Son Of A Titanic Is eBay’s Defect Rate Rating Going To Be A Disaster

Hi gang,

Well, it’s almost here.  August marks the line in the sand where eBay begins judging sellers on a brand new, er, brand new to eBay metric.  It’s called the Order Defect Rate, or ODR, and man-oh-day do I think it’s going to be a disaster for a lot of sellers.

Let’s start out with a battle-tested philosophy of mine concerning eBay.  This is coming from a dude who has sold over $15 million on Amazon and eBay over the years.

Number 1 –  The level of seller disruption increases exponentially based on eBay’s competency level.

What do I mean?  Well, let’s take Feedback for example.  For those of you who don’t know, eBay doesn’t buy or sell anything – eBay exists to facilitate transactions between individual buyers and sellers on their platform. Also, somehow, eBay considers the transactions themselves to be eBay property, which means the person who bought from you is eBay’s customer, not yours.  You can’t brand yourself in any meaningful way and you aren’t allowed to communicate with buyers off of the eBay platform.  Anywhoo, that’s another discussion.

eBay should be, and pretty much is, competent at designing Feedback policy, and so for their original Feedback system, there was minimal seller disruption. UNTIL they rolled out the new 5 star rating systems.  Why? Please see above – eBay does not buy or sell anything.  So when eBay decided to judge sellers based on things like Shipping Time and Shipping and Handling Charges – things which eBay knows nothing about – we had a giant train wreck in the seller community for a long time.  Sellers were PUNISHED, and big time, for not being able to live up to eBay’s crazy, uninformed standards.

But let’s be fair here – over time, the Rating System got a little better, then a little better again, and for a decent amount of time, eBay seemed to understand and reconfigure the metrics to mimic the real world of sellers.  In fact, sellers became so good at living up to eBay’s expectations that eBay’s Top Rated Seller status became pretty worthless.

Well, hold on to your butts sellers – it’s about to get Alice in Wonderland down the rabbit hole bad for a while again.

So here comes the ODR, which stands for Order Defect Rate but really means Oh Dammit, Run!

Why should sellers be freaking out about it?  Let me count the ways:

1. 2. 3. and 4.  EBAY DOES NOT SELL ANYTHING OR BUY ANYTHING, but they are about to judge the hell out of you for doing so.  Amazon also has an ODR and has for a while, but the difference is that Amazon has sold product since Day 1 and they completely understand the system and so their ODR makes pretty good sense.

5. Sellers are going to be pounded for receiving 1,2 or 3 ratings in their DSR’s.  I’ve never liked this even for the current system.  Here’s what a buyer who is unhappy does:  leaves a negative, leaves 1′s across the board for the DSR’s.  Do sellers sometimes deserve that?  Um, NO.  A bad transaction that was the seller’s fault was probably in 1 area – not all of them.  Unfortunately, eBay has done a very poor job of educating buyers that anything less than a 5/5 rating will mean serious trouble for the seller.

6.  This one scares me the most:  Return initiated for a reason that indicates the item was not as described.  Let me address one particular group of sellers with this one.  Are you listening? I’m going to scream anyway:

HEY USED SELLERS ON EBAY, KISS YOUR DISCOUNTS AND TOP RATED SELLER STATUS GOODBYE

Is there anyone on planet Earth who can’t see that this policy is going to significantly help sellers of New product and completely crush sellers of Used or Refurbished product?

eBay’s new benchmark for Top Rated Seller status is going to be < 2% Defect Rate.  This is a very simple conclusion for me – Used/Refurb sellers are going to be kicked out of the Top Rated Seller program by the Titanicload.  They will lose 20% discount, visibility, and ranking.

dr

If you were to research large e-commerce company performance even the ones that only sell new product will not be > 98% perfect.  Used item sellers have no chance here at all.

It’s always interesting when eBay makes moves like this because if you read between the lines you can identify where eBay is trying to ‘push’ the marketplace.  This move sure seems to be a clear statement that eBay wants Used product on the site way less than New, which continues their trend of implementing policy that leads to New goods – policies like actively recruiting brands to the site and crushing the Auction format in favor of the ‘standard’ e-commerce Buy It Now model.

