eBay Strategies

DSR FAQ - what if the buyer rates me on only a couple criteria vs. all 4? (Plus a bonus soapbox on our recent eBay workshop)

Earlier this week we hosted an eBay Workshop on DSRs and some best practices to help improve DSRS.  Thanks to the ChannelAdvisor's: ML, RK, CF, SJ, SH and RZ for your help!

One unanswered question was submitted that I wanted to make sure I followed-up on as I had to confirm with eBay.  The question was:

If a buyer is leaving me DSR feedback and of the four criteria they leave me say a 5, 5, 4 and then on the fourth criteria they do not rate me at ALL, does that count as a zero in my average or is it not tallied at all?

The answer is it is not tallied at all.  You can see this if you look at some larger seller's DSRs. For example, when I look at virtualexchanges today, I see that there is as large a delta as 70 stars left for each DSR.  Here's a snapshot taken this am:

Now back to the workshop - it was basically a complete mêlée with about 30 insanely VERY emotional and upset sellers attacking us from every angle even after we clearly stated we were there to talk about some best practices and have no ability to change the DSR system.

A good example is this Tim guy who runs the boycottebay site at myspace here.

There was some valid criticism of the DSR system such as:

• The wording that eBay uses for buyers needs some work, eBay makes it seem like 4 is excellent and a 5 is superhuman.
• eBay's encouraging free shipping and sellers will lose money on that potentially
• The $ spent to achieve a 4.8 to get the 15% isn't worth the 15%
• The tiers eBay has defined as poor/good/great are tough to achieve (4.8, etc.) and don't match up with the buyer ratings (this is by design, but I couldn't get that across to this audience).  I guess there's a bunch of people that have never been graded on the bell curve, but I'm painfully familiar with it from the good old days of being an engineering student.  The idea is to create a distribution curve so you can see how sellers rank against each other and then you can determine your bottom X%, top Y%, etc.

What I find interesting about this group of sellers is they seem to admit that S+H on eBay is a problem, and bad sellers in general are a problem, but they never offer another viable solution to the problem.  At least in the large seller groups like IMA and PESA there are some ideas of other solutions or ways to overhaul/tweak DSRs and make it more viable. Also large sellers are doing the math on their S+H weighed against the costs/benefits and looking at this as a business.

For example, I'm sure one solution eBay looked at is to charge a FVF on S+H in addition to the core price of a product.  eBay could lower overall FVF by 10% and then do this and it would immediately eliminate the incentive to make money on S+H which is the core problem we have.  This is how Amazon's fees work.  They take the 15% on the entire pie, not just the core.

If you think people are upset about DSRs, if eBay implemented a FVF on S+H, people would have lava coming out of their eyes as there are many challenges with that approach. I can hear them now:  "I sell furniture and the S+H is usually 40% of the item price and you just increased my fees 80000%!", "eBay has no right dipping its hand in another pocket", etc.

So in that context the DSR solution is definitely better IMHO than something much more complex and economically impactful than FVF on S+H.

Thus I'm left with this logic:

• DSRs at a macro level seem to be a moderate way to solve the bad/good/better seller problem on eBay.
• For the first time eBay has put some carrots into the system (search advantage and FVF discount) so that's a positive
• eBay doesn't seem interested in budging from DSRs
• Thus we are going to live in a world of DSRs for the foreseeable future and the best plan of attack is:
  • Give eBay feedback to try and improve the system
  • Evaluate changes to your eBay business to see if the carrots are worth it for you and make darn sure you avoid the sticks.

So to the crankypantsmartha 's  of the eBay world, you guys continue to befuddle me.  Why do you sell on eBay if you hate it so much?  Why would you expect buyers to rate a seller called crankypantsmartha highly on communication or customer satisfaction?  Heck you don't even have enough feeedback to have DSRs yet! What's really going on here? 

Fox Business video on eBay vs. Amazon

eBay Strategies friend, Kevin Harmon over at inflatablemadnessdvd.com (here's his eBay store and Amazon store) was interviewed yesterday on Fox business about the differences of eBay and Amazon.  I think he did a great job explaining this to people new to the concepts of listing fees, FVFs, etc.

Here's my attempt at embedding this video (feed readers will probably have to click through - sorry folks!)

eBay workshop today (2/26) on DSRs..

eBay invited us to host a Workship (kind of a long discussion thread on a specific topic) today at 4pm ET / 1pm PT.  If you want to swing by and join in, the more the merrier.  I've never done one of these before (and didn't even know they existed to be honest) so it should be interesting to see how it goes.  As with most things eBay, I suspect they can get somewhat heated so there maybe some drama.  Details are here.

Here's the blurb:

In early 2007, eBay introduced Feedback 2.0 and a key part of that was Detailed Seller Ratings (DSRs). In 2008, eBay has said sellers will be advantaged and disadvantaged based on their DSR ratings so they are becoming increasingly important. Please join Scot Wingo, CEO of ChannelAdvisor for an hour covering some DSR FAQs and proven ways to improve your DSRs.

