Thursday, April 24th, 2008
eCommerce Summit Q&A: Part 1
As promised, I will be posting Q&A sessions on Ink in multiple parts to make sure I cover all questions posed both here on the blog already, and at the eCommerce Summit. The following questions were asked immediately following Lorrie’s keynote yesterday.
Q. Based on a group study this morning, 2 out of 5 of the current PowerSellers with the best store listings on eBay Pulse will not qualify for PowerSeller status based on DSR ratings, when that goes into effect. How are you going to address this issue?
Lorrie Norrington, President of Marketplace Operations: It’s true that some sellers won’t make the grade with DSRs. When we put out the DSR requirements, we said you would need to have a 4.5 or above to qualify for PowerSeller status. We also gave sellers until July 1 to bring up their DSRs. Based on what we presented earlier, it’s obvious that a high percentage of PowerSellers are not only making the grade with DSRs but they’re qualifying for discounts. Sellers need to reach out to us and their TSAMs because clearly there are some best practices out there to ensure folks get the highest DSR possible; whether it’s over communicating or immediate feedback, for example.
Todd Lutwak, Sr. Director of Seller Development and Programs: The sellers have done an excellent job raising their DSRs. I think that sample that you took locally is definitely different from the metrics we’re seeing. Over 80% of PowerSellers have 4.5 DSR or above. We’re continuing to monitor as we progress to that July date.
Lorrie: I’d like to add that we really appreciate the work that PeSA is doing here. The educational work is going to be really important for sellers that want to get their high DSRs. To Todd’s point, 80% are doing it now and we want to have more.
Q. You said that there were some retaliatory remarks that prompted the change to Feedback? Can you elaborate on that?
Lorrie: I was referring to the fact that sellers were 8 times more likely to leave a retaliatory negative remark and that is why we changed the Feedback system.
Q. What was happening there? Can you talk more about this?
Matt Halprin, VP of Trust and Safety: The Feedback system was set up to make sure that both parties were accountable to each other. What has happened over time is that sellers have increasingly held off on leaving feedback until the buyer leaves feedback to make sure they don’t get a negative rating without being able to counter that. Sellers used to do this twice as much as buyers; now it is eight times as much. So basically buyers were no longer willing to hold sellers accountable for their performance; which is why 90% of sellers have positive feedback scores of 99% and above. As a result, buyers don’t trust the feedback system because they can’t discriminate between great sellers, average sellers or poor sellers. We needed to fix that because eBay is based on trust. If buyers don’t have trust they won’t send money or bid as much on an item (we’ve all talked about the notion of ASPs not being quite as high as they used to be). It is up to us to help your economics by making sure that buyers are more confident when they bid. Which is why we changed the system and with this more honest of a system we’ll be able to do things like elevate items in search and reward sellers for top performance with bigger discounts. All of which will create more of a race to the top than we’ve had before.
Lorrie: We announced this change back in January and it goes into effect in May. My advice is as soon as your buyers pay you, give them positive feedback.
Q. I was at the Catalyst Conference and I’m really excited to hear about some of things you’re introducing and to see you guys out here in force. You said it today, and it came up back at the Catalyst Conference about the .02 points discrepancy for non-domestic DSRs. There are some areas of this world that just don’t have the same postal service as we do here in the US. There is a distinct drag in Italy for example, really slow. Another is Slovakia. I shouldn’t have to tell the Canadian customer that his mail system is stinky – he already knows it – but it won’t stop him from dinging me on shipping. I know you look at it from the 50,000 foot level but it would be great if you could address it more granularly so maybe I could qualify for the 15% discount next time. [Applause]
Matt: Although this is the first time I’ve heard about Slovakia, it’s not the first time I’ve heard about Italy or Canada. We’re aware of it and there are a variety of ways we’re looking at addressing it. I don’t think right now that we have a tool that allows you to lock out a country like Italy for example (if you simply choose not to ship there) but that is one end of the spectrum. Just to share one bit of information, and I admit it is 50,000 foot information, but it is very telling for us. We thought that all Cross Border Trade DSRs were going to be a little bit lower than domestic DSRs because of shipping. Actually, around 50% of sellers have cross border trade DSRs that are equal to or higher than their domestic ones. So obviously there are some best practices in place that are helping address that possible situation. Now, I want to make sure I affirm what you said – we are looking directly at Italy and Canada to address that specific issue.