I spoke with a seller the other day who has a 99.9% feedback, 4.9 5.0 5.0 5.0 DSR’s, and is Top Rated – who is losing TRS when the ODR rolls out.  I suspect that, across the board, many more sellers are being dropped in rating than are holding or being promoted because of ODR.

I am looking forward to seeing the data on this after we get a Quarter in the new DR era – I love eBay sellers and I hope I’m wrong.

Kevin

Come play with me at GodImSexy.com

 

 

 

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Let’s Face It – Sometimes Running A Business Is Just Like This

Hi gang,

groin

 

Admit it – running a business isn’t always easy.

In fact, there are days, sometimes weeks, where you just feel like you’re getting nut-punched over and over again.  You’re an entrepreneur, so you can always see the forest for the groin, but that just doesn’t stop the pain sometimes.

In the event you are NOT and entrepreneur, and want to know how a bad day feels to a business owner who has his entire being engaged in building something great and yet trips up now and then,  I happily present THIS:

Have a great day!

 

Kevin

Come play with me at GodImSexy.com

 

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Hey Media – Stop Rewarding Mediocrity With Startups

Hi gang,

Does anyone remember what true innovation is?

Innovation is dreaming up and implementing something which will literally help the entire human race. The development of language was innovation.  Mass crop production was innovation. The microchip was innovation.  The internet was innovation.

You know what’s not innovation?  Almost every new startup coming out of Silicon Valley that is heavily covered by the media.

They’re easy to spot. Ready?

1. The company or product has a single, cute name

2. 90% chance that the company has found some new way to aggregate and display existing data.

3. The founders are all very young and start every sentence with “So,”

4. 90% chance that the company is not disrupting anything. They’re simply making some stupid aspect of our privileged lives a little bit easier.

5. The media covers the CRAP out of the company, as if they have cured cancer or something.

The sad part is that true innovation is happening every day across thousands of companies worldwide. Unfortunately, since they don’t make it easier to share a photo or rent movies, you just don’t hear about them very often.

The companies changing the world are hidden away in research parks. They’re making nanorobots to fight cancer.  They’re analyzing stem cells to heal the human body. They’re mapping the human genome and brain. They’re discovering new types of renewable energy. They’re designing new spacecraft. They’re working on tractor beams and ion cannons and teleportation and faster than light travel. In other words, they are trying to advance human civilization.

This prediction for Humanity’s next 40,000 years is worth fighting for

C’mon, media companies – spend some time on covering the future of the human race. It’s really great that I can listen to music on my phone, but for my money I’d take an Elon Musk over a Steve Jobs any day.

-Kevin

Come play with me at GodImSexy.com

 

NOTIMPRESSEDFIANL

 

 

 

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It’s Not About Falling Down – It’s About Getting Back Up

Hi gang,

So, you fell down.  Your deal didn’t go through. Your business collapsed.  Your financing wilted. Your business partner just left.

Boo hoo. The sad truth is that nobody cares.

ALL entrepreneurs fall down.  Some, like me, have fallen down a LOT lol. There’s an easy choice to make: do you stay down or do you get back up?

 

Go get ‘em!

-Kevin

 

 

 

 

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Monday Morning e-Coffee : Hey Baby!

Hi gang,

Take a look at this picture:

sundaynight

 

If you are a “normal” 9 to 5′er, this picture will crack you up! Sooooo true!

An Entrepreneur won’t understand this pic at all for 2 reasons:

1.  We are not necessarily sure at any given moment what day it is

2.  To us, EVERY day’s picture would be a 1/3 mix of Saturday, Sunday, and Sunday night.

Go get ‘em!

-Kevin

Come play with me at GodImSexy.com

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Motivation Sunday: The Perfect Moment

Hi gang,

The perfect moment doesn’t exist.

At least, not the one you’re waiting for.

I’ll bet you can think back to perfect moments in your life.  They are different for everybody, but we all have them.  A wedding. The moment you fell in love.  The way the wind felt in your hair and the way the warmth of the sun caressed your face on that boat last summer.

