Coming Soon: eBay Counts Positives as Negatives

Posted on July 30, 2009. Filed under: eBay | Tags: , , |

Recently, I have devoted more than a few blog posts to discuss the recent eBay announcement relating to the new eBay seller policy requirement relating to the maximum number of low DSR scores allowed.  But I am going to write this one last blog post about that issue so thanks for bearing with me. 

I think eBay has the concept correct, measuring customer dissatisfaction instead of focusing on the DSR average, in determining which sellers should be removed from the platform.  It’s the details, though, that I have a problem with.

There are many discussions about this issue on the eBay community boards and it is obvious that many eBay members do not grasp how eBay will be calculating this new DSR measure.  And I believe that this new measure of calculation, where positives equal negatives, will cause an even greater outcry from the community than when eBay counted neutrals as negatives.

Yes, I just made the statement that eBay will begin counting positives as negatives in October 2009.  Consider a buyer who wins 10 items on auction for a great price.  The buyer knows the shipping costs in advance.  The buyer pays the invoice but is disgruntled because he would rather get free shipping on his great deals, especially because this buyer intends on reselling the items in his brick and mortar store or on Amazon where he can get a higher ASP for the items.

The buyer receives the items quickly and is pleased with his great bargains.  He leaves positive feedback for all 10 items (because if he left neutral or negative feedback the seller would block him from future purchases and no way does this buyer want to miss out on the great deals in the future from this same seller) and leaves favorable ratings for all DSR categories except the shipping and handling in which case he leaves ten number 1 ratings.  After all, the shipping and handling that he had pay (known to him in advance) is unreasonable in the buyer’s opinion because it is too high in  relation to the very low price at which he won the items.  So, another buyer who had won the items for twice as much might consider the same shipping and handling cost to be reasonable.

Now, eBay claims that buyers who leave 1s for DSR ratings are so dissatisfied that they are leaving the eBay site.  And that is why eBay is measuring the total percentage of 1 DSR ratings that a seller receives. 

So, in the case I presented above, where the buyer wins items at a bargain and leaves all positive and favorable ratings except a 1 DSR rating for shipping and handling would be counted as a dissatisfied buyer.  And, not only would the buyer be a dissatisfied buyer but he would be a dissatisfied buyer times 10.  If the seller sold 90 other items to 90 other buyers who were satisfied in every way, the seller would still have a 10% low DSR rate.  However, the seller’s feedback rating would be 100% and their lowest DSR rating would be a 4.96 in shipping and handling.  Yet, eBay would suspend this seller because of the 10% low DSR percentage in shipping and handling.

Now, in all fairness eBay does count positives as negatives today.  When a buyer leaves a 1 rating in any DSR they are considered to be a dissatisfied buyer.  However, there are huge differences in how the calculation is done today and how it will be done in October. 

1. The buyer who leaves a 1 DSR rating today is only counted in the calculation one time.  A buyer who purchases 10 items in the same day and leaves all 10 DSR ratings of 1 only counts as 1 dissatisfied buyer today.  In the future, he will have the same weighting as 10 dissatisfied buyers. 

2. Today, the effects of a dissatisfied buyer (one who leaves a 1 DSR rating) lasts only 30 days at most.  In the future, the effects will last a full year (12 months) for any seller who does not sell 400 items in 3 months.

3. Today, eBay allows a “dissatisfaction” rate of 5% before considering suspension.  In the future, the allowable dissatisfaction rate will be 2%.  And because the percentage of dissatisfaction rate is calculated differently (see above), the dissatisfaction rate could be significantly lower in the future if a seller prices their items so that buyers purchase multiple items from the same seller.

And, one last point… again, in all fairness eBay is not hiding this information.  They have made it very clear in the announcements and they have reiterated the information in their Town Hall.  A seller with 100% feedback, 5.0 DSRs in Item as Described, Communication and S&H time and 4.96 in S&H charges, could be suspended if one buyer purchases 10 items and leaves all 10 DSR ratings that are low.  That is the reality.  And eBay is being very forthcoming with the information about the new DSR rating system.

