2 new strategies to improve your DSRs

I'm cautiously posting this because every time I mention DSRs, I'm flooded with a river of anger in comments, but for those sellers that do want to improve your DSRs, I wanted to add two new strategies to our 12 tips for increasing your DSRS (now 14).

At ChannelAdvisor we spend a LOT of time working with sellers and helping them improve their DSRs and these two strategies come from those discussions, tests and results.

Here they are:

Improve your DSRs Tip 13 - Consider selling some DSR-friendly goods (or loss leaders)

One group of sellers we've had a hard time getting improvements to their S+H cost DSR are those sellers that sell heavy items (laptops, furniture, anvils, vacuum cleaners, etc.).  We had a caller on the webinar that was the embodiment of this challenge.  The caller is a computer seller (avg 10lbs - $30 S+H cost) and was shipping US only as we have advised and had taken into consideration all 12 ChannelAdvisor DSR tips, yet couldn't get the dreaded S+H DSR over a 4.5 (30-day).

One thing we've seen work is for people to start mixing in items that are almost guaranteed to have good S+H DSRs.  In this example, I'd say computer accessories would be good.  By mixing in some < 1lb items like mice, usb drives, keyboards or whatever - maybe even with free shipping on those items, the seller could start throwing some 5 stars into that S+H DSR to balance out the 1/2/3's they must be getting.  In some business models, it may make sense to lose $1-5 on these kinds of items to get your 'core' business into the golden 4.6/4.8 DSR range and achieve those FVF discounts and BM advantaging.  Imagine you sold 100 computers a month (ASP of $500). If you sold 200 items you lost $1-2 on ($400 cost let's say), but had great DSRs to get the 15%.

Cost of our "DSR juice" program: $400/m
FVF fees you pay:

• 100*$500 =$50k GMV
• Assume 10% take rate - FVFs are usually about 60% of that so 6% FVF, yields a FVF cost of $3k
• 15% fvf discount: $450

Here you're ahead of the game (in this example) $50 on the discount ALONE. If you could get your conversion rate up 1-2-3% from BM advantaging that would be well worth it IMO.  I'd argue that you could run a program like this up to double the FVF credit and the program (boosted by BM advantage) would be huge.

Improve your DSRs Tip 14 - Consider NOT filing for UPI credits
I have to thank eBay Strategies friend AC for turning me on to this one.
This one is probably going to be controversial, but before you flip out, follow this logic.

Here's how it works from a buyer's perspective:

• You said you'd buy something and didn't.
• 7-10 days later the seller files a UPI claim against you
• After that week, you get a UPI strike - the messaging around UPIs in the eBay help system and on the site are pretty nasty sounding. I'd argue it's as bad/worse than getting a negative feedback.
• So what's your natural reaction - are you going to give that seller 5 stars?  Heck no, you are going to neg them and you are going to give them all 1's - take that you UPI-filing meanie-head!
• If you were a real smart buyer what you would do is leave a positive and then all 1's -that's going to really hurt the seller because they can't get the neg expunged - the pos+1's is the most damaging feedback potentially to a seller in the UPI process.
• eBay's help system tells you to go into the console and start doing stuff, if you do that then your feedback will stick and you will be able to dodge the UPI on your account.  Really a win-win for the buyer and well worth your time when you consider the downside (from eBay help docs):

Note: If a buyer gets too many strikes in too short a time period, their account will be suspended indefinitely. In some cases, limits may be placed on the buyer’s account in advance of suspension.

So as a seller if your DSRs are really important to you, then why risk them by starting this dance at all?  Sure it's eBay's fault the UPI process is so broken and all, but you do have the option to opt-out of it.  Sure, this puts more FVF $$ in eBay's pocket, but maybe you can take more out by opting-out and do what's right for YOUR business.

Here's an example of how this could pay off.