Have you registered for CA Catalyst?

Every year in the Spring when retailers are recovered from the holidays and just starting to pull together their strategies for the next year, ChannelAdvisor hosts our Catalyst conference.  Initially we had two of these - one for large retailers and one for smaller retailers.  Three years ago we realized the content had become one and the same and thus merged the two conferences into one: ChannelAdvisor Catalyst. 

Today we announced the line up and I have to say that although last year really set the bar for us, we're going to blow attendees away this year.  Our goal is to educate retailers (customers and non-customers) on the fast changing world of multiple ecommerce channels and this year's line up is a who's who of internet behemoths. I've been saying that 2008 will be the 'year of the merchant' and this year's Catalyst line up proves it.  Highlights include (alphabetical by company name):

• Amazon - Sebastian Gunningham, SVP Merchant Services will be talking about the various third-party options that Amazon is offering including of course Merchants@, but also fulfillment by Amazon (FBA) and ProductAds.  Sebastian is essentially the CEO of Amazon's third party business so this is going to be something not to be missed if Amazon is at all part of your strategy or something you want to learn more about.
• eBay - We have Stephanie Tilenius, GM of eBay NA, John Mracek from  Shopping.com and finally Mary Anne Gillespie, VP of Paypal coming to talk about all the changes and opportunities within the eBay marketplaces+payments family.
• Facebook - (yes facebook!) Ben Ling who runs Facebook's platform team will be here to talk about the opportunities there for merchants.
• Google - Vince Monical, Director of commerce and analytics will be talking about Google's long-tail strategy.
• Nike - One of the World's largest brands, Nike, will be covered by Chris Shimojima, VP of global ecommerce.  Chris will be talking about how the Nike brand is evolving and how they leverage it in the world of ecommerce.

This is just the tip of the iceberg, we have many many other opportunities for retailers to meet up and coming channel partners and of course a large chunk of the ChannelAdvisor staff will be available to answer any questions about multi-channel strategies, our software, etc.  One of our most popular panels - a view from Wall St. will be back and of course we'll have some surprises...

The event is held at beautiful Pinehurst, NC on April 1-3. If you are interested you can register here.   We're trending (and expecting) about double the attendence of last year and have limited capacity so there's a good chance we'll have to cut off registrations so don't delay.  I really look forward to seeing everyone there!!

Follow up from open questions raised on webinar...

During our 'eBay changes' webinar three interesting questions came up that had Max and I stumped.  Since the webinar we've gotten answers from eBay.

Question1: Once eBay starts counting repeat buyers in feedback, will this also count in DSRs?

Answer: Yes.  Just like feedback, where you can get a maximum of 1 entry per week per buyer, repeat buyers (max 1 per week) can now impact your DSRs.

If the buyer leaves multiple DSRs during the week long period, what eBay will do is average them and record the average for that buyer.

Example:

• week 1 - buyer buys 3 items, leaves avg 4.8 on S+H cost DSR
• week 2 - buyer buys 1 item, leaves 5.0
• week 3 - buyer buys 2 item, leaves average 4.9

This example would count in your DSR rating as one 4.8 then one 5.0 and then one 4.9?

**I view this as an unexpected positive.  I assumed (incorrectly) that repeats wouldn't count against DSRs.  Now that eBay has confirmed they do, my guess is repeat buyers should rate you higher than new buyers (because they are coming back they must be happy right?) and if you have a high repeat buyer rate like many eBay sellers do, you should enjoy a lift in your DSRs from this.

Question 2: What happens to Mutual Feedback Withdrawal (MFW) once sellers can't leave a negative for buyers?

eBay pointed out this page which states that:

The current Mutual Feedback Withdrawal system will remain in place until the second half of 2008. The Feedback system will continue to evolve as community makeup and the online marketplace dynamics evolve.

eBay has confirmed that the MFW will be end-of-lifed an appropriate time after the 'no negs' policy goes into effect.

Question 3: This is kind of a two-parter, but both parts involve cross border trade (CBT). 

3A: If I'm a seller in the UK that qualifies for the 40% FVF off, and sell an item to a US buyer.  Do I get the UK discount on that item or the US discount?

3B: Assume it is post March and BestMatch is live in the UK and the USA.  I'm an UK seller and list my item such that it shows up on the USA site.  When viewed by a USA buyer, will my UK-listed item have the US bestmatch algorithm applied or the UK (assuming they are different)?

Answer 3A: the fee discount follows the seller.  In the 3A example, the seller would get the UK discounts even if purchased by a USA buyer.

Answer 3B: A UK site showing on the US site will have the US BestMatch algo applied.  Your DSRs are global and will be applied globally.  However, some sites may choose to have different weights for the 'seller performance factors' that could impact your item differently  For example, currently the UK is testing a disadvantage for sellers with a s+H DSR <=4.2, whcih the US is not doing.

