More information on the TnS crackdown @ eBay

Since we originally broke the story on the change in policy at TnS, there has been much more communication coming out of eBay on the matter (a positive).  Here's some helpful links for those still trying to get their heads around this:

1. Lynda Talgo w/ TnS posted a lengthy description of the policy change and actions that TnS are taking here.
2. Matt Halprin did a podcast with AuctionBytes that lives here and the transcript is here.
3. Ina@AB has had excellent coverage of all things "neutral=negative" and this is a good starting point.

Some thoughts now that this has had a couple of weeks to shake out:

• I guess I still don't fundamentally agree with the sweeping statement/policy change that neutrals are now negatives.  When I go read neutrals, sure some are negative, but some are positive too.  It seems a fairer way to do this is to apply a ratio - maybe 50/50.  Because we are seeing many cases where the "neutrals are not a positive" policy is swinging sellers as much as 3-5%.  So they would have a 98% positive, but in a world where neutrals are negative they swing to 94%.  When you look, that's not the case.
• The one datapoint that permeates everything is this 1% of sellers generate 35% of the bad buyer experiences.  eBay does a great job with data to get their point across.  One trick with data you always have to ask yourself is why are they using percentages and not absolutes?  In this case, by eBay's definition of a seller, I estimate there are 1-2m sellers.  Let's pick the middle - 1,500,000 sellers.  1% of those are 15,000 sellers that are impacted.  1% is a small number ("you have to remember this only impacts 1%!!") and to me 15k sellers is a big number.  Digging deeper, I'd assume that 80%-90% of the sellers won't be touched because they don't do enough volume (very casual sellers) to fall into the policy.  So you're really looking at 5-10% (or more) of the truly active sellers.  As you ramp up the volume curve, we're seeing this impact large chunks of the top sellers (it certainly isn't 1% of the 20k top sellers (200), it's more like 10-20% (2-4k).  That's why I think you see auctionbytes hearing from many more sellers than you would think on this minor 1% issue.
• Final thought here, these restrictions are clearly not thought up by people that run retail businesses.  Here's an example of how it works from the chatter post:
  • For example, consider Seller_Steve, who typically sells $1000/week in merchandise, and then receives a restriction to 75% of his historical weekly volume. In this example, Seller_Steve would be allowed to list items until his completed sales over a 7-day period reach $750 (75% of $1000), at which point he would be no longer able to list. He could list again when his sold volume over the past 7 days dropped below $750.
• Ok, eBay has changed a policy on you without notice (neutrals are negs) and you want to fix that in your business, so you're going to have to ramp up your customer service, maybe invest in software, maybe work on some inventory revamping/sourcing.  Concurrently eBay hits you with this 75% limit so you have to figure out some tough choices - do you lay off 25% of your staff (because you are guaranteed a 25% reduction in revenue).  Which products do you sell in your now limited biz?  Should you liquidate stuff in fear of going out of biz? What should you soure - obviously less, but zero or just 75% of what you sourced before?    That leads to: How do you possibly simultaneously improve customer service in a business that has a guaranteed 25% revenue haircut?
• We'll have to see, but I imagine in 30-60 days this will cause at least 50% of the sellers impacted (50% of 15k = 7.5k) to flame out.  Can eBay really survive without 7-8k sellers?  Only time will tell...

Readers what do you think?  Are there 7-8k bad apples that need to go or are we shooting too many dolphins in the head here?

Comments

[DIGUSTED WITH EBAY]

HAS MR. PHILLIPP JUSTUS VIOLATED THE "EBAY CODE OF CONDUCT AND ETHICS FOR SENIOR FINANCIAL ADVISORS" THE BOARD OF DIRECTORS HAS IT SPELLED IN BLACK AND WHITE HOW TO BEHAVE WHEN REPRESENTING THE STOCK HOLDERS BEST INTEREST. ANY ONE THAT SUPPORTS THE POLICY CHANGES WITHIN EBAY SHOULD REREAD THEIR COPY,.....

Introduction.
The Board of Directors of eBay has developed and adopted a code of ethics for its senior financial officers to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure, and compliance with governmental rules and regulations. Senior financial advisors include, the Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, Chief Accounting Officer, the controller, and any persons performing similar functions.

Honest and Ethical Conduct. Senior financial officers owe a duty to eBay to act and perform their duties ethically and honestly and with the highest sense of integrity. This requires an officer to avoid actual or apparent conflicts of interest between personal and professional relationships, which requires observation of both the form and the spirit of technical and ethical accounting standards.

A "conflict of interest" occurs when an individual's private interest interferes or appears to interfere with the interests of the company. Conflicts of interest are prohibited as a matter of eBay policy, unless they have been waived by the company. In particular, a senior financial officer must never use or attempt to use his or her position at the company to obtain any improper personal benefit for himself or herself, for his or her family, or for any other person.

