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

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?

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

Today, eBay released the Spring 2014 Update. Let’s talk about them.

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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