Neutrals are now negatives in TnS policies...

First, I want to make sure everyone reading understands that I, like everyone in the eBay ecosystem, wants a clean, well-lit marketplace and I agree with eBay's recent take that the bottom performing sellers should be managed up or out.  It's also about time something was done here.  However, it's  easy to get on this "kick sellers out" bandwagon and forget that every GOOD/GREAT transaction on eBay comes from... you guessed it a seller.  As a marketplace manager, it's eBay's job to have clear, easy to understand policies and then enforce/reward them.

Now with that all clear, here's what's happening.

Many great sellers are getting suspended/managed out of the marketplace because without notice, eBay is considering NEUTRALS to be essentially NEGATIVES  In early June, in an obscure message board (not the announcement board).  eBay via a TnS employee called "Policy Steve" (post 17) revealed that:

• eBay has found that the bottom 1% of sellers are responsible for 35% of buyer complaints (makes sense, but note that this kind of abstraction will tend to catch larger sellers vs. smaller sellers just by the nature of absolute numbers.  If I sell 5k items/month, I'm bound to have 50 negatives that would take a smaller seller a lifetime to hit).
• eBay is actively suspending/limiting the sellers that fall into this category.
• When making the "Bad Boys" determination eBay is using this calculation:

"If more than 5% of a seller’s buyers are dissatisfied, as measured by negative and neutral Feedback left or Item Not Received complaints during a 90 day period, the seller is in violation of the Seller Non-Performance policy."

(The bolding/underlining of neutral is mine).

The problem
Here's the problem with this.  Assume you are a large seller and you are running a business and eBay is not a hobby.  You have two people in customer service and those people answer questions and focus on your negative feedback.  Maybe you have 1% negative feedback which is great as a large seller.  For a variety of reasons you have a good bit of neutral feedback (4%).  Now, without warning you are considered a bottom 1% of sellers.  You don't have any announcement that neutrals are now essentially the same as negatives (which begs the question, why? and why have neutrals at all?)

If you had 30/60/90 days to know this was coming, you could retrain your customer service reps, maybe augment them to start investigating neutrals as well.

Also, what I don't get is why TnS couldn't just rank the sellers by negatives and deal with the bottom 1% that way?

Why neutrals are not negatives
To illustrate the point, here is a sample of the recent neutral comments from a customer of ours, grapevinehill. I'm picking on them because I know they go 1000% out of their way to make every customer happy and they have a 100% feedback rating (only counting negatives).

• not as described, but still a good buy.
• shoes ran small and I had to return them
• pretty, but poor fit sizing, very wide and short, warning would be appreciated
• good stuff A++ however, company does not leave feedback for the ebayer
• Shoes didn't match-They refunded money & return shipping- I would buy from again
• Shipped wrong item.  Quickly refunded money in full.  Very apologetic.  Thanks!!
• fast shipper
• too big, must return

There's really only one on here that I would say is really something you could argue should be considered a "negative" (the first bullet).  If a buyer doesn't buy the right size, the seller offers a full refund, then should that be considered by eBay as a wholesale negative?

A wake up call for sellers
The morale of this story is that we are now alerting all of our customers that TnS is considering neutrals to be essentially negatives and you need to train/staff customer service reps accordingly or look at beefing up your customer service staff to handle the increase in 'cases' this policy change is going to create.

One useful tool for sellers to look at is the neutral/negative lister that lives here.

Example: Dolphin in the fishing net
It's pretty well known in the eBay community that one of the lowest feedback sellers out there is bargainland liquidations.  The Bargainland folks sell as-is returns and even though they clearly state everywhere that items are as-is they still receive a ton of negative feedback.  Their feedback tends to bob around the high 80's/low 90's so they are definitely (based on NEGATIVES) in the bottom 1% when you rank by negatives as they obviously have more than 5% negatives (less than 95% positive).