You sell 1000 items a month.  10% UPI rate (100 UPIs/month).  Let's assume 25% of those people 'burn' you on DSRs in there - so that's 25 '1 stars' you are getting from UPIs.  eBay doesn't publish or provide any transparency on DSR data, but let's assume a distribution like this for your 1000 transactions: (yes i know that only 75% leave DSRs, but let's say it's 100% for argument's sake):

5 - 745
4 - 200
3- 20
2 - 10
1 -  25

This yields:
3725 - 5 stars total
800 - 4 stars total
60 - 3 stars total
20 - 2 stars total
25 - 1 stars total
4630 total stars/1000 transactions = 4.63 DSR

Now you stop filing UPIs.  Here i've assumed a very generous UPI star distribution and taken most out of 4's, but some out of 3/2/1's: (now we have 900 transactions)

5 - 745
4 - 149
3 - 2
2 - 2
1 - 2

This yields:
3725 - 5 stars total
596 - 4 stars total
6 - 3 stars total
4 - 2 stars total
2 - 1 stars total
4333 total stars / 900 transactions = 4.81 DSR (the heaven's part and a beam of sun shines down on your head as you my friend are now on some DSR hallowed ground!)

Now you're saying, "Hmmm, ok he may have a point here, but what's the cost?!"

Let's stick with our example.  Let's assume this seller has a $50 ASP:

Situation1: seller files UPIs and gets a 4.6 DSR.
$50*1000 items = $50k and of course $10k of that never ships.  so the seller files for UPI FVF credits on that $10k.  Let's assume this seller has a 10% take rate, 4% is listing fee and 6% is FVF - so they get 6% back (yes this assumes a 100% success rate on UPIs which isn't the case, but stick with me) - so they get back $600/m in FVF credits.

This seller is at 4.6 DSR so they enjoy the fvf 5% discount.

 

Situation2: seller does NOT file UPIs and gets a 4.8 DSR.
In this scenario the seller does not get $600 in FVF credits.  However, they do get a 10% increase in cash back because they are now in the 15% 4.8 tier. Perversely that FVF credit is on a larger amount thanks to not filing UPIs so it is really a 11-12% difference, but let's stay with 10%.

10% benefit - (seller has $6k FVF) - $600 cash back.

So in this case (it's the 10% UPI rate that is doing this BTW), the seller is net neutral from a FVF cash perspective (e.g. instead of the $600 in UPI credits, they got an additional $600 from the discount).

BUT, and it's a big BUT.  They are now hyper advantaged in BestMatch and let's face it, you sleep better with a 4.8 vs. a 4.6.  A 4.6 is just 20 1-stars away from a 4.5 which is the path to being suspended for SNP.

This strategy will vary:

• If you have a > 10% UPI rate, it could be more expense vs. breakeven.  If you have a < 10% then it could be very profitable.
• If your UPI 'fee recovery success rate' is very low, then that will improve the profitability of this strategy.
• If you do this and your DSRs don't move, you are hosed (I think this is highly unlikely BTW)
• If you have an unusually high ebay FVF take rate (higher ASPs), do the math for your model. 
• If you have a low ASP, this could really help you
• If you have a low conversion rate (meaning more of your fees are in listing and not FVF), then the BM part of this will be killer positive for you.

I'd love to see some brave readers try this for 30 days and see what they experience.  I'm going to go out on a limb and say that if you did this plus our other 12, you could be looking at a 4.9 - definitely if you don't ship outside continental USA.

A word of caution...
Recently we're finding that TnS has an ever-expanding definition of 'Feedback manipulation' and some more creative/aggressive strategies are causing suspensions, so be careful how far you take these.  I can't possibly see adding some new products that your assortment could possibly be a violation, but be careful out there.  The one thing we have seen is suspensions for what I call DSR farming, which has two flavors:

1. Creating accounts to get fresh DSRs - the seller creates a new ID every 30/60 days, or once the previous ID is 'tainted' (under 4.5 DSRs).
2. Moving products around seller IDs - we had one customer suspended for life for taking some free shipping goods and moving them between 2-3 seller IDs to 'reform' the DSRs on those seller IDs.

