
Aggregate UPI % 4

 

(3) Assume now that seller A leaves the site either voluntarily or involuntarily and all of the remaining users see their UPI numbers increase:

                UPI %     Transactions        UPI #
Seller A na na   na
Seller B 5 1000   50
Seller C 6 100   6
Seller D 5 100   5
Seller E 20 50   10
Seller F 10 10   1
    1260   72
         
Aggregate UPI % 6

 

So, in the examples provided above we can see that it is possible for all sellers to experience an increase in the number of nonpaying bidders yet the aggregate percentage would remain unchanged.  eBay pours over mountains of data to analyze changes to the site and to forecast what will likely happen if they make a particular change.  But because eBay looks at numbers only in the aggregate, they often do not see what individual sellers are experiencing and eBay may miss some very important nuances.

Take for example what happened when eBay recalculated neutral feedback retroactively.  Shortly before the rollback of the recalculation I spoke with a very nice TSAM who shared with me that eBay had been unprepared for what had happened.  She told me that eBay had pre-calculated only a slight change in the overall percentage sitewide among all users.  According to her, in the aggregate, the change to feedback percentage scores was predicted to be negligible even though it was recognized that there would be some sellers who would see a significant change in their percentage.  However, it was not realized until after the recalculation had taken place just how much of a variation had occurred among individual seller accounts and just how many accounts were so dramatically affected.

It is not surprising that each eBay seller cares most about their own individual circumstances and is concerned about how each of eBay’s changes affect them personally.  And it is also not surprising that eBay has to make decisions that they think will benefit its marketplace without being able to give consideration to the effects on each and every member of its community.  However, when eBay focuses on aggregate numbers, which are the simply the summation of all individual numbers, it is very different than considering the affects on the members of the group as a whole.   

When most of the eBay community members are affected negatively by a new eBay policy, even when the aggregate numbers show no overall change sitewide, then there is still something very wrong.  From our unique vantage point, we the sellers can see many of the problems with eBay’s recent decisions.  If only eBay would take the time to see things from a different perspective, for once, then perhaps they might finally realize why eBay has such a poor reputation among its sellers.  Analysis and interpretation of the aggregate numbers alone will not tell the real story about what is happening on eBay.

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6 Responses to “eBay Cannot Live by Spreadsheets Alone”

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I just checked out my NPB’s on Monday. It does seem to me that 08 NPB’s are down signifigantly. But then again, so are sales. Therefore the volume numbers don’t compare/match year over year, just the calendar days I guess. More ‘mutual agreements not to complete’ this year too.

Great post.

A good example of the disconnect can be heard on the recent ebay Webinar available online.

A bicycle seller with both ebay and brick and mortar sales, calls in with his own numbers and his own recent ebay sales experience. He gets swatted down by ebay’s Brian Burke who wields his/ebay’s data “contradicting” the bicycle seller’s own experience in reality.

REALITY gets trumped by ebay’s numbers.

This is a particularly damning example of eBay’s myopia:

I spoke with a very nice TSAM who shared with me that eBay had been unprepared for what had happened. She told me that eBay had pre-calculated only a slight change in the overall percentage sitewide among all users. According to her, in the aggregate, the change to feedback percentage scores was predicted to be negligible even though it was recognized that there would be some sellers who would see a significant change in their percentage. However, it was not realized until after the recalculation had taken place just how much of a variation had occurred among individual seller accounts and just how many accounts were so dramatically affected.

No prediction was required in this case. eBay possessed beforehand the entire dataset needed to calculate the histogram of sellers who would be affected to a significant degree by this change, including calculated the counts of how many would be driven below 99.5%, 98%, etc. I certainly looked at the data and wondered how they were going to handle it when Buy.com no longer made the 99.5% cut. The data was all there. eBay was just too stupid to look at it.

Ignatius, I heard that as well. It is interesting that nobody at eBay believes that any seller is knowledgeable about anything, not even that the seller knows their own stats and information. Surely a seller whose information does not jive with eBay’s aggregate numbers must be wrong. Giving them the benefit of the doubt, I attribute eBay’s arrogance to their lack of experience and lack of understanding of how their own platform actually work.

Nadine, it didn’t even cross managements’ minds to look at the effects on individual sellers. eBay’s entire focus on recalculating neutrals to negatives was to do so in order to “give buyers more confidence in the feedback system” and that lowering feedback percentages was needed to make buyers feel more comfortable in leaving unfavorable feedback in the future. How a large company such as eBay can continue to make such ignorant decisions does amaze me, but not as much as it once did.

brews,

It never crossed management’s minds? Well, doesn’t that just say it all? So when John Larouche speculated that eBay must be “culling the herd” since there was nothing to be gained from counting neutrals as negatives, unless they deliberately wanted to upset the sellers, he was giving eBay too much credit? They really are that stupid. Wow.

Ebay is going to become a textbook case of how extremely smart people can create an extremely stupid institution.

Super story. Ebay continues to keep it’s head in the sand while good sellers move to Amazon or their own marketplace. Whether it be Yahoo Merchants or Auctiva or where ever we decide to land. The new system of ebay allowing buyers to use the Dispute process as extortion without payment has to come to an end. Sellers have no recourse but to try and weave through ebays tangled web of HELP columns. Best of luck to all. I’m moving off ebay after 11 years of watching the ghost of ebay past come by.


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