Bargainland's listings are way down, so there's a fair amount of speculation in the community that they are being limited/managed-out by eBay.  Also, Bargainland just launched their own auction site, which could be a move to get ready to leave eBay or just leverage it for customer acquisition.

The TnS action here appears to be justified.

Now look at a seller, inflatablemadness with a 97%+ positive rating (3% negatives).  To many that seems high, but this is a media seller and that category is very hard to stay in the 97/98 range.  They sell some used DVDs without cases that I guess they acquire from the likes of Netflix or Blockbuster's online DVD rental biz.  In the last 6 months this seller has received 72k positives, 1500 neutrals and 2200 negatives.  2200+1500 = 3700 which puts them at the 5% mark and thus I suspect they are in TnS's crosshairs.

While they are not a ChannelAdvisor customer, I know the folks at inflatablemadness and I'm sure if they had known that neutrals were going to be treated the same as negatives they would change some policies and manage things far above the 5% level they find themselves in.  If they are kicked/managed off of eBay, there goes 144k positive buying experiences/yr.

This smells like yet another dolphin caught in a Trust and Safety net.

Comments

[Timothy_Dwyer1]

So a new or low volume seller who sells only 20 items in 90 days and gets one negative or neutral may get restricted. This might be difficult for those just starting out - many sellers make some mistakes early on.

What has been nice so far is that ebay, while offering some incentive to larger sellers, did not discriminate against smaller sellers.

So maybe ebay has decided it has formed its club with enough large sellers that it does not need to allow many new ones to enter and grow. This and other similar policies will in time restrict ebay's own growth and open opportunities for competition.

While I am 100% in favor of ebay protecting it's buyers from those who have a dishonest track record, this policy (even without the neutral=negative) needs some adjustment. If they would revise the rating system to include BOTH the percentage and absolute number in the summary, buyers would be more informed and small sellers would get a chance.

[Randy T]

Multi-Titanium, it isn't relevant to compare ebay, as a business, with an ebay seller, as a business-in the context that I think, rouster is trying to discuss. Ebay is a service provider, and sellers on ebay are offering, for the most part, tangible goods, rather than services (unless, that is so stated in the ebay listings). The problem is the "truth in advertising" not being employed by some ebay sellers out there, physical inventory or not, that has resulted in the new ebay policy regarding feedback...

I think the issue rouster points out is that the high volume seller model seems to to result in thousands of unsatisfied ebay customers, and a negative image for ebay, more now so than ever, and that's why they are policing it more...it doesn't matter if the seller has a physical inventory or not. The issue isn't whether or not the seller uses drop-shipping or a "catalog" fulfillment system of their own. But as rouster points out, those seem to be the sellers who need to get it together in terms of customer service. It's a good thing if they have to start giving fair service in terms of refunds and communicating with their buyers. Don't offer and charge more for so called "expedited" shipping, only to ship the item by normal media mail or USPS first class....I could go on and on,
with that list of bad mega-seller behaviour....

I agree that the drop-shipping/catalog seller models will carry on at ebay, and I hope all the bigger sellers out there accept that customer service improvements are necessary now. Mr. Harmon seems to be doing a really great job with this situation, and I hope others learn from him before its to late for them....

[Jeff D.]

Multi Titanium,

You are in the minority on this issue. Customers should not get the runaround because a media dropshipper can't source the product in a reasonable time. Maybe you think that's an appropriate way to do business but it's not right.

BTW, how can you compare Ebay's business model to that of a dropshipper? Of course Ebay doesn't carry stock, they aren't the seller, they are the SERVICE in which sellers get the goods to the customer.

[Multi-Titanium]

I think that Rouster just said something stupid. The very model that you are deriding -- "information brokers" that do not carry inventory -- is basically the exact model that eBay is built on.

Let's be practical here. The reason why high volume dropsellers are selling on eBay is because it's working for them. They are making money (or so we think) and the customers choose to buy from them. I have yet to meet a casual eBay buyer who considers whether or not they think a seller uses a dropship system or carries physical stock in their decision making process. Buyers just want the right product at the right price, and want to see good feedback.