Recap of the 14 tips

1. Specify reasonable flat-rate shipping - the eBay shipping calculator is broken, do not use it, do not use zone based shipping (although best for the consumer, it is very broken on eBay)
2. Highlight your shipping, return and other important policies ‘above the fold’
3. Provide 2-3 shipping options CLEARLY spelled out (buyers like expedited shipping)
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 (if your shipping+handling section is over 10 lines, that's too much)
8. Ship to US only? (or consider a dirty seller ID that is intl only)
9. Amp up your customer service
10. Consider free shipping as an option (doesn't have to be all products)
11. Communicate, communicate, communicate - always mention 5 stars EVERYWHERE, do a package insert too.  Send buyers to 'www.leavingfeedback.com' to help them understand how this works and the impact on you the seller.
12. Leave feedback first (use the words '5 stars' in there)
13. Add DSR-friendly products to your mix, especially if your core business involves heavier/bulkier items.
14. Consider not filing UPIs - depending on your CR, TR and ASP, this could be a big win for you.

Comments

[Dave]

I seriously considered following tip 14, but then I did some research and I don't think the savings Scot talks about is there for us.

For example, I checked our unpaid item disputes and of the last 56 that were never settled, only one person left feedback. He left it moments after he paid, and it was positive. I think most UPIs do not leave feedback because so many of them are newbies who not only can't figure out how to pay but they have no idea how to leave feedback. (The real probably with UPIs is that eBay is too difficult for a newbie to use.) A buyer who knows they can leave ones as punishment is probably far more sophisticated than most of the buyers we run into.

Of the 21 disputes that were resolved positively, 10 people left feedback, 8 glowingly positive, 1 moderately positive, and 1 left a neutral. So the idea that 25% of people who receive UPIs are burning us is clearly false. And far fewer than 10% of our sals are UPIs. That's where Scot's assumptions breakdown.

So with this data, the questions are:

- If unpaid item disputes serve as a reminder and cause 27 percent of non-paying customers to pay, is it worth stopping them? Remember, we are not only losing fees, but sales.

- Are those 21 sales and 56 fee refunds more valuable than potentially getting back 10% on my final value fees?

- Also, if our 30 day DSRs are 4.89, 4.87, 4.81 and 4.68 with 25% of our sales international, (and we're practicing 7 of the 12 tips) how much are we really losing as a result of filing unpaid item disputes? I think customs fees are probably a bigger issue -- they certainly result in more negatives and neutrals than our UPIs.

- So where does it stop? According to this logic of doing nothing to piss off your customers, we should stop sending annoying payment requests and probably stop sending requests for feedback. That makes more sense to me.

My advice is to graciously perform a mutual UPI using "The customer changed his mind" when a customer contacts you after making a mistake (I purchased the wrong size, my son stole my password, and the ever popular I got laid off/someone died after I bought this and now I can't afford it). In my experience, most sophisticated eBayers contact sellers to request a release from the sale; it is the inexperienced who buy something, don't pay, and you never hear from them again.

[Justin]

It truely is unfortunate, but #14 is 100% correct.

E-bay made a real mistake when it started letting feedback restructure the pricing for sellers.

Well.... I take that back, good sellers should be rewarded with a lower selling cost. Everyone on here I'm sure knows that the fees can be the most costly part of online selling (maybe the most costly part of all).

But their mistake was giving the buyer too much power with no consequences.

IMHO IF the buyer did not find communication with the seller to be fantastic then don't leave 5 stars. If the item was not as described then again don't leave 5 stars. Other buyers will see this and the seller's listing will suffer because of it. Which is just business.

But if the price of the shipping was too high in your opinion, then why buy the item? The shipping method is usually shown in the auction itself. It you do not agree to the shipping cost or you think it is a bit high don't buy. Shipping time should have no bearing on this field as it has one of it's own on the DSR.

I think this DSR is almost as obsured as if they had one that said "item price".

In all honesty, I know that the people on here that said you should stop unpaid bidders by filling are correct. But from a financial stand point of a seller Scott is right.