Q. Talking about shipping. Shipping & Handling cost seems to be the lowest DSR for most eBay sellers, I think we can all agree there. Shoppers love free-shipping. Can you talk about how eBay looks at free-shipping relative to DSR scores as well as free-shipping economic models that work for sellers in the eBay landscape?
Matt: Shipping and handling is the lowest DSR of the four but I do want to point out that 72% of all DSRs left for S&H are 5s. Frankly, I think that means the DSRs are working because we all know that S&H charges on eBay are higher than the Internet on the whole. So we have an online shopping environment that has set buyer expectations and we all need to find ways to address that together.
Dinesh Lathi, VP of Seller Experience: The fact of the matter is that free shipping is the standard for eCommerce now. Sellers who want to meet buyer expectations need to aspire to that. It is our job, the people here on stage, to help you do that. So, there are definite things in the works at eBay that will help you accomplish that. Look for that soon.
Lorrie: And, in the end, I think it’s pretty straightforward that you need to be very specific when you identify shipping costs and set that expectation and again, to Matt’s point, there are a lot of people out there getting 5s for S&H.
Q. I understand the retaliatory feedback concept. I don’t agree with it but I understand it. What I don’t understand is why DSRs are anonymous. If we have customers leaving valid DSRs we want to know who they are so we can make things right. If we can’t do anything to counter their feedback, we should be able to see what they’re leaving us. [Applause]
Matt: This is a tough issue and it’s one that we haven’t settled on inside eBay yet. I’ll explain why they are the way they are now but also talk about the fact that they may be changing. First of all, why wouldn’t we make it completely transparent? The answer is that we have seen sellers who send emails after receiving a negative, (for example, they have received a 3 or 4 from a buyer) and the seller begins to harass the buyer. I get examples of this sent to me from buyers all the time. The harassment is what we’re really trying to get away from. eBay really is the only place where a merchant can kick the buyer on their way out the door. This is the reason why we might keep it anonymous. The argument for making it completely transparent is very obvious. It will help sellers learn about what they’re doing right and what they’re doing wrong. So what I think you’ll see at a minimum is us moving to a place where we provide the information in different ways – whether it’s by geography or by category – or go all the way and provide complete transparency. We’re not sure yet, we want to monitor how the new feedback system works before making our final decision.
Lorrie: It is an important point though. I think it’s obvious that our intent is to put more trust back into the system. We think this new Feedback system does that. Like Matt said, we haven’t even rolled it out yet so we’re just going to have to see how it goes. I think it’s a great point of learning for us. I think this is a good time to emphasize what we’re trying to get across to sellers. First of all, we want an incredibly open dialogue with you and to listen to you and there will be places where we continue to roll out new initiatives or experiments that we’ll want your input on. There will also be places where we won’t change because we think it’s best for the marketplace. But the open and honest dialogue with each other can only help. So, in the case of the new feedback system, we haven’t rolled it out yet, and as we do roll it out we’ll learn from it.
Q. We have a shipping calculator on our system so that anyone that comes and makes a bid can calculate the shipping cost before they make a decision to buy and yet we still only have a 4.6 for shipping. We would like to be able to respond to them to find out why they’re not leaving a 5 even though they knew the cost was coming.
Matt: With the new system I think everyone in this room will get more specific information on a transaction that has not gone perfectly well. Buyers will now have 80 characters to provide feedback and detail all without the fear of a negative retaliatory feedback.
Lorrie: And I think this is exactly the kind of input we’re hoping to get here. Our intent is to make your experience better so it’s this kind of feedback that helps get us there.
At this point, the keynote Q&A was ended to allow for the first sessions to commence. Immediately following this initial Q&A session, all eBay representatives moved into the panel room for an hour of further questions and discussion. That one is coming next time.
Cheers,
RBH
Tagged: competitive, cross border trade, dinesh+lathi, dsr, ecommerce, ecommerce summit, feedback, lorrie+norrington, Marketplace, matt+halprin, online trade, pricing
Jason RakowskiOn 04.24.2008 at 5:11 pm Said:
Good Layout and design. I like your blog. I just added your RSS feed to my Google News Reader. .