Any senior financial officer who is aware of a conflict of interest, or is concerned that a conflict might develop, is required to promptly discuss the matter with Audit Committee of the Board of Directors, the Chief Executive Officer or the General Counsel.

Disclosure. Senior financial officers are responsible for ensuring that the disclosure in eBay's periodic reports is full, fair, accurate, timely and understandable. Therefore, senior financial officers are required to familiarize themselves with the disclosure requirements applicable to the company as well as the business and financial operations of the company.

In the performance of their duties, senior financial officers are prohibited from knowingly misrepresenting facts. A senior financial officer will be considered to have knowingly misrepresented facts if he or she knowingly (i) makes, or permits or directs another to make, materially false or misleading entries in an entity's financial statements or records; (ii) fails to correct materially false and misleading financial statements or records; (iii) signs, or permits another to sign, a document containing materially false and misleading information; or (iv) falsely responds, or fails to respond, to specific inquiries of the company's external accountant.

Any senior financial officer who is aware of a material misrepresentation or omission in eBay's periodic reports is required to promptly report the matter to Audit Committee of the Board of Directors, the Chief Executive Officer or the General Counsel. Senior financial officers are responsible for adequately supervising the preparation of the financial disclosure in the periodic reports the company is required to file. Adequate supervision includes closely reviewing and critically analyzing the financial information to be disclosed.

Compliance. It is eBay's policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of each senior financial officer to adhere to the standards and restrictions imposed by those laws, rules and regulations, and in particular, those relating to accounting and auditing matters.

Any officer who is unsure whether a situation violates any applicable law, rule, regulation or company policy should discuss the situation with the General Counsel or the Chief Financial Officer to prevent possible problems at a later date. Failure to do so is itself a violation of this code. To encourage officers to report any violations, eBay will not allow retaliation for reports made in good faith.

* THE CHOICE IS UP TO YOU BECAUSE IT COMES IN TWO CLASSES.

....RHINE STONE SHADES OR CHEAP SUNGLASSES.

[NukThem]

My feedback on SNP

-eBay should give warning ahead of time and not just ban your account out of the blue.
-If eBay is so concern about buyer experience why take them weeks to reply an email?
-World’s worst customer service is eBay, paying them over $80,000 and no one cares about you.
-eBay does not care about their customers, and does not care about my other 30 full time employees or their family. They only care about their stock price.
-My eBay account manager knows nothing about selling on eBay, hardly returns any phone call, and telling you are the worst on eBay, yet we have 99 percent positive feedbacks.
-Thousands of buyers thank us everyday
-Had to lay off 10 full times
-Had to hire extra customer service staffs to take care feedback.
-1/2 of your business sales goes to eBay, but they treat you like nobody
-Buyers are using this new policy to threaten negative feedbacks for lowering the sales. You end up either spending hours canceling the eBay sales or giving in to customer’s unreasonable request. My account manager said to me buyers have the right to threaten negative feedbacks if they wanted to.
-For a large volume seller there is no effective way to remove neutral or negative feedback, even if using square trade. No batch processing.
- Square trade charges you $19.99 per request to remove feedback and if you have few hundred of negative\neutral feedbacks can cost you $$$
-Even if you rating is 99 percent positive you still get suspended for 7 days.
-Will take you weeks to get back on track with sales
-Went from 90 percent sell-through rate to 75 percent after suspended for 7 days.
-One monthy after 7 day suspend now back up to 78 percent sell-through rate.
- If you sell only on eBay, now is the time to change your business
-Move away from eBay ASAP or you will feel sorry
- eBay is unwilling to work with you, pushes you around with what ever they say, and hardly understands the suffering sellers are having. They just don’t care about you!!

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"Smart Solutions"

[Bubba]

Just leave eBay. You all know that in January they'll raise the prices again -don't you? The internet gets bigger every day. There's more "potential" money out there than anyone realizes. The government has looked the other way for awhile, but the time will come when eBay will DEMAND a social security number from all sellers - THIS WILL HAPPEN!! Those in politics right now are too old to worry about the internet. They're too old to worry about emails and blogs too. But where there's a tax to be had, a government official won't be far behind.
This new restriction on eBay has affected me too. I worry about retaliation feedback from my non-paying buyers, so I am now reluctant to leave negatives or even Unpaid Item Strikes against anyone. I sell toys, so many of my buyers are...shall I say, IMMATURE. They buy. Don't read. Don't pay. And don't care if they leave me a negative or I leave them a negative. All of this anger and confusion, buyers and sellers coming and going on different accounts, will only lead to one thing - A MANDATORY SOCIAL SECURITY NUMBER!! Yes - It WILL happen...then try and hide your Paypal money from Uncle Sam.