The difference between a 5% and 15 % discount is what? Maybe a 10th of a percent with regards to feedback? Or a fifth? It is very difficult to keep a high percentage anyway when you consider you have to be with the top 1 percentile of your feedback to recieve a discount? My numbers may not be exact but they are close. And when a few feedback can sway my discount from a 0% to 5%, or 5% to 15%, that is a substantial number when your fees start going into the thousands.

So, morally is it a good idea to file UPI strikes against bidders? Yes it does the community good. Many people have started to get really bad about not paying or changing their mind with no regards to the fact the seller still has to pay the fees if they don't buy. Some kind of action should be taken against this.

BUT when my profits are on the line, I don't know if that warm feeling in my heart that I am doing the right thing by reprting no paying bidders and keeping the community going, is really going to ease the strain that it cost me an additional $400.00 this month.

E-bay sellers shouldn't be put in the position that a moral obligation to the community should have any impact on their selling status and the fees that they pay.

I would think that with all the brilliant minds that E-bay must have to keep such an enterprise running that someone should have seen this as being a huge problem.

Imagine if the police department said report crimes because it is the right thing to do, but oh by the way if you do we are going to chagre you $100.00.

Maybe that is a bit extreme but it truely does parallel this situation.

Thanks Scott, we have actually been using this method for the past couple of months. Unfortunately... It works great. I hope E-bay changes soon.

[JW]

You can DSR and DBR and wave your stars around till you're blue in the face and it wont tell the story of user/member history.
Talking about the present feedback system is an infantile and ridiculous endeavor.
What is needed is a truly revealing and trustworthy information source about your trading partner.
What is needed is selectable bidder and seller performance levels. Otherwise the valuable stuff stays in the attic.
The big stuff goes to Craigsl.
High end stuff goes to brick and mortar.
Members stay away of disinterest and fear.
EBAY needs the TRS ver 9 Transaction Rating System "Trust Score" system.
Either they adopt it or they continue to languish in this mire of anger and caution.
Reputation is your best business partner.
I will continue to post around the internet as necessary.
I am not a web designer. I am a mechanic.
I fix things that are broken.

[Jim]

I am convinced that eBay does NOT care to help you improve your DSR. Why would they - it cost them. If they help you get your DSR high they loose profits in discounts.

Here is a coupon story for you.. I am selling a $12.00 item with Free Shipping. The buyer emails me and says he has a coupon for free shipping up to $10. He wants me to send him an invoice for the item with it modified to show item $2 shipping $10 so he can get the item for $2. I refused. I hope eBay backs me on this as I would think it would be a violation of policy to charge for free shipping let alone forcing me to be unreasonable on shipping cost.

Let's push eBay for all 5 stars on S&H if S&H is free!

[BMX]

Scot,

I hope you will respect my opinion but I really disagree with your latest tips.

Although I've had to resort to selling items at a loss because they are 'dsr friendly' is this really good for my business? Does ebay EVER sell anything at a loss? Coupons you say? Don't you think the loss of buyers stems from the ridiculous amount of fraud that has been present here over the past 2-3 years which has eroded the public perception of ebay?

From what I hear the coupons are a joke. Sellers are getting extorted because paypal is telling buyers who can't use the coupon to ask for a refund... ??? Instead of certifying different 3rd party check out solutions and having regular intervals in which the certification is renewed, ebay cancels 3rd party checkout all together... Isn't this going to hur

Ebay needs to step up to the plate and take care of this UPI mess. It is THEIR responsibility to get us good buyers. We are repsonsible for putting the items up and filling our part of the bargain, ebay takes hefty commisisons and should screen the buyers a little better. I shouldn't be scared because some idiot kid bids on some items and the parents don't want to pay for it.

I find ebay's behavior on this area a true representation about how they feel about sellers in general.

Perhaps Steve Jobs should take over as ebay CEO. The culture of arrogance is definately already in place.

