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.
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.
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Tags: amazon, defect rate, ebay, odr