eBay Analyst Day: Are Trusted Sellers Doing Well?

Posted on March 12, 2009. Filed under: eBay | Tags: , , , |


During eBay Analyst Day, eBay made the point: “Our trusted sellers are doing well…..”

Now, that is quite an interesting statement.  I think the truth is closer to:

eBay sellers DSRs improved from Q4 2007 to Q4 2008 for the following four reasons:

1. Removal of nonperforming sellers 
2. Buyer education
3. Increase in sellers who offered free shipping
4. Increase in sellers who stopped selling internationally

Now, while the first reason (removal of nonperforming sellers) does work to increase trust on the site, the next three reasons are unrelated to trust issues.  Sellers developed campaigns to educate buyers on the “true” meaning of what a 4 rating means and sellers included inserts into boxes asking for 5 star ratings as well as put wording in their auction descriptions asking for the same.  This “buyer education” caused DSRs to increase when nothing had actually changed.  Seller’s performance did not change.  And sellers who began offering free shipping to improve their DSR ratings are not necessarily more trustworthy.  These sellers either increased the price of the item to cover the free shipping (more final value fees for eBay translates into less margin for the seller) or who kept the product price the same but took less margin on the transaction to pay for the free shipping.  Either way, less margin for sellers does not mean they “are doing well”.  It is just the opposite in fact.  And sellers who stopped selling internationally in an effort to improve their DSR ratings would not be considered as “doing well” in my book.

So, let’s take some numbers to illustrate a point.  Let’s say at Q4 2007, there were 24 “trusted” sellers, 6 poorly performing sellers, and 70 sellers who had below 4.8 DSRs but were not in danger of having their selling privileges suspended.

Now assume during the next year eBay removed those 6 nonperforming sellers.  These are actually sellers that eBay should never have let on the site to begin with but, in their greed to take everybody’s money in return for the privilege of listing on eBay, they were let on. 

Further assume that 22 of the original 70 sellers whose DSR scores were below 4.8 were able to raise their DSR scores to 4.8 or above during the 12 months making it a total of 46 trusted sellers – 49% –  and 48 untrustworthy sellers.  What is the most likely reason for the DSR scores to have been raised?  

First, as previously stated, sellers developed campaigns to “educate” buyers on the “true” meaning of 4.0 ratings.  Websites sprung up YouTube videos created, and guides were written on eBay all to educate eBay buyers.   Buyer education worked to increase the DSR ratings without there being any underlying change in the trust or seller performance. 

Besides buyer education, the other major reason DSR ratings increased was due to to more free shipping being offered by eBay sellers.  By eBay’s own admission, the lowest DSR rating for sellers is the Shipping and Handling DSR rating and the number of sellers who offered free shipping in Q4 increased dramatically (probably in response to the seller discounts offered to sellers who gave free shipping in Q4). 

In Q4 2007 there was likely several sellers who had 4.8+ DSR ratings in 3 of the 4 areas but had just under a 4.8 in shipping and handling.  An increase in the free shipping offerings may have caused their DSR ratings to improve.

Of the 22 sellers who saw an improvement in their DSR ratings from Q4 2007 to Q4 2008, let’s assume 4 of them actually improved their performance while 6 of them began offering free shipping to get the S&H DSR to 4.8+, another 6 worked hard to educate buyers to give them higher ratings without any change in their customer service, and 6 stopped selling internationally so that their DSRs would improve.  International buyers tend to give lower DSR ratings for S&H since it is very expensive to ship internationally.  Thus, DSRs would naturally increase when those buyers no longer left DSR ratings.

So, just how much did trust improve on the site?  Most of the trust improved when eBay removed the nonperforming sellers who should not have been allowed on the site in the first place.  And there may have been some small improvement in seller performance from sellers who were marginally performing.  But most of the increase from the untrusted seller status to trusted seller status was due to reasons unrelated to trust.  And, in fact, two of these reasons – sellers offering free shipping and sellers discontinuing offering items internationally – had the effect of decreasing sellers’ revenue and/or  margins.  So, I wouldn’t say that group of trusted sellers was “doing well.”