[cheZ]

Scott - not a follower of your blog , was alerted to it on the Seller Central board on eBay as someone had made mention of it in regards to your " tip " for not filing a UPI to boost one's DSR's. I was so sure that I must have been misunderstanding or possibly misread something that I had to come here to actually see for myself. For you to even suggest this " tip " considering eBay's draconian policies against all sellers ( except Buy.com ) , not to mention the financial hardship resulting from following this kind of " advice " to the average seller , makes me not only immediately lose any and all respect I might have had for any your " advice " or opinions , but also makes me truly wonder about the extent of ineptitude by so many of the so-called " experts " like yourself who are currently watching this latest eBay debacle unfold , but who are really not seeing or perceiving anything.

[Betsy]

I find it very difficult to believe Ebay is suspending any buyers who have multiple UPI's. Sellers are supposed to believe action is taken?

I had a customer leave 8 neutrals for various sellers in one day because THEY did not pay for the item or it was 'cheap'.

She contacted me because the item was 'broken' and did not want to return the broken for a free new one, so I'm next.

I contacted Ebay to ask why such behavior is allowed, no response. Again, I ask, how are sellers to believe ANY action is taken against ANY buyer?

[Frank]

Here is another sure fire way to keep 4.8% on your DSRs: be Buy.com and ebay won't ever, ever, ever
let your 2 shipping/handling DSRS fall below that, (no matter what the buyers leave you).

C'mon, they do volume sales and their inventory is virtual. Nuff' said.

No veteran ebay sellers believe that ebay isn't tweaking their DSRs. Ebay will forever deny it but we know better. I've test ordered from their ebay store 3 times now. Guess what, zero fill for 3 seperate orders (for movies that are NOT out of print)...

[Jayne]

While I am impressed with your analysis and advice on this topic I am simply amazed that a reputable seller, who ships within 24 hours and ships a good product for a fair shipping price has to play this game. A DSR system based on the whims, moods and imagined slights of a buyer is a joke.

Moreover, you are encouraging sellers to just dismiss a non-payer with no retribution so they are able to continue wasting sellers' time and costing them money in relisting fees. The shady buyers must love you for this.

Your business is based on large volume sellers so you must be thrilled with the direction eBay is headed. I have been a reader of your blog for sometime and it is clear to me that when frustrated smaller sellers do a little venting you recoil and you don't seem to like it when someone disagrees with you.

I hope that you have that projectile vomiting under control. Jayne

[DarynO'Shea]

Scot - Interesting solution on the UPIs. That solution very much favors ebay and leaves them with a profit at the end of the day and poor buyers that aren't being reported and won't ever get booted. There may be situations where a seller has changed their policies at the last minute and required payment via a method that leaves the buyer unprotected, which has been ebay's stance in allowing UPI buyers to leave feedback, be it negative or positive. However, we're very much against allowing a UPI buyer to leave feedback for a transaction that they didn't complete, and we certainly don't think it is fair for them to judge us on the four DSR criteria when they haven't paid for the item and will never be able to confirm if it was as described and well packaged and how our communication was. I guess they could have an opinion about the shipping cost, but even that wouldn't be fair until they see how the product was shipped. If they paid $9.99 for shipping and it arrives First Class Mail at a maximum cost of $3.89, then a low DSR for shipping would be fair. They won't be able to determine that though until the package is actually in their hands.

During ebay live, I suggested that it would be nice for sellers to at least see a Payment index for buyers (since we can't leave negative feedback), which would basically be the ratio of unpaid auctions to all auctions bid on. If the index was high and we were having problems collecting payment, then we at least know what we're dealing with. If the ratio is extremely low and we're experiencing a problem, then we should be more patient and try to work with the buyer as they obviously have had a good track record. Similarly, there could be some type of indicator for buyers showing the trustworthiness of the payment information being provided by a seller. In situations where they supposedly accept Paypal and then demand a money order instead, this would provide visibility to the ebay community and probably be effective in getting the rotten apple kicked off ebay quickly.