Perfect moments are a choice.  You choose to remember a moment as perfect, just as you can choose to make this moment perfect.

And don’t we all need more perfect moments? It’s up to you. Stay focused. Stay present. Notice your surroundings.

There’s a perfect moment right there in front of you.

perfectmoment

Happy Sunday,

Kevin

Come play with me at GodImSexy.com

 

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Amazon Prime Membership Raised To $99 – Still The Best Deal Going

Hi gang,

what if

Amazon Prime members today were e-mailed and told that the price of their Amazon Prime membership will increase from $79 to $99 a year.

I am pretty certain that this price increase angers – nobody.

Let’s face it – Amazon Prime is an amazing deal. Not only can you receive just about everything in 2 days for free, but you also get an amazing 40,000 video streaming service which is growing quickly and adding original content (ala Netflix’s House of Cards).

If I would venture a guess, I’d say that Amazon will lose less than 1% of memberships because of the price increase. Amazon needs the money – unlike most companies that offer loss leader products to attract buyers, Amazon uses the entire shipping process as its’ loss leader. It’s a move that is turning out to be brilliant.

-Kevin

Come play with me at GodImSexy.com

 

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eBay Spring Seller Release 2014: Detailed Seller Ratings Are Out – Defect Rate Is In

NEWDSR

Hi gang,

Many moons ago, when eBay wanted to implement a change in policy or code they would just roll it out whenever they felt like it.  I remember one change in particular that eBay decided to roll out in mid-November – right before the busiest time of the year. The change had bugs in it and sellers were deeply impacted by it. A few years ago, eBay very smartly began to roll out changes in planned sequences which they called Seller Updates.  Today, eBay released the Spring 2014 Update. Let’s talk about them.

First off, if you want to read everything in full, you can go to eBay’s Seller Information Center here . They also have a video up which discusses the changes here

What I want to say is that in general, eBay casts very broad, very wide nets with the changes they make. Depending on how much you sell and what you sell, these changes could impact you negatively or positively.  I’m just going to hit some of the highlights. Here we go:

From eBay’s website:

“Starting with the August 20 monthly seller evaluation, a new measure, the transaction defect rate (“defect rate”), will replace the current four individual detailed seller rating requirements in evaluating seller performance. This new rating may impact your status”

This is going to be the most contentious of the changes and I am going to predict that sellers are going to be the most vocal about this one. Couple of things here:

1. So, Amazon has had this measurement for a while now. They call it the ODR, or Order Defect Rate. If you sell on Amazon at all, you’ll recognize this new rating immediately. It’s very interesting that eBay is, once again, moving towards Amazon with policy

2. They are REPLACING the current DSR system.

“Starting with the August 20 evaluation, to meet eBay’s minimum standard, sellers can have up to a maximum 5% of transactions with one or more transaction defects over the most recent evaluation period. A maximum 2% will allow a seller to qualify as an eBay Top Rated Seller. Only transactions with US buyers count.”

1. I don’t think they stated the penalty, but you can have a max of 5% “defective” transactions. How this will work out is anyone’s guess. For various reasons, I don’t think you could ever do an apples to apples comparison of Amazon ODR and eBay DR – the platforms are just too different.

2. So now, instead of a feedback goal, you’ve got a Defect Rate goal of 98% perfect to become a Top Rated Seller and be boosted in search results.

“The defect rate won’t affect your status until you have transactions with defects with at least 8 different buyers (at least 5 different buyers to impact Top Rated status) within your evaluation period”

1.This is the “casting a wide net” that I was talking about. So, a small seller might take months to have 5 different buyers that affect their Defect Rate.  A large seller will be affected in a single day.

2. Also, this will really affect sellers of used/refurb items over sellers of new goods.

To summarize these particular changes:  eBay is doing away with their Detailed Seller Rating System in favor of a new Defect Rate metric. The DR looks to be one of the only determining factors now in Top Rated Seller status and search results, even above overall Feedback %.