But I guess eBay’s assessment of the trusted seller situation is in line with eBay’s assessment of their own performance.  According to eBay, they are doing well and the future for eBay never looked so bright.  Some of us see things just a little different than eBay and perhaps that is why Donahoe is “miffed” about the eBay stock valuation since others don’t have quite the same perspective about how well eBay is actually doing today or will be doing in the future.

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9 Responses to “eBay Analyst Day: Are Trusted Sellers Doing Well?”

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I was one of the sellers that moved from the less trusted to the more trusted category because I improved my Shipping & Handling Cost DSR score from 4.7 to 4.9 by taking the steps you outlined in your article. I stopped shipping internationally. I started offering free shipping on all of my listings and worked the cost of shipping into the product retail. I also educated my buyers about how eBay’s DSR system really works with notes in my shipping confirmation e-mail, my packing slips and in follow-up e-mails requesting feedback. In the follow-up e-mail I also remind the buyer that they received free shipping and I note the date the order was received, the date the order was shipped and the date the order was received by the buyer.

I’ve always been a conscientious seller and try to treat my buyers the way that I would like to be treated as a customer. I’ve made no changes to the way I service my customers since the inception of DSRs. The only thing that’s changed is the extra work that I have to put into buyer education, my loss of international sales (which is also eBay’s loss) and the transfer of shipping costs into the product retail.

eBay seems to never miss a chance to misinterpret their own data. If you go in with a pre-conceived notion and a strong desire to prove that preconception you can easily manipulate the data. Just ask George Bush how that approach worked out for him.

A neutral is a negative.

A 4.0 DSR is good for a buyer but bad for a seller.

Free shipping is a winner according to Norrington but “isn’t fooling buyers” according to Donahoe.

Ebay encourages international sales but allows international buyers to damage sellers with low shipping DSRs.

A non paying bidder can leave negative feedback for “item condition” for an item they never paid for, an item that was never sent and an item the buyer has never seen.

And so it goes…

Buyer education is a HUGE difference in those numbers. I do everything the same except now I spend some extra money and time to include a little education for the buyer explaining how eBay penalizes me for a “4”.

Consequently, my DSRs have gone up from 4.7s and 4.8s to 4.9s and 5.0s and repeated 20% discounts (except for that rare negative).

Ebay is simply mistating what’s happening out there.

And the funny thing is, I don’t see where they’re tracking the rise in “bad” buyers. I used to process maybe 3 returns in a whole year and now it’s 3 a month! Same items, same everything except the buyer knows there’s nothing I can do about it.

If enough of this continues, people like me will go away. My listings are down over 50% year over year and my eBay fees are down 75%. I wonder if I’m the only one…

I think they just made all these charts about trusted sellers because they were desperate to find some charts about the marketplace that showed growth. Since the normal charts didn’t, they picked some other numbers from their handy piles of bogus data, which they use to steer the corporation.

“These are actually sellers that eBay should never have let on the site to begin with but, in their greed to take everybody’s money in return for the privilege of listing on eBay, they were let on.”

Please join us in the real world. Not one ebay type website pre-qualifies sellers.

The simple truth is big time scammers flocked to ebay because buyers forgot the basic rules for protecting themselves because they were greedy for a “deal.” Wiring big money to an unknown person to isn’t smart. Can anyone say Nigerian Diamond scam? They never bothered to read or ask about shipping rates and then complained after the fact about high shipping. Gullible thoughtless buyers bring scam sellers.

Tuffy, buyers are “pre-qualified” on Amazon in many respects.

Nevertheless, I do agree with you about buyers’ greed in looking for a deal-to-good-to-be-true is what caused a significant number of problems on eBay. But now eBay is protecting the gullible, the stupid, and the greedy from themselves.

Well, I was an Ebay Store owner from 2000 until last year. I quit, closed my store, went to other venues and am launching my own domain/website.
Because of Ebay insisting on PayPal or Merchant Accounts first and DSR’s second. I had a 100% perfect feedback rating.