Special thanks to the folks at eBay for taking time out of their schedules to answer these questions.

eBay Changes Strategies: DSR Best Practices

In preparation for our webinar earlier today, we spent a great deal of time at ChannelAdvisor analyzing our data on the top 4000 eBay sellers (by GMV NOT feedback).  We ran all the sellers through our free DSRWatch utility and sorted the data.  As you would imagine the 'shipping and handling charges' DSR is the lowest (avg 3.9) for the top sellers.

However, based on this data, we did find 400 sellers that had all DSRs > 4.8 and we further sorted that based on volumes to come up with a set of around 150 'top tier DSR' high-volume, high GMV eBay sellers.  We then looked for commonalities.  What makes these 150 elite sellers able to get their S+H charges DSR above 4.8?

We discovered 10 best practices that we went into detail on in the webinar, but we believe are important enough that we want to make sure the word gets out.  Here are the top 10 (plus a bonus) best practices:

1. Specify reasonable flat-rate shipping
2. Highlight your shipping, return and other important policies ‘above the fold’
3. Provide 2-3 shipping options CLEARLY spelled out
4. Call out international shipping information –set expectations around time and customs, and other international ‘gotchas’.
5. Provide a clear and easy to understand return policy
6. Provide (and communicate) discounted combined shipping
7. Keep it simple
8. Ship to US only? (consider splitting into two seller IDs)
9. Amp up your customer service
10. Consider free shipping as an option
11. Communicate, communicate, communicate - suggest 5 stars in listing, WBN, shipping notification, feedback,etc.

Every one of the 150 elite DSR sellers utilizes a combination of these best practices to achieve their > 4.8 status.  The good news is based on the data, we think these levels are achievable for any seller that is able to embrace the best practices and work them into their business model.

If you're interested in more details and specifics behind the 10 DSR best practices, check out the recording of the webinar by following these instructions:

1. Go to http://www.channeladvisor.com/webinars
2. Click on the Recorded Webinars section
3. It is the first recorded webinar on the page.

If you have encountered any other best practices you would like to share, feel free to post in comments and we'll summarize.

Reminder - eBay Changes webinar today@2pm ET

A quick reminder that we're having a free webinar today detailing eBay's upcoming changes, debunking some myths about the changes and most importantly detailing some strategies for how to take advantage of the changes.  While many sellers face the changes with emotion, boycotts and store closings, I think this gives serious, business-oriented sellers an opportunity to get an edge that could sustain through the rest of the year.  Changes are coming and there's nothing anyone can do to stop them, so why not look at taking advantage of them?

Think of a surfer and a wave.  You can sit there and worry about that wave and probably miss it, or you can start paddling, catch the wave and ride it on into shore.

We've spent a good bit of time thanks to our   utility, reviewing the detailed seller ratings for the top 4000 eBay sellers and have not only some interesting data to report, but we've also evaluated all of the high-volume sellers with ALL DSRs > 4.8 for some best practices that we will be covering on the webinar.

Early valentine from eBay - .20 listing day 2/13! (Wednesday)

eBay's new General Manager for NA, Stephanie Tilenius, made her first appearance on the AB boards with a .20 listing day for tomorrow.  Details are here. 

Stephanie replaces Philip Justus who is over at PayPal.  We actually worked with Stephanie a good bit when she was at Paypal and she's definitely a GSD (Get Stuff Done - that's the G-rated version) kind of person so it will be interesting to see what kind of changes she'll bring to eBay

More evidence that eBay is listening (and acting)...

When eBay announced the new fees just about two weeks ago, media sellers saw a pretty significant increase due to the increase in FVF and a smaller decrease in the listing fee.

Today, Lorrie Norrington, eBay's President of Global Marketplace Operations, new President  announced that eBay is going to do a carve out for the media category and address the concerns they had.

Media is a very important category to the health of the marketplace for several reasons:

1. The long tail - One of the keys to selling online is selection.  The more you have to offer, the more likely your browsers are to convert into active buyers.
2. At a < $20 price point, media makes a great first/safe purchase for new buyers.  eBay will never be the site where you go for the latest release, but it's great for 6 month old+ releases or to round out a collection.

It's great to see the new team really start digging in and proving to the community they are not only listening, but making changes too.

Seller reaction has been very positive.  Kevin Harmon at Inflatablemadness (he was on our TWP Wall St. call) had this to say about the changes.

eBay changes free ChannelAdvisor webinar next week 2/13@2pm EST

There is a HUGE amount of misinformation (example here) about the changes coming to eBay.  So we're hosting a webinar next week to first provide real details on the changes and then we've also done a detailed analysis for how eBay sellers can use this period of change to their advantage. We'll be covering some independent analysis we've done on DSRs, best practices for improving your DSRs, details of Finding 2.0/BestMatch, and much more. Finally, for our customers we'll discuss changes coming to our software to help sellers take advantage of the changes.

You can sign up here.