Is eBay cracking down on that model? No. Not at all. They are cracking down on non-performing sellers. As long as high volume dropsellers get their feedback up, they will be fine and they will continue to grow and expand on their inventorless business.

We dropship for more than one titanium level eBay seller and let me tell you, you would never even know they were using a dropshipper.

[CFernandes]

eBay is shooting themselves in the foot! We recently had an account limited with about 98.5% to 98.7% rating! Well most of our negatives are from buyers with feedback below 80% to 90%! How can awful buyers rate and "kick out of ebay" good sellers? Also, as you article points out, and my specific case shows, its totally arbitrary! But you know what, the money we saved on ebay fees (about $1500 in 30 days) we spent on Google Adwords. Result, we sold less, but made more profit (ebay is full of cheap buyers). Maybe we won´t even return to ebay ;-)

[Andre]

Hi Scott, first of all great site, good resource.

As an investor in eBay and a consumer of eBay goods I welcome the step. Consumers want good and reliable sellers. If the quality of the sellers gets better more consumers will shop on eBay.

Since the rules are the same for everyone it does not really matter how the ratings are calculated to define good sellers from bad sellers. If the measures are the same for all sellers it will hit the same percentage of crap sellers. I must say I like the Amazon rating. The consumer can rate without having to fear that the merchant will also rate him bad. This can happen with no reason.

5% negative or neutral feedback is huge. As a buyer on eBay who had to "almost" take one seller to court (his feedback was 99% - but he had loads of retracted feedback) I thank ebay for taking the initiative trying to sort out the rubbish sellers.

However I agree with Scott that out of the neutrals he received there were only 2 that deserved a neutral:

* not as described, but still a good buy.
* Shipped wrong item. Quickly refunded money in full. Very apologetic. Thanks!!

Why neutral? It is annoying if something goes wrong. If it is not fixed (ie refunded - sent again) it is worth a negative. The interesting thing here is that the rules are the same for everyone. I live with a professional EBAY seller and his stats are pretty impressive whilst I know he is NOT working perfect. 0 negative 12 neutral from 653 ratings.

Regards
André

[Alex Esguerra]

I totally agree that equating neutral as a negative feedback is not fair at all as a seller. As a bookseller ourselves, we have been hurt in this neutral feedback system in Amazon for example. There are a million of explanation to point out sometimes. It can be the problem was a in transit issue while shipping, buyera do not first bring the problem to the sellers attention first to fix or simply sometimes sad to say buyers just wants a freebie, discount or refund sometimes. It is so hard to maintain 98/100 feedback. Every seller we sincerely believe wants to stay in this range as mostly sellers wants to stand up to their company services and products.

In our company feedback rating benchmarks, customer satisfaction is a big deal. Our mission is based on this where we try to offer affordable competitive pricing but nevertheless maintain high quality. We believe in the principles of eithics, morality and karma at ADLE International. Having the lowest prices is one of the factors why buyers buy, there are a lot of other things and one of those are "feedbacks".

[Joe Imhof]

One wonders if its UNIQUE Neutrals/negs they use, because if one guy buys 7 things and doesnt like one thing, might give 7 neutrals.......?

[Red]

Hmmm, as a buyer I leave a neutral feedback if I have had to return the item and they were slow in refunding or slow with anything really (hideously slow) but it doesn't mean they are a crazy bad seller who wants to rip me off, just they are not organised or sprightly enough. I will have to re-consider the silent rules on leaving feedback that I have carved for the last 7 years, and make sure its yay or nay with no area in between.

[Jeff D.]

Oops, I meant AMEN Rouster. Sorry Randy, I agree with you most of the time but do you really think a seller who lives off of posting items they neither have nor may be able to source is worthy of giving multiple chances to?