Jason Rakowski
implogOn 04.24.2008 at 5:29 pm Said:
Matt Halprin said about hiding the identity of buyers’ DSR ratings of sellers:
“Matt: This is a tough issue and it’s one that we haven’t settled on inside eBay yet. I’ll explain why they are the way they are now but also talk about the fact that they may be changing. First of all, why wouldn’t we make it completely transparent? The answer is that we have seen sellers who send emails after receiving a negative, (for example, they have received a 3 or 4 from a buyer) and the seller begins to harass the buyer. I get examples of this sent to me from buyers all the time. The harassment is what we’re really trying to get away from.”
Go after the few sellers who harass buyers. Don’t punish all sellers.
Go after the few sellers who leave retaliatory negative feedback for buyers. Don’t punish all sellers.
Why drop an atomic bomb when technology allows, no, demands, surgical strikes?
If there are a few bad eBay corporate employees should all eBay corporate employees be punished?
TWOn 04.24.2008 at 5:29 pm Said:
A comment on free shipping:
1. I would have to raise my starting prices to cover.
2. eBay would be payed FVF’s on what my item sold for.
Both would mean more money for eBay and less for me. If eBay keeps this up I will have to quit selling here. I simply can not afford it any more.
Is this what you want?
implogOn 04.24.2008 at 5:38 pm Said:
Dinesh Lathi said:
Dinesh Lathi, VP of Seller Experience: “The fact of the matter is that free shipping is the standard for eCommerce now.”
Is that so?
Really?
So why did I just pay for shipping of the 2 lbs of Stilton cheese (yum) I bought through Amazon?
Why did I pay for shipping for 3 MP3/multimedia players I bought from QVC?
Why does eBay’s own store, The eBay Shop charge for shipping?
What am I missing?
DagnyOn 04.24.2008 at 5:50 pm Said:
“Dinesh Lathi, VP of Seller Experience: The fact of the matter is that free shipping is the standard for eCommerce now. Sellers who want to meet buyer expectations need to aspire to that. It is our job, the people here on stage, to help you do that. So, there are definite things in the works at eBay that will help you accomplish that. Look for that soon.”
Gee maybe it’s just me, but I do a fair amount of online buying (not on eBay) and I don’t find that “free shipping is the standard for eCommerce now”. I guess I am not shopping at the right places.
DagnyOn 04.24.2008 at 6:23 pm Said:
“Lorrie: We announced this change back in January and it goes into effect in May. My advice is as soon as your buyers pay you, give them positive feedback.”
Why do buyers need to receive feedback at all? If sellers can not be honest in the feedback they, how does it have any meaning to the buyer? It is a positive coerced by eBay.
At the time of payment all I can say about a buyer is “Paid”. What is the point? Why not just do away with it. Richard, ask Lorrie that.
If I don’t leave feedback first and the buyer leaves negative feedback saying “Seller does not leave feedback first.” will eBay remove it under the abuse policy? That type of feedback has nothing to do with the transaction or the item or my customer service and will greatly affect my ability to do business on eBay. Ask Lorrie that.
JewelrySellerOn 04.24.2008 at 7:54 pm Said:
‘Free Shipping’ certainly is not the standard of the internet. And if it was, historically, with rising fuel prices, shipping costs will skyrocket, too.
We can absorb basic level shipping as free within our product pricing. If the customer wants ‘rush’ shipping, we can’t subsidize that cost for last minute purchases as holiday or birthday gifts.
And we definitely can’t absorb the $22 to $26 (prior to the USPS May 12th increases) for USPS Express International export shipments. We can’t build this into our pricing, just in case the sale turns out to be outside the USA. We may have to discontinue export business. Why risk the DSR hit?
JewelrySellerOn 04.24.2008 at 8:41 pm Said:
Dinesh Lathi, VP of Seller Experience: “The fact of the matter is that free shipping is the standard for eCommerce now.”
Let’s ask Mr. Lathi to supply a list of the eCommerce community and products avaiable with free shipping -
It’s not -
Amazon
Sears
WalMart
Sharper Image
etc., etc., etc.
JJHOn 04.24.2008 at 8:46 pm Said:
Dinesh Lathi said:
Dinesh Lathi, VP of Seller Experience: “The fact of the matter is that free shipping is the standard for eCommerce now.”
What the Hey?????
My family buys stuff online all the time. THERE IS NO FREE SHIPPING ANYWHERE!!!!!!!!!!!
Where do STUPID COMMENTS AND IDEAS LIKE THIS COME FROM?
You people must be on some kind of California designer drugs.