Being a seller who provides outstanding customer service does not guarantee you a place on eBay in the coming months.  In my opinion, there will be even more volatility in the eBay marketplace for sellers (bet you didn’t think that was possible!) with the new DSR rating system computations.  Sellers who most everyone else would consider to be good sellers will find themselves restricted or suspended.     

There are eBay sellers who have publicly expressed that they are looking forward to these changes relating to seller performance.  I would hope, though, that these sellers who are viewing the changes as “improvements” have thoroughly researched how the new system will work.  And, for those sellers who are able to take advantage of the opportunities on eBay in the future I am happy for you.  As for me, I am seeking to increase my selling on venues where there is less volatility and more stability.  I need to continue to focus on sourcing the most desirable product possible and providing the best customer service imaginable. 

As I said in one of my previous blog posts — eBay loves me today and shows me the love by giving me a 15% discount and bestowing a raised search standing for my listings but next year my same performance results will be unacceptable.   I think my 99.9% rating and DSR averages above the site averages  indicate that I am a “good” seller but I don’t meet the criteria of being a good seller according to eBay’s new definitions.  And while nobody likes to be told they are performing below standards and are not welcome, I can handle the truth.  I don’t find the truth to be scary at all.  Information is power and the more information I have the better decisions I can make. 

eBay has been completely upfront with sellers this time around and any eBay seller who does not thoroughly read the changes and understand the implications will not have my sympathy in a few months.  eBay is telling sellers like me now that I will not be welcome on the platform in a few months unless I find a way to make every single buyer happier about paying the shipping and handling charges that I am informing them of in advance.  Sorry, Charlie, but this is one eBay hoop that I can’t jump through.  No hard feelings, though. 

And, with that, I think I have made my thoughts about the new eBay DSR criteria ratings abundantly clear.   So, now, let’s get back to regularly scheduled programming.  I am returning my energies to my ecommerce business, my family, and my home rennovation projects.

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9 Responses to “Coming Soon: eBay Counts Positives as Negatives”

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I really think this logic about buyers who leave “1’s” and “2’s” leaving eBay is ridiculous.

I had a buyer leave me a feedback recently saying “Fast shipping, good product, poor communication” He received the item in 3 days. I highly doubt that he’s going to leave the marketplace for good.

If the buyer really thought he got screwed, he would have left negative.

“Being a seller who provides outstanding customer service does not guarantee you a place on eBay in the coming months.”

All well and good – for a LOT of small sellers they are already moving on since Ebay’s prior changes and best match manipulations has cut off exposure for many of them. This will be just one more step in ridding the site of small sellers…I hope that is Donahoe’s aim – any other reasoning would be suicidal to Ebay’s own business!

Brian Burke confirmed everything Brews is saying in this weeks ebay town hall. Anyone who needs confirmation can listen to the saved webcast at ebay. Also, see the further comments Brews and I shared here just after listening to Burke (comments in Brews, “Water off a ducks back” essay…

Excellent rundown of the effect of the new DSR policy. As a seller that has a good percentage of sales with multiple items to single buyers this could be a killer for me.
It’s not at all practical for me to go with free shipping. Ebay makes it clear their sellers are the bad guys.

…bet Obama is running this site. Sounds familiar. I don’t ebay to tell me when I’m doing poorly; I can look at my bottom line and get a vivid picture. Thank God! I closed my ebay store and haven’t listed for over a year now.

“bet Obama’s running this (eBay’s) site.” I could only hope that somebody like Obama would replace Donahoe, Tellenius, and company!! The brain trust in San Jose is more like Dubya and ex-Vice Presidential candidate Palin combined. Thanks for the gratuitous pot-shot at Obama Len, don’t you have a town hall meeting to disrupt?

Donahoe is a Buddy of Obama’s literally personal friend. Donahoe’s wife encouraged Obama to run for president.

Easy issue to solve.
Since buyer feedback is supposed to be honest, simply prevent buyer from leaving positive feedback and ANY 1 or 2 stars.

Further perhaps require a neutral in order to leave a 1-2 low stars and a negative in order to leave 2-4 low stars [perhaps also make the item as described DSR worth two points in the calculation].

You are one vey intelligent person. That’s the truth!
Thanks for doing the research for me, so that I can readjust my selling strategies on Mein Ebay! Thanx!! joe

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