[Jeff D.]

Amen Randy. We have been toiling on Ebay for quite some time under a few different selling IDs. I find it quite unfair that our media business is attacked by all these marketer/drop ship sellers who can sell much cheaper than I do because WE carry our stock, we ship it out and we pay taxes on it when it doesn't sell.

I could NEVER, EVER ignore a customer that is upset about something yet these people do all the time. I've bought from many of the media sellers on Ebay and Amazon and their service is atrocious. When you point out an item hasn't arrived you receive an indifferent email from an automated responder. When you do get a person, they treat you like the enemy.

I am so happy Ebay is tossing these people. My feedback on our main two stores is 100% on over 4,000 transactions. Lately, I've seen a surge in happy customers because the riff raff is being tossed. It gives me hope I can compete on a level playing field, offer the best deals possible and make a few bucks knowing that I made people happy. I got into this with that mission and no matter how big I get, the customer will be taken care of.

I will NOT sell items I do not have in my hand. PERIOD. I also do not understand why these same sellers charge $5.00+ to ship a CD or DVD. Sorry to those that employ this tactic but I understand the need for S&H, but to make up to $3.00 on handling is ridiculous. Is that a way to put me out of business by lowering your core price to a level that both you and me know is way below cost?

Ebay if you are reading this, BLESS YOU for leveling the playing field and getting the bad sellers OFF of Ebay.

[David Buckelew]

I disagree with the premise that sellers that sell 5000 items will get more negatives then sellers that sell only 200 or so do. A good sell is a good sell, a bad sell is a bad sell. If you have an unfair problem with a customer there are resources that you can turn to, such as Square Trade and eBay. How you deal with your problems also matters. There is no room for crooks (and there are plenty) on eBay. That hurts everyone!

[Trevor Ginn]

This is a particular problem for drop shops as they sell a lot of different items (more chance of a problem occuring) in large volume. The variety of items sold also caused problems with VeRO (the chances of there being a rotten apple in 1000 different designer items is high).

The problem with eBay is that they treat all sellers equally. They employ the three stikes and out rule ho matter how large you are. If you sell 10 items a month it is going to be much easier to stay within eBay rules than if you sell 1000

[Don]

I think this is the best thing eBay has done in a very long time. I'd just like to make two points:

1) eBay has not made a neutral into a negative. They're saying that a neutral is not a positive. They're not counting the negatives and neutrals together, they are counting the positives. Makes sense to me! It's misleading to talk in terms of "more than 5% negative feedbacks" - we should be saying "less than 95% positive feedbacks".

Similarly misleading is the feedback score as it is currently displayed by eBay. For example, a seller with 95% positives, 3% neutrals and 2% negatives is given a positive feedback score of 97.9% positive (if I have calculated correctly!). But they don't have 97.9% positive feedbacks, they have 95%.

2) Judging from Kevin Harmon's post above, this new policy is having the desired effect. Apparently sellers with less than 95% positives are waking up to their responsibilities (and I congratulate Kevin on the constructive steps he has taken). I have no doubt this is good for the marketplace.

[Robert Carlson]

This new policy will come back to bite eBay in the behind. Wait until all the sellers start filing negative feedback to buyer's filing neutral feedback. Watch how fast buyer's complete the MFW form and how quickly seller's get rid of the neutral feedback comments. I wonder how eBay will respond when buyer's are extremely PO'd that they got a negative from a seller when they left a neutral. Sellers will quickly clean the neutrals off their accounts because buyer's will 90% of the time agree to remove neutral in exchange for removing a negative from their own account. eBay has once again created a policy to police sellers that in the long run will cost them thousands of buyers. We just had one of our PS accounts restricted by this change in policy with a 98.9% FB rating but now that we understand how the score is calculated I've instructed our CS person to work with the neutral buyers for 3 days and if they're unreachable or not willing to work with us then don't hestitate to file the negative on their account to bring them back to the bargaining table. Wanna bet they change their minds when receiving a neg for a neutral? When the buyer argues that he was honest and left a neutral (for examples like Scott posted above); we'll respond and say that on eBay there is no longer a "neutral", they left a neg in eBay's eyes and that is the reason they're receiving a neg.