DaveyOn 04.24.2008 at 8:53 pm Said:
“Free Shipping?” How does one pull that off when one ships domestically and internationally with the same item BIN price, yet shipping costs including indemnity are quite different? Or, do we deny free shipping to our cross-border buyers? Yep, that will make them happy.
Free shipping is NOT the ecommerce standard anywhere I shop (Amaz*n, Newe*g, OfficeM*x, etc.), except for promotions or very high minimum orders. And then, it is usually for 2 week shipping with no rush, with constant pressure to upgrade. Again, faulty facts and numbers used. Does eBay not know we see through this?
Why do many free shippers still have less than 5’s for shipping cost? Why doesn’t offering free shipping get you an automatic 5 on that DSR? All fairness says it should! And, eBay is getting their pocket lined from inclusion of shipping costs into the item price, so they should be happy to return some favor.
Why do I hear Lorrie and Matt always talking about how they will roll something out, THEN learn about it? Why aren’t they working with sellers actively FIRST and save us bruises from paying their “tuition” to learn?? These kind of post-release discussions shouldn’t even be happening! What a lousy way to run a business! Beat your customers up until you perfect your business model.
Why can’t the Shipping Time DSR be automatic between payment release and acceptance by the shipper? Lots of problems solved both domestic and cross-border, and everyone is happy. This is not stroke-of-genius thinking…
I still have not seen anything so far that proves eBay is actively listening and willing to work with their sellers to reach the site goals mutually? It may be gratifying to look out and see nodding heads, but I’m looking for results. They quite obviously do not have a working connection to the marketplace they are trying to revive. Sorry, but that is the arrogance we sellers talk about so often.
DaveyOn 04.24.2008 at 8:58 pm Said:
Dinesh Lathi, VP of Seller Experience: “The fact of the matter is that free shipping is the standard for eCommerce now.”
This needs to be interpreted in the light that I believe eBay management sincerely thinks they are the center of the eCommerce universe, therefore they set the standards by speaking them into being.
The only other regular source of free shipping I know of is b*y.com, also one of the leading customer service bottom-feeding companies. Last thing I got from them was an MP3 player sent Media Mail 3 weeks after order, rolling around in an otherwise empty box.
TheBrewsNewsOn 04.24.2008 at 9:08 pm Said:
From the Keynote address:
“1. Back in January, eBay said that the goal was to have 60% of PowerSellers qualify for at least a 5% discount and in Q1, 63% did qualify for at least the 5%.
2. It was estimated that 15% of all PowerSellers would qualify for the higher, 15% discount. In Q1, PowerSellers actually doubled that. 30% of all PowerSellers qualified for the 15% discount.”
From the Summit Q & A Part 1:
“Todd Lutwak, Sr. Director of Seller Development and Programs: The sellers have done an excellent job raising their DSRs. I think that sample that you took locally is definitely different from the metrics we’re seeing. Over 80% of PowerSellers have 4.5 DSR or above. We’re continuing to monitor as we progress to that July date.
Lorrie: I’d like to add that we really appreciate the work that PeSA is doing here. The educational work is going to be really important for sellers that want to get their high DSRs. To Todd’s point, 80% are doing it now and we want to have more.”
************************
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So, if I understand eBay’s statistics:
Approx 30% of Powersellers with DSRs 4.8 or above (15% discount)
Approx 33% of Powersellers with DSRs between 4.6 and 4.8 (5% discount)
Approx 17% of Powesellers with DSRs between 4.5 and 4.6
Approx 20% of Powersellers with DSRs below 4.5
If the eBay Pulse best store listings sellers have a percentage of 40% with DSRs below 4.5 that means the the bottom tier of Powersellers (based on DSRs) are more likely to be the higher volume sellers. Within the 4 tiers, what is the breakdown of Powersellers? In other words, in the top tier of Powersellers, those receiving 15% FVF discounts, how many are bronze Powersellers? How many are Titanium Powersellers?
And if 1/5 of current Powersellers are in danger of losing their status today, how many would have been in the bottom tier (lower than 4.5 DSRs) BEFORE eBay’s Seller Performance requirements were enacted last year? There are many Powersellers who left eBay voluntarily or who were forced out last year that would also have fallen in the bottom tier (lower than 4.5 DSRs) of all Powersellers. Ex: B-Land
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“Lorrie: We announced this change back in January and it goes into effect in May. My advice is as soon as your buyers pay you, give them positive feedback.”
