Looking at eBays DSR (Detailed Seller Ratings) – I am concerned

written by Steve Grossberg, IMA President

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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.

Click Here To Read Part 2

Comments

  1. says

    I wouldn’t worry about it. Seriously. I have a friend who does free shipping on all their items: their DSR for shipping cost is 4.8. You could look at this as “eBay buyers are crazy and even free isn’t good enough for some of them”, or you *could* see it as they got free shipping, exactly what they were expecting, no more and no less.

    I think that because buyers know the S&H upfront, they never get “a nice surprise” on shipping fees. So it’s going to average out as “as expected” – whereas all the other criteria give the buyer a chance to have a better experience than they’re expecting. That’s why those criteria tend to be higher.

  2. says

    Sorry, meant to also say –
    I absolutely 110% agree with the suggestion to add a “would you buy again” criterion to DSR. Brilliant idea, and one that eBay should implement immediately.

  3. says

    Sue

    Thanks for your comments. I do think one needs to worry though if ebay does as I suspect and use DSR ratings to align with best match search as part of their algorithms. I think all sellers and ebay would be better served with “Would you buy from this seller again”

  4. says

    Hi Steve–

    I think eBay has a mathemetician from Walmart and a VP from Best Buy running the strategy. So their thinking probably goes something like this:

    “We need to have lower prices, better product and a better experience than the rest of the internet (ie: Walmart/Best Buy/Amazon). Our excessive shipping/handling policy addressed this in 2007 (http://pages.ebay.com/help/policies/listing-shipping.html) but these other sites are catching up to us. Lets throw S/H in DSR and push down S/H prices more.

    If eBay replaces the S/H DSR with “Would you buy again” what other lever can eBay pull that incentivizes sellers to lower s/h prices so the site remains competitive with the rest of the net. Also, what if eBay added a 5th component (Would you buy again) and then averaged all 5 out making everyone look “better”, but showing everyone where they need improvement.

  5. Nina says

    I’m a buyer and a seller, but I notice that some Sellers do over charge to much. As I buyer I brought a printer dock, the shipping weight was only 2 lbs but was charge $20. Darn thing was it wasn’t even shipped priority mail which would have been $8.95 plus I would expect to pay a handling fee. I think $20 was a over kill. But I was looking at the total cost of course. Needless to say, I end up reselling it with a shipping cost of $9.95. Plus I got more for the product then I original brought it for. I might not of made any money but I was happy to get rid of it. I change my mine and decided I didn’t really need it. One of them impluse buying moment. lol

    I will not buy from someone that has a high shipping cost. So their nothing I need to complain about. As I know what the cost and shipping is before I buy the product. If the total price is less then what you would pay for in the store, That’s a good deal. Usually I will only charge $1 to $2 for handling fee to cover for package materials.

    But serious though, I don’t think anyone is ever happy with the shipping cost. I looked at a lot of people feedback on shipping like you said, It’s the lowest rating on almost everyone. My rating is 4.6. I thought I was doing go by only charging 1 or 2 bucks for handling. Gee Wiz

    Do buyers realize that sellers have to pay alot of fee’s?

    I’m glad I came across this.

    Thank You

  6. says

    I am with you 100% on everything you have said. What I find so ironic; I have been screaming the same words for weeks…lil ole me is a just a 38 year old silver level who left college to care for an Autistic son and 3 other kids…yet my first words were “eBay has set us up to fail”.

    People have always told me I have a way of thinking things thru, but I am in shock on how many points I mimic your opinions and facts without ever reading your articles or interviews. I really wanted to be wrong.

    I have posted on blogs everywhere, I have started my own, I have now quoted you many times and given links to your articles.

    People are not realizing the severity of these changes. I am appalled at the number of sheep there are in this world who refuse to do the thinking for themselves…seriously people, WAKE UP!

    After 9 years on ebay, we are trying harder then ever to get 100% off. I don’t even buy there anymore. Over and over again we have shown we cannot trust this company to make good decisions, the prices keep getting higher, buyer fraud rate higher, and the sales rate lower. Why do we even consider ebay to be the cream of the crop? It is all…just as you said…smoke and mirrors.

  7. jo-el says

    The first problem was people charging more for shipping and less for the opening bid, thus causing eBay to lose money on fes when the product sold.

    Many long-term sellers became reasonable, mabe charging, at most, a couple of bucks handling charge,

    But still, PayPal takes a bit out of your postage. If you charge someone $5.95 for priority postage, PayPal suddenly takes some of that coin and you lose money. Arrgh.

    You can live wih the DSR, but now they are tied into discounts on eBay fees. So, can’t wait to see what happens long-term.

    Looking them over, everyone should be satisfied with 4s, since it basically means the train ran on time. A 5 would be almost hand-delivery with song and chocolates and a rebate check, which few of us are willing to do.

    Good post.

  8. CEP says

    “Looking them over, everyone should be satisfied with 4s, since it basically means the train ran on time. A 5 would be almost hand-delivery with song and chocolates and a rebate check, which few of us are willing to do.”

    Now all we have to do is get ebay to accept that a 4 is good. The way things will be is if you get a 4 you go to the back of the search and possibly or better probably be thrown into paypal hell and holds on your funds.