At first glance, this seems to be a pretty dramatic change in policy. Unfortunately, it’s also going to be very tough to determine if the change is a good one or a bad one for sellers. eBay spent a ton of time and energy developing the DSR system. Yes, it was a really flawed system, but I’m not sure that the new DR system is going to improve on it or just confuse the heck out of both buyers and sellers for a while. In reading through the changes, eBay doesn’t appear to be adding any additional rewards for meeting the new qualifications.

” To qualify for the Top Rated Plus seal and 20% final value fee discount between November 1 and December 31, your listings must include the new extended holiday return option, with returns accepted through January 31. Bullion, Gift Cards, Tickets, and all Business & Industrial categories are exempted from this requirement”

I don’t know how I could be reading this wrong, but is this saying that sellers must have up to a 60 day return policy at Christmas? Wowza, that’s a long time. Again, though, I don’t know what this new policy is fixing – most sellers offer a very generous return policy and guarantee anyway. Personally, I think that eBay is the only marketplace where sellers have to state their own return policies – wouldn’t it just be better to standardize them?

eBay then moves on to the returns process. Of course, every seller deals with returns. Recently, eBay launched a returns portal for sellers and continue to integrate the eBay returns process into the platform:

“Buyers using hassle-free returns are happier. The process is streamlined for you. And now, with the latest enhancements, managing returns is easier than ever”

“Confidence-boosting message to buyers on your item page: Buyers appreciate knowing that they can initiate a return and print the shipping label—and if necessary pay for shipping—right from My eBay. Now, to encourage the purchase, eBay lets buyers know right on your item page that you offer that service and they can buy with confidence”

Returns is another “your mileage may vary” system.  I would imagine that small sellers like the returns process built in. Large sellers, however, are using completely different systems to handle returns, and I think the last thing they would want is to have their returns processes dictated by eBay and be forced to generate shipping labels and pay eBay postage rates.  By the way, I think that is exactly the plan – eBay will require all sellers to use eBay returns at some point.

The rest of the update concerns Best Practices for sellers to prepare for the updates, category changes, etc – the usual.

What do you think, sellers? Are the changes going to help or hurt you?

-Kevin

Come play with me at GodImSexy.com

 

 

 

 

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What Should Every Entrepreneur Be Watching On TV? Surprise – It’s Not Shark Tank

Hi gang,

Shark Tank is a great show and every single entrepreneur should be watching it.  I find the premise amazing. Each week, several different business owners pitch their business ideas to The Sharks – a motley crew of hugely successful business giants. If the pitch is right, the product is good, and the presenters are deemed worthy, the Sharks will agree to fund the businesses with their own money.  If you’re an aspiring business owner, appearing on Shark Tank is like being hit by a bolt of lightening made of gold. Even the businesses turned down by the Sharks still see huge changes in their businesses on the PR of being on Shark Tank alone.

sharktank2

I actually sit down with my whole family every week to watch Shark Tank. I’ve got 3 young entrepreneurs to train and when else can I explain what a “royalty in perpetuity” is?

But Shark Tank is not the best show on TV for entrepreneurs. Know what is?

Discovery Channel’s Gold Rush

gold rush

I mean it’s hands down, no questions asked the best show about business on TV. Let me explain.

Gold Rush follows three different gold mining operations spread out across Alaska, Canada, and, this season, South America. The show documents each team’s quest to locate, dig for, and cash in on the most wonderful treasure of all: gold.

The three teams are very diverse.  You’ve got:

1. The Dakota Boys: Fred and Dustin Hurt – a father/son team with a small crew.

dakota

2. 316 Mining: a larger, highly experienced crew led by the hapless Todd Hoffman (way more on him in a minute)

todd

3. Parker Schnabel, a 19 year old kid from a mining family who has come into his own this season.

parker-schnabel-bio0-1

 

What does Gold Rush teach us about owning a business? Let me count the ways

1.  You have to chase a dream. That dream may not come true, but you have to chase it anyway. The guys on Gold Rush, when it comes down to it, really don’t know if there’s any gold. They rely on their experience, their faith, and their pigheaded determination in the hopes of striking it rich. They toil and toil for days and weeks without knowing the moment of truth.