So, if I understand you correctly, buyers “deserve” feedback when they pay? I guess that makes sense from eBay’s perspective because, in the current eBay environment, making payment appears to be “optional” for the buyer and so those who do actually pay should receive positive feedback. Buyers who decide not to pay for several items can simply create a new eBay ID and start over again, “buying” several items and then deciding later which ones they will pay for.
********************
********************
“Matt: With the new system I think everyone in this room will get more specific information on a transaction that has not gone perfectly well. Buyers will now have 80 characters to provide feedback and detail all without the fear of a negative retaliatory feedback.”
Sellers will no longer be able to evaluate a buyer based on their eBay feedback, which will be completely irrelevant since buyers will ONLY be able to receive positive feedback. Does eBay REALLY think eBay sellers won’t find other ways to evaluate their potential buyers? Websites such as Rottenbidders.com are springing up everywhere.
The question eBay should be asking is why do eBay sellers feel the need to leave negative feedback for buyers. Only on eBay do sellers feel they NEED to leave negative feedback because only on eBay do sellers NEED to review buyers’ feedback to know whether (and how) to protect themselves. The reason eBay sellers feel the NEED to do so is because eBay and Paypal are not providing the protections for the sellers.
One major thing that sellers seem to be asking for is for eBay to verify new buyers and to link any new IDs created to previously created IDs so that when a seller blocks one ID then all current and future bidder IDs will be blocked. Why is eBay opposed to making “new” buyers verify their identity? How can eBay be a safe place when one party to the transaction can create throw-away IDs at will?
“New” sellers are required to accept Paypal so they are, in essence, required to verify who they are and buyers are protected from “new” sellers since they are able to have Paypal protections. “New” eBay buyers have no such requirement. How can ebay say that the marketplace will be a safer place in the future without that requirement for buyers?
Patricia 1On 04.24.2008 at 9:11 pm Said:
“Dinesh Lathi, VP of Seller Experience: “The fact of the matter is that free shipping is the standard for eCommerce now.”
Will they ever make sense! They squeeze the life out of us with fees and now they want free shipping too? Why not just give them the items and walk away - we’d probably be ahead of the game. Sheesh…folks - we’re adults here…make sense please!
Also, if free shipping is the standard then why did the Ebay store charge over 5.00 to mail a 6.00 keychain that weighed less than an ounce! Like I said, MAKE SENSE!
JewelrySellerOn 04.24.2008 at 9:38 pm Said:
I knew if I attended this eCommerce summit I’d either turn RED or PURPLE depending upon whether I said what I thought or kept biting my tongue and holding my breath.
As before, even the executive team can’t ’shovel it’ and get the sellers or PowerSellers to buy it from them.
MechelleOn 04.24.2008 at 10:27 pm Said:
I’m taking a leap and am asserting that those of us who do business on eBay exponentially to the millions surpass the eBay work force executives included- in outside of eBay e-commerce purchasing activity. The insults never stop with these people. you people clearly imagine that we are of the basest experience and intellect. How dare you tell me that free shipping is the standard, and how dare you say that the whole of those of us selling on eBay out due the rest of e-commerce in shipping costs. You are so black and white- short sided- hollow in mind.
You can’t say free shipping is the standard- free shipping is only available on any online retailer site when there is a promotion and only with 75- 100- 150 dollars spent. As mentioned that is for 2 week ground, and I personally always just pay for my shipping so I can have it in a week.
Also, those companies are large retailers that can assume the cost of paying the postage, but who also get business postage rates that we on eBay do not benefit from. Your out of your minds
Do you know how many regular customers I have- do you think they may feel alienated if I jacked all my prices up by 4.60 each and told them they were now lucky to be shopping at my store because I am so excited to announce they will now be receiving free shipping? Are you freaking crazy???? I’ll be damned if I’ll disrespect my customers the way you do yours. My customers mean something to me not because they buy from my store, but because they are people and no descent person treats people the way you people treat other people. My effort is to always find a way to give them a better deal not to slap them in the face with higher prices and hyped up superficially enthusiastic BS trying to convince them that they are getting a better deal with free shipping but paying an additional 4+ per each item.
Sounds familiar doesn’t it- free gallery big hike on FVFs. A decrease a decrease a decrease a decrease- Every time you spit out your BS you loose on a low estimate a dozen customers. Keep your business advice to yourself- when you do it better than I come talk. That is an invitation I’ll never have to host, because you will never reach this high.
[edited]
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