[BILLSTUFF]

Hello Scot. I value your opinion more than any other eBay blogger out there. I say that, realizing that in almost all cases you really aren’t even speaking to sellers like me – the original, classic sellers who hawk one-of-a-kind collectibles. I have pretty much accepted that your main target is sellers who basically sell lots of the same, new items. It’s pretty obvious your tip #14 doesn’t even consider sellers like me. 99% of my stock is unique items. If I don’t file a UPI, it means I have to wait something like 60 days before I can safely relist the item. One of the values of the UPI is that it releases sellers like me from being at the mercy of a buyer who thinks nothing of taking 4-6 weeks to pay for an item. Where am I at if I decide not to file a UPI and arbitrarily relist the item after a couple of weeks, and then out of the blue a payment arrives for the item I’ve just relisted?

I can understand the reasoning behind your recommendation not to file a UPI. However, as much as I respect you, I can’t help but wish that someone with your knowledge and influence would be taking a different approach. I would be much more impressed if you were attempting to rally sellers into doing the “right thing” and getting rid of these non-paying deadbeats by filing UPIs when appropriate. Instead, we’re now faced with a potentially new breed of dangerous eBay buyer who not only knows sellers can’t leave them negative feedback, but are now being encouraged by the High Priest of eBay Bloggers not to file a UPI.

Already I’ve noticed a significant increase in the number of buyers who are not only trying, but succeeding, in extorting partial and full refunds in situations they would never have considered or attempted only a few weeks ago. Hardly a day goes by I don’t have a buyer trying to pull something, and it’s only going to get worse if we all go our separate ways and treat it merely as a cost of doing business. The problem is, that cost is increasing daily.

[AC]

Scot,

Glad you thought my tip was worth sharing with others.

To Mark and Eddie,

Your situations are similar. Your conclusion is correct, provided the buyer doesn't reply in the UPI process. The trouble is...you have to begin the UPI process, and wait several days to close it out. While this is fine for the no-reply UPI's...what about the other folks who had forgotten about the transaction? In order to gain the benefit of UPI credit on the no-replies, you have to open yourself up to the risk of replies, resulting in no feedback removal. Sure, eBay says they will work to remove feedback in the case of nonsense replies, etc,...but do you really want eBay applying their interpretation of their own vague policy in a matter that can ultimately increase the fees you pay eBay or the search standing your items receive? Unfortunately, the best bet may be to not file UPI, and hope that those who forgot the transaction also forget that they can leave feedback.

[JD Bilodeau]

Scot:
Thanks for the webinar yesterday. Are you seeing any pushback from buyers on the leavingfeedback.com inserts? As a very small seller (silver powerseller) I'm already getting an ulcer watching my 30 day scores bounce around. Because of the relatively low number of feedback ratings we get each month (only 20-30) it seems like the rating changes with each and every feedback comment. While I'm willing to beg to raise my DSR's, I'm just nervous about that one buyer who will see the insert, think we're trying to game the system and leave a 1 or a 2 out of spite.
-JD

[ndog]

Like number 13 and I had just started trying out something similar. Might take a more aggressive approach given your points and move it to free shipping, rolling the cost into the item.

[Will Huynh]

Tip # 14 sounds like that would help out a lot. We'll keep u posted.

Thanks Scot.

[Ken Dooley]

Scott

As always, some terrific ideas and suggestions there. I hope eBay appreciate the work you and your team are doing to assist their customers.

Regards

Ken

[Mark Freeman]

Scot:

I have a variation on #14 for your consideration. What if you file UPI's, but only close the ones without replies from the buyer? My understanding is that if they don't respond, they can't leave FB or it will be removed (not sure which is correct). I've been closing the ones without replies as soon as they are eligible to be closed. What say you?

[Eddie]

Though the UPI dispute is 'messy' if done correctly, and either the buyer does not respond or responds in a manner that does not apportion blame to the seller, then a -ve feedback if left is removed, along with the corresponding DSR scores, thats how I understand the process ?

So Scot, your maths are valid, but surely having the feedback/DSR score removed entirely is going to maintain/improve DSR scores rather than letting UPI's ride ?

Now, what would be good if the API allowed for mutliple UPI's to be submitted by sellers, that would be real progress ;-)