My comment about the article: Hilarious, Ebay caught manipulating facts and lying once again. What else is new?

The volume of blocking members from buying from me because they questioned the shipping fee, wanted to negotiate a price, or they marked my DSR with a 4 soared. At the end I spent more time block potential buyers than anything else. It is crazy and there is no way to do well under those circumstances.

My DSRs were 4.8+ I even had a day in December that my S&H fees was a straight 5. Unfortunately my numbers didn’t provide any benefit because I refuse to take a loss by putting my prices through the floor. I don’t do this for fun – it is my job and i am not going to pay eBay to be its inventory & employee while “it” offers the best deal while my family starves. Yeah, if I am not benefiting I am not staying.

By the end of Feb my gross on eBay was like 635.00 Feb 2008 with my store closed for a week my gross was 4,100+ – So what happened eBay? I was a trusted seller as defined by DSRs – I certainly was not doing better lol what a joke

My fees for that 635 came to 178 for eBay only. I have already sold more than that on Bonanzle this month and my total fees so far are $24.00 – yes you read that right $24.00. And, it is fun, friendly, helpful…..wow! thinking about the differences has brought tears to my eyes. Bonanzle has given me a peaceful atmosphere absent of hostility and fear.

Bill & Mark work tirelessly to make my life better. Their interests are about my success – what can they do to increase my successes and how simple can they make my job. Bonanzle is about me – and every member – buyer/seller/both we are what matter.

It is amazing to feel supported as opposed to exploited. eBay would literally throw me under a bus if it meant they could gain more PayPal users by selling my products for $1.00. That is the reality of eBay. eBay cut me off from visibility in an attempt to coerce me into selling at a loss with free shipping. eBay threw me under the bus in an attempt to control my inventory.

I don’t care where anyone goes, but get out of the abuse. It is by far more costly to pay eBay than it is to sell anywhere else. It is a violent environment and the cuts will only grow deeper. It is a terrible place and I’ll never ever sell on that venue again- ever!

Selling on eBay has become a nightmare. Out of 2240+ positive feedbacks in the past 12 months, I received 2 negatives recently. (My past 11 month had been 100% positive feedback. My DSRs for the past 30 days are above 4.8, except shipping which is 4.69 as I refuse to play their free shipping game) One from a nonpaying winner, who therefore never received the item & has harrassed me with degrading feedback & email. Also networked freinds to do the same. Another from a lady who did not like the color of her item, though 6 pics were taken outdoors in plain sunlight. She was offered a full refund, in fear of negative feedback, but did not return the article. I tried to get through to eBay to correct the feedback on the item that was never paid, nor received, to no avail. Automated reply stating I would have to get a court order to remove this false, degrading feedback. Last week I received a phone call stating eBay was suspending my account for at least 30 days, within the next 72hr because my customer satisfaction fell in the low 1%. Where do they get this percentage??? Needless to say I was devastated, as this has been my job since I retired from nursing on a very limited income. I was told to call Trust & Security to make an appeal. After many attempts, I finally got a person on the phone who assured me she would send an appeal immediately & a “real person” would get back to me within 72 hours before any action would be taken. The next day, I arise to find my whole store had been sent to ebay cyberspace. At least 2 months worth of work on very detailed long descriptions of 102 vintage gowns, hats, etc. vanished!
Needless to say most eBay buyers are very honest. But since the feedback changes, I have made full refunds plus return postage on items returned that have been worn & stained in order to avoid negative feedback.
A year ago, I enjoyed the ebay experience. Since the “no negative feedback for buyer” change & the inability to resolve any issue with eBay, I have lived everyday in fear of buyers with no scruples.
Needless to say, I will return to nursing where there is job satisfaction.
However I have alot of inventory I need to sell. Vintage clothing for costumes & reenactments is the main items. Any suggestions for a good site would be appreciated.
I guess eBay does not need honest sellers who just sell a measly $72,000 a year on their site. Not to mention buying $24,000 off their site to redo & relist. I am just a tiny pea in their hugh brewing cauldron!

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