Funny we sell on Amazon and have a perfect rating but can't stay our of eBay's crosshairs.

I used to take eBay's insults to our accounts personally but after selling on here 7 years I just realized they don't have a clue about the retail business, customer service or good policy. Limiting sellers with 99% positive feedback, moving 1500 orders a month and offering a full refund for 30 days for any return is nothing short of stupid. We'll stay well under the 5% once we start negging all the neutral buyers that we used to ignore.

[Kevin Harmon]

Hey Rouster, I understand your points completely, but slightly disagree from my own experience. We actually use a hybrid model - we stock in our warehouse over 125,000 items, and we list "catalog" items as well.

What's interesting to me is that our "catalog" model has performed excellently over the years - it's our physical stock that has caused our challenges lately.

MoviemagicUSA is a wonderful freak of nature. Steve runs that ID like nothing I've ever seen on eBay, and he should have a framed picture up at eBay HQ as the model seller.

-Kevin

[Kevin Harmon]

Hey Scot, great post and I am glad that somebody has brought this out publicly.

Indeed, we are in the crosshairs right now - in fact it feels like we are fighting for our lives. We all know that eBay lives in its own ecosystem and makes its own rules - we large sellers just have to accept that. When eBay suddenly begins evaluating their sellers on brand new criteria - criteria which even defies eBays own current feedback policies as you describe above - well, it just makes it very challenging for us.

I recently volunteered to explain why we have recently strayed from our historical excellent feedback rating and what we are doing to stop it. In the interest of understanding, here's an excerpt from a document I wrote:

"Origins of the Decline:

Inflatable Madness has been selling on eBay for over 5 years and has achieved Top 25 status as a seller. Historically, our feedback rating has been very good – as high as 99.5% and averaging 99.0% for over 4 years.

In an effort to find more profitable items that could compensate for the fall of 2006 store fee hike, we decided to begin selling used product. We began buying used DVD’s and Video Games and selling them on eBay. We also started a disc repair center to repair scratched games and movies.

There were 2 challenges that developed because of this move:

1. Used product doesn’t always work. No matter how much time and effort we put
into inspecting, testing, and repairing discs, we will still average 5% defective.

2.We were not ready to handle the customer care that was needed by people receiving
a defective item – in short, we were not prepared to become a liquidation seller vs. a new sealed seller.

These issues combined together created feedback problems which we had never experienced before, which caused the rapid fall of our feedback beginning in December of 2006.

How We Are Correcting The Problem

I want to clearly state here that Inflatable Madness is 100% dedicated to improving our buyers experiences on eBay. There is absolutely nothing that is more important to me right now than to fix the problems we have been experiencing. Due to the low margin business we are in, even a minor limitation placed on our account would put us out of business, and so we have taken many different steps to improve our customer experience:

a. We hired another full time customer service representative in June. This representative both assists with answering email and processes returns. We are also able to refund faster than before.
b. We put a new returns process in place. In every package that we ship out that contains a used DVD, Video Game, or PC Game, we place a flyer which instructs the buyer to email a special dedicated email address if their item proves defective, and we answer that particular email immediately with instructions for return.
c. We began an aggressive Mutual Feedback Withdrawal campaign, which to date has removed almost 1,000 negatives. This confirms my personal belief that we were not responding to complaints quickly enough, and were receiving negatives because of it. However, we ALWAYS refund a buyer if there is a problem. So, a month after a neg was left, the buyer had been refunded and was then satisfied with the outcome, as the Mutual Feedback Process has proven.
d. We hired more shippers. The end result here is that we can ship an order almost 24 hours faster than before, and we can deal with any inventory stock out issue in a more timely fashion.
e. We completely rewrote our inventory software and completed a 100% recount of our entire inventory – no small feat for an 8,000 sq ft warehouse with 125,000 items in it. The end result is that our inventory control is nearly 100% now and we have stopped overselling items.