[Chad MacQueen]

I have felt the long arm of the new Ebay rule. I am kicked off for ever with a 98.7 feedback score and was a powerseller at the time. I have been buying and selling on Ebay for 8 years and because of a bad month I am banned from Ebay they also closed my friends account that is currently living with me and has the same address. He has never sold anything and doesn't plan to and they refuse to open his account because our address is the same. I admit I handled things wrong when I had a problem getting things shipped but I refunded all money collected with an explanation of what happened. Ebay first restricted my account where I couldn't sell anything for 30 days and told me I needed to get my positive feedback to increase. I am no genius but it's pretty much impossible to raise your feedback if they don't let you sell anything at all. I had already corrected the problem and got out of the DVD business and was selling something else and had no negative feedback in 60 days when they retricted my account. What has me mad is the fact that this new rule wasn't really explained and the fact that a 98.7 with 24 negative and 19 neutrals in the last year can get kicked off when there are BIG dvd sellers on Ebay with 98 percent feeedback or less doing business as usual. I have seen people selling bootleg dvds on Ebay with no problems. If you want to look at my feedback my id is lknballdiver I started selling golf balls. Thanks for letting me vent.

[TomH]

So, Neutrals are Negative. Something like four and four equals five. Well, I would like my several thousand Positive feedback from repeat customers counted. And, how are the completed but no feedback transactions counted? How about, since eBay is totally irrational, one-third Positive, one-third neutral (Oooops thats negative). Oh well, we are eBay and we will do that anyway, after all the seller is wrong and the buyers must be right. In eBay land I have three thousand plus happy customers and five blackmailing, lowlife, won't read, low to no feedback idiot buyers--and I'm the bad guy?

[John Lindley]

I wonder if the eBay owned store that sells / auctions eBay branded products has been purged. I seem to remember an extraordinarily high percentage of negatives having accrued to them and that they were thus forced to hide their feedback. It seems that they violated a whole raft of their own rules, as well as basic principles of commerce in this operation.

[Bob]

I don't agree with eBay's new policy but I think sellers can adapt to anything given enough time to make adjustments. eBay didn't allow any time and now sellers once again have been caught with their pants down. Couple this with the timing of execution (summer season is slow for many retailers) and it's a double whammy to the seller pocketbook. My experience is one account restricted, 3 accounts good to go. My adjustment is simply moving items from the left hand to the right hand. Many sellers haven't seen the strong arm of eBay and for those sellers I feel sorry. We suffered a SNP shutdown 2 years ago and back then it was just a kiss of death. No communication from eBay at all for 2 weeks; all listings and all stores closed in seconds without any notice and you were left out of business and no way to fix it. Ina posted our story back then and many eBay sellers said we had it coming and needed to leave eBay. Now those same sellers find themselves in eBay's crosshairs and wish like heck they had a dingy to jump into because eBay has now sunk their ship. If you're going to sell on eBay and make it a serious business you need to start digging and learn how to create and maintain several IDs and make sure none of them ever get linked to another. It's not difficult to do if you do some serious research. We are still recovering from the sucker-punch eBay threw at us 2 years ago and now have 3 unlinked PayPal accounts and 4 unlinked eBay PowerSeller accounts. I've learned (thanks to eBay) that it's insane to expect them to behave responsibly or ethically and it's YOUR job to protect your business. If you are running on eBay under one account and think you're safe and doing a great job; you're only kidding yourself. One rule change with eBay and you could find yourself unemployed.

One last note on the rule change is the double standard for applying it. As I mentioned before, we have one restricted account and I emailed and asked for an explanation because I can only come up with 3.9%. I received an answer but not any information on how they arrived at 5%+ while I can't find 4%. I even used the toolhaus tool and it says 3.8% for last 90 days and we had one INR. In my second email to T&S I mentioned a competitor that is running a solid 15% negative and wondered why he wasn't bothered. T&S responded for me to worry about my own affairs and they would "take a look" at this other seller. That was 3 weeks ago! I emailed last Monday and told them that I doubt they "took a look" at this seller because now he's at 23% negative, not counting any eBay or PP disputes. It wouldn't surprise me if he's over 30% with those tallied in. Their response was take care of your own business and we "may" read future messages from you but probably won't respond. So much for eBay wanting community members to report violations. You can search eBay for days and won't find a link or email subject for reporting sellers with very poor feedback. No way to bring it to anyone's attention so I took the opportunity of reporting this seller by responding to my restriction notice. I discovered they didn't want to hear what I had to say about any other seller. I won't post this seller's ID again (check Ina's blog if you're curious) but seriously to restrict thousands of seller while letting a 95.9 FB with 23% neg run free is almost criminal. Saying he fell through the cracks is one thing; no action after being informed 3 weeks ago is quite another! eBay T&S has needed some serious management changes for years; this just proves it once again. Thanks for the opportunity to post and as always, enjoy your comments.