2. Successful businesses don’t succeed for no reason. It takes hard work. If you don’t know anything about gold mining, then what you think is that these guys take pickaxes and find large chunks of gold nuggets lying around.  Nothing could be further from the truth. The fascinating discovery of Gold Rush is that most gold exists in little tiny flakes, barely visible, scattered within tons and tons and football fields worth and cities worth of worthless dirt.  To get the gold, these teams work and work and work and work. It’s not magic or rocket science. It’s the day to day hard work that gets the gold.

3. Successful businesses are the sum of hundreds and thousands of individual decisions. Sure, every business has that Eureka! moment where everything can change, but for the most part, a business will succeed and fail on small decision after small decision after small decision, day in and day out.  It takes excellent, consistent leadership skills to accomplish that. The guys on Gold Rush, on a daily basis, have to make quality decisions about where to mine, how to mine, how to use their equipment, how to fix their equipment, how to use their labor, and how to ensure their efforts are getting the gold.

4.  Creative problem solving is critical to success. At the end of a mining season in Alaska, it gets cold…and snowy…and then colder…and then the ground and equipment freeze.  Parker Schnabel faced this exact problem at the end of this season and he was not at the goal he wanted for himself for the year.  So how do you fix frozen ground? You blast it with water – and that’s exactly what he did, which added weeks to his season. There are dozens of examples of creative problem solving on Gold Rush, but you get the point – problems will arise, and solving them correctly can guarantee success.

5. You need a good leader.  Nothing is more important to a company’s success. If you want to watch the effects of bad leadership on your business, you have to look no further than Todd Hoffman and the 316 Mining Crew. I spent a lot of this season yelling at my TV. Now, Todd’s crew is excellent – he’s got the incredible Dave Turin, Todd’s experienced father Jack, the jack-of-all-trades Jim Thurber, and many other very good men. But a good crew is nothing without a good leader, and Todd Hoffman is one of the worst I’ve seen.

Take this season, for example.  Todd’s crew did pretty well last year in Alaska, hauling in more than $1.5 million in gold. They were on a good claim with good equipment.  So what did Todd do this year? He abandoned his good claim and hauled the entire crew down to Guyana in South America because he’d heard somewhere that there was good gold there.  He spent what seemed like months scouting locations and finally settled in Guyana. He shipped all of his equipment and all of his crew to a dense, rainy jungle with impassable roads that they had no experience mining in.  Then, Todd surprised even me when he….left his men behind and went home for a while. That’s right – he abandoned his operation. He just told his guys to “get some gold” and left.

The rest of the season went tragically if predictably.  The Guyanese jungle proceeded to kick the 316 Mining Crew’s asses for the entire season.  The rains made the roads pure mud. They couldn’t find a spot with gold. They couldn’t get their equipment to work correctly in the humidity. The heat and humidity and mosquitoes were unbearable. Todd returned to a disaster – there was no gold, tens of thousands of dollars wasted, and a dejected and upset crew.

Again, Todd made another bad decision. A local Guyanese crewman mentioned to Todd that there might be diamonds on the land, and without hesitation Todd said “Yeah man, let’s do it.”  With zero experience, Todd Hoffman and his crew were instant diamond miners. Near the end of the season, Todd met with the claim owner and told him that he had found no gold but that he had found a jar full of diamonds.  The moment was gut wrenching – the claim owner took the jar of diamonds and said “these are worth maybe $1,500 dollars.  Get off my land”

A good leader means everything.

 

Gold Rush is the best show on TV for entrepreneurs because it lays out the harsh reality of what owning a business is.  To succeed, you have to be a creative leader and  a consistently good decision maker. You have to work really hard. Every day. There may not even be any gold, but dammit you’re going to try.

Most importantly, success is not going to happen by wandering around and picking up gold nuggets. Success is going to happen when you dig through piles and piles of dirt. Success is earned.

-Kevin

Come play with me at GodImSexy.com

 

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