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eBay Live – So Why Is Everybody So Upset, Anyway?

Hi gang,
Ahhhhh, back home in beautiful Charlotte. 95 degrees and raining. Welcome to the South in a prematurely hot summer.

I wanted to give my opinion as to why there was so much venom this year at eBay Live. And by venom, I’m talking about this:

[youtube]http://youtube.com/watch?v=IHY0r3Sn9rc[/youtube]

And this:
[youtube]http://youtube.com/watch?v=zBX4vRjPHXM[/youtube]

Both of these incidents occurred at the town hall meetings on Saturday and in a few breakout sessions – I was in attendance at both.

Ok, so what’s got everybody mad?

One word – Feedback

eBay’s Feedback system was probably the single most brilliant stroke of genius that eBay’s founders created. By giving a buyer the ability to rate a seller on a transaction, eBay created the ability for a buyer to “trust” a seller. Let’s face it – without feedback, would YOU give someone you never met in another state your money before receiving your won item? Feedback was a beautiful idea.

There are 4 changes that eBay recently made to the Feedback system that have proven to be controversial:

1. They removed the ability of the seller to leave the buyer bad feedback. Before this change, both a seller and a buyer could leave each other a positive, a neutral, or a negative feedback. So if a buyer won an auction and didn’t pay, a seller could leave negative feedback on the buyer to warn other sellers that this buyer was a deadbeat.

On the opposite coin, if a seller sent an unacceptable item to a buyer, the buyer could give the seller a negative.

So the official eBay line is that when a seller leaves a buyer a negative, it tends to drive the buyer off the site, and for that reason, 3 weeks ago they removed the ability of a seller to leave anything other than a positive feedback for a buyer. Most sellers, as you may imagine, are pretty upset about this.

2. eBay very quietly began counting Neutrals as Negatives. So let’s say you buy something, and it arrives a few days later than you thought it would. You’re happy with the item, but not with the shipping time, and so your overall impression of the buying experience is just ok. So you leave the seller a Neutral – it wasn’t a great transaction, but it wasn’t bad either.

eBay now counts that Neutral as a Negative for a sellers rating.

Brian Burke, the head of Feedback policy at eBay, stated at eBay Live that there is a lot of evidence to suggest that a Neutral from a buyer really is a Negative, and so eBay now counts it as such.

As you might suspect, many sellers disagree with that assumption and very vocal about it during Live.

3. eBay introduced Detailed Seller Rankings, or DSR’s. DSR’s are a more granular way to rate a buying experience – a seller can be ranked on a 1 to 5 point system across 4 different aspects of the transaction – Item as described, customer service, shipping cost, and shipping time.

On the surface that sounds like a fine idea, and implemented correctly, it IS a fine idea.

DSR’s are a sore spot for sellers for a couple of reasons

a)  eBay is not educating buyers about what DSR’s are and what they mean to a seller.  For example,  if you gave a seller 4 out of 5 stars across the board, and this is hard to believe so stick with me,  that seller will lose their Powerseller status, be buried in search results, and not qualify or any incentives whatsoever.

b)  50% of DSR ratings revolve around shipping.   One of them,  Shipping Cost, really gets under sellers skin because sellers state shipping costs in the auction – what is there to rate?    It was pointed out several times that even eBay sellers with Free Shipping have 4.6-4.8 DSR’s.

4. eBay has now implemented a punishment/reward system for sellers based on DSR’s.

The system works on 2 levels: Best Match, and Seller Rewards

Best Match is the new “finding” system on eBay. The intent of BM is to show the most relevant search result. Best Match not only looks at relevant titles, but it also takes into account a sellers feedback score, their DSR’s, when the auction ends, trust and safety issues, etc. The idea is for a buyer to find the right item from the best seller when he/she does a search.   Again,  a great idea.

Seller Rewards is a financial reward to sellers who maintain high DSR’s.  Currently a seller can earn 5% or 15% off Final Value Fees if DSR’s are high enough.

So DSR’s are incredibly important to a seller.   If your DSR’s are not very good -  4.0 – 4.5 range,  eBay will still happily collect fees from you to list,  but they will bury you in search results so you are rarely seen, and you certainly won’t qualify for any discounts.  A lot of the passion that I’ve seen around Feedback is this exact issue – sales and profitability for a seller are seriously impacted by your DSR’s now.

I know several large sellers who experienced as much as a 40% drop in business the day Best Match rolled out, and have not recovered.  That’s a business ending event.

When you mix all of these changes together,  you get this cauldron of Feedback changes that mark a serious change from the way eBay has done things in the past.   eBay has a lot of data on the feedback changes, and they did speak about the number of Powersellers who get 15% off, how neutrals and negs have changed since sellers stopped being able to leave negs on buyers, etc.

It’s not that I don’t believe the stats – I don’t think eBay would just flat out lie to us -  but based on the human reaction I saw from eBay Live attendees,  I would say that there is a strange disconnect between the facts and the feelings about the Feedback changes.

Kevin

http://inflatablemadnessdvd.com

http://buybackmadness.com

About the Author: Kevin Harmon

Kevin Harmon is a freelance e-commerce business consultant and blogger. He is the former CEO of Inflatable Madness, LLC, one of the largest DVD and CD sellers on eBay and Amazon, and Red Shorts Media, LLC, which operated multiple e-commerce media buyback websites.