Results

I am pleased to say that our efforts are paying off. In June and July, we had the highest number of positives that we have had since Christmas and, even better, we have reduced our negative and neutral feedbacks by 50% over the previous 3 months. We still have work to do to get our feedback back to the excellent rating we have enjoyed for 80% of our time on eBay, but we are making strong progress and will continue to do our best to improve the buying experience"

Scot, we have expended tons of time, energy, and money fixing and improving our system to make us a significantly better eBay seller. I really believe that I have done everything in my power to correct this problem. All I can say now is that it would be absolutely tragic for me and my 16 employees to have all of this time and effort go to waste.

By the way, our 5 year lifetime feedback is: Positives - 297,769 Negatives - 4,921

Kevin Harmon
CEO
Inflatable Madness LLC

[Rouster]

It is interesting to note that there are a fair amount of ebay media sellers, like moviemagicusa, who do high volume sales, yet have incredibly high feedback (theirs is 100%). This is because for many sellers like moviemagicusa, it is a matter of simple ethics. If a buyer pays you for something, they should receive in the time your ebay ad implies. Emails from buyers should be answered, refunds should be given when necessary (and not just when the seller is forced to by a Paypal refund claim)...

Data marketers who pretend to have thousands of titles IN STOCK, who carry no real inventory, using the "fishing" model, only placing the order with a distributor AFTER someone has ordered it from them on ebay....are one of the biggest problem sellers on ebay. It is not possible to utilize the Amazon style model of fullfillment on ebay without ripping people off. I don't know how these sellers can quantify ripping off X amount of people "because it enables us to serve Y". Sure, they use expensive EDI technology and automated programs, but thousands of people's orders don't get filled in a reasonable time, and most of these big sellers have always been indifferent to complaints. Until lately, accepting that you are going to get hundreds of negative feedback remarks per month was a token part of the business plan, and thus, a part of HOW you run your business. Again, it comes back to ethics....

It simply comes down to this: ANY ebay seller, (not just a media seller), chooses how MUCH of their payroll labor to devote to customer service. Some high volume DVD sellers will tell you that its not possible to devote much time to things like simply answering customer emails, like "where is my DVD, I paid you 7 weeks ago"...these sellers will cry that their profit margins are now razor thin, and customer service HAS to suffer as a result.

Baloney. Profit margins for these volume sellers ARE razor thin, but it is still a choice these guys make. Personally, it would keep me up at night, if I accepted payment for lots of items I couldn't fill from the distributor---and then ignored the buyers requests for refunds.....

I ordered a DVD from a large ebay media seller. Turned out the DVD was out of print, the seller, (not inflatablemadness) refused to answer any of my emails, and I finally got a refund from a paypal claim-AND it
took 4 months, just to get a simple refund! Imagine how many other people there are out there who simply give up and don't get it together to file a claim....my point is that these large sellers are clearly accepting money for products they do not really have, and only give back refunds when they are absolutely forced to.....

It's true-some dolphins are going to get caught in the net with the new ebay policy regarding feedback....but we need to look beneath the surface with many of these large sellers.....a 3% negative feedback for anyone could equate to thousands of ripped off ebay buyers, forever turned off from buying online again, after a bad experience..

[Randy Smythe]

Great Post Scot! It looks like eBay would consider inflatablemadness or other "dolphins" as collateral damage to their T&S carpet bombing. Everything eBay dos is with such a broad brush that good people will be affected.

I would agree with you that Bargainland was targeted and appears to be restricted and maybe rightfully so. I hope that eBay will work with the dolphins to provide at least 90 days to deal with these new neutral/negative guidelines.