written by Steve Grossberg, IMA President
I was looking at eBays DSR’s this morning. I pulled up the top 100 active ebay sellers in the USA and compiled a list of their respective DSR’s
Here are my findings
Item as described – average score 4.79
Communication – average score 4.66
Shipping Time- average score 4.58
Shipping Fee- average score 4.41
Below is percentage of top 100 scoring 4.5 or better in the respective category
Item as described – 99% scoring 4.5 or better
Communication – 93% scoring 4.5 or better
Shipping Time- 81% scoring 4.5 or better
Shipping Fee- 44% scoring 4.5 or better
What is really disturbing here is looking at the shipping and handling. When eBay announced the DSR strategy, sellers were voicing concern that eBay was going to use shipping and handling as a rating category.
This is totally unfair of eBay to do since it is human nature when something to do with prices consumers pay, the ratings would always be lower than what is probably realistic or true. Consumers always want a better deal when it comes to pricing.
Also it is disturbing that of the 4 DSR categories, shipping and handling is the only category that buyers know 100% for sure upfront in advance what they are getting before they purchase or receive service or item from a merchant. The other 3 DSR categories the buyer will never know before the transaction is completed and item received the service they will get. Shipping and handling fees are known and it is totally unfair for a buyer to rate someone on something known in advance with 100% certainty. It is fair on the other 3 DSR where the buyer would never know in advance.
Not only that but I cannot find any other venue or seller rating system on the internet where buyers rate sellers on shipping and handling fees charged.
Whoever thought of putting down shipping and handling as a DSR category should be fired, in my opinion. This was an idiotic move on eBay’s part and something that will hurt sellers and hurt eBay. What was this person smoking who came up with this?
I encourage everyone to look at their own DSR and I would be willing to bet 90% plus have the lowest DSR rating on shipping and handling regardless if you are actually losing money on your shipping and handling fees charged.
As we all know eBay is the highest cost place of doing business on the internet.
Looking at my personal numbers, in the month of May 2007 my combined ebay/PayPal fees were $26,052.00 and sold 4800 items only that month on ebay, but 400 were never paid for, leaving 4400 paid item. My average ASP was $15.54, so simple math taking $26,052 and dividing by 4400 items sold gives me $5.92 paid to ebay/PayPal per item sold. Average ASP again was $15.54 so divide $5.92 into $15.54 – 38% ebay take rate.
And eBay has the audacity to allow buyers to rate sellers on shipping and handling? I would gladly lose money on my shipping and handling if eBay was to lower their fees or take rate. As we all know eBay fees are a function of buyer demand or sell through. The higher the buyer demand or conversions, the less per item we pay in eBay fees or lower take rate per item.
I think we all need to take a strong stance against eBay having shipping and handling as a DSR category as it will ultimately hurt most sellers and eventually hurt eBay. It is a DSR that is destined to backfire and consistently be the lowest scored DSR.
I would rather see ebay replace this DSR with Would you buy from this seller again?
What eBay is doing here by adding shipping and handling as a DSR category is encouraging sellers to lower the shipping and handling, regardless if they are actually losing money on the shipping and handling fees charged vs. paid. I am willing to bet the vast majority of sellers will still be rated lower on the shipping and handling DSR then any other.
If eBay does not change their ways I think it would be great for all sellers to show their eBay fees paid in every listing. In other words, in my listings I could add to the template:
“In May 2007 $5.92 of the total purchase price of this item went to eBay for eBay/PayPal fees.”
This would be no different from what eBay is doing to sellers by having a DSR rating, than it would be for sellers clearly alerting eBay buyers of the factual information regarding the fees they the buyer pay eBay. Because ultimately it is the buyer paying those fees to eBay since sellers who are not recouping their eBay fees, will obviously not be selling on eBay.
Now honestly I do not think the best way of handling things is doing what I described above as I would be disparaging my business partner eBay. But obviously eBay has no problem in disparaging their business partners, us the sellers by having shipping and handling as a DSR category.
My eBay’s fees are my biggest expense next to cost of goods. Looking at my expenses of running budget video games, in eBay is 33% of my total expenses paid. Ebay is by far the biggest expense and eBay gets a lot more then I pay out in payroll even. How can our highest paid employee stab us in the back like this? Do they not know where their bread is buttered? Ebay, wake up and smell the coffee, stop disparaging and working against your sellers (customers) and start working with us. Our pain is ultimately your pain, what don’t you understand about this?
I would love to hear your thoughts and ideas.