    This is a move to shove out small sellers plain and simple. Looking at the top 200 powersellers who will now get all the breaks shows they have huge amounts of bad feedback in all categories. Of course their vol will keep them out of the fire. If anybody truly believes ebay is doing this all to help the buyer then they have been fooled. They only want to milk small sellers dry on the way out. My measely 528 perfect FB. DSR’s of 4.9, 4.9, 4.9, 4.75, 17000 total feedback left doesnt matter to them. All I need is 1 or two bad buyers and im done. The first time im put into that risk cat that puts me in paypal im out of there. I’ll refund the buyers money, pay my bills and take off. I am supporting the boycott and will continue to do so while joining other auction sites till I find one that is to my liking and then im gone anyway from eaby.

  9. Rachel says

    Think it through….

    Ebay is suddenly encouraging ALL sellers to offer free S&H. How does this benefit Ebay?

    If you offer free S&H, you have to make the money up somewhere or face the loss. More and more sellers who DO choose to offer free shipping will be factoring the shipping into their item price.

    Once you add it to item price, Ebay takes their cut off the listing fees, and then again on the final value fee. (And then your Paypal fees, of course.) More profit for Ebay, and the DSR star for shipping will STILL be low.

    They are NOT going to change this. It’s the ULTIMATE Ebay scam.

  10. PFTP says

    I’m no particular fan of ebay but you’re complaining up the wrong tree and managed to leave out an important point. My purchases tend to be of a fragile nature and I’ll gladly pay someone $10 to ship a 1oz. item if I think they’re going to give me $10 worth of packing. On the other hand, if they’re going to charge me six bucks more than the actual shipping charge and just throw everything into a box with no padding whatsoever… well, that particular seller got a “2” and deserved it because the shipping I paid for cost quite a bit more than the shipping I got. Bad ratings happen enough and the seller will either have to drop their charges to a level consistant with their service, or provide what they’re charging for. Still, in my case nothing was broken but I’ll attribute that to the USPS rather than the seller. The point: The seller I describe was more than likely over-charging me for shipping to make up for ebay fees he/she/they/it didn’t want to pay and that’s a no-no in my book.

    Something else to think about: You don’t have to pay for a storefront. You don’t have to pay for advertising. You don’t have to pay for all the other various and sundry things that you’d have to if you were running a retail establishment. Quit bellyaching about paying ebay’s fees and just do a better job than the next guy. All told, selling on ebay may not be as service-oriented as retail but service still counts for a lot.

  11. carys says

    I’ve just started ebay selling. Had all positive feedback so far, praising me for my packaging, have lost money in every case on the postage and yet I still dont have the full five stars in the DSR!!!! Also I describe the item well, post photos, offer full refund if buyer isnt happy and even on that one of my five stars is eroded. What do ebay buyers want – blood?

  12. carys says

    The trouble with a ‘Would you buy from this person again’ policy is that some people might say no due to the fact they would no longer need that particular product. That would score badly against the seller for the wrong reasons. Unfortunately star systems need to be thought through very carefully to make sure everyone has the same understanding of them.

  13. Megacarrot says

    Good posts.

    Ebay’s new policy’s have set us (sellers) up for failure they have been working on this for sometime trying to make us belive that these changes are needed for buyers and sellers on GREEDBAY.

    What this is is all roads on Ebay lead to PAYPAL they are setting us up to fall below the NEW requirements (DSR’s) to make you take paypal only because you are now a risky seller and to portect the buyer PAYPAL ONLY and they will hold your funds for 21 day as punishment while they make money on your money.

    The free shipping will figure into the FVF very nicely as they have already suggested doing so to get your DSR’s up WHAT A JOKE!!!!!!!

    1-MAY 08 BOYCOTTE VICTORIOUSLY :)

  14. Donnaval says

    I’ve been a steady Ebay seller for eight years. During those years I’ve amassed almost 4,000 positive feedbacks with a 99.9% positive rating. A few more feedbacks and the undeserved neg I got 2k feedbacks ago will roll off and I’ll be back to 100% positive. My buyers love my items and the service I give them. But now Ebay is telling me I’m not worthy to be a seller.

    All of Ebay’s price hikes, lack of service, and constant changes that cost me time and money were taken with a grain of salt. But now, to let a buyer WHO KNOWS IN ADVANCE what shipping they will pay to “ding” me and negatively impact my business–well, that’s it. Of my last 10 feedbacks, all were strong positives, almost all of them mentioned how pleased they were with shipping speed and the quality of packing, and yet my rolling shipping cost DSR fell from 4.8 to 4.5. Not only will I not get my powerseller discount; I am also in jeopardy of losing my powerseller status because buyers who KNEW what the shipping would be opted to give me 4’s or lower rather than 5’s.

    I could even live with not getting the discounts. But to lose the status and to be lost in the lower dregs due to Best Match disadvantage–that I cannot and will not accept.

    With the DSRs, Ebay has completely alienated me as a seller. And guess what–if I’m not selling there, I’m not buying there either.

    I used to keep 2k items in my store. That dropped to about 700 after the first draconian stores fees increases. That dropped to about 500 after the second round of store destruction. Now I have well under 100 items in the store and am seriously contemplating closing it at the end of the month.

    I have never filed a retaliatory negative against a buyer. Nor have I filed many dozens of negs against non-paying bidders who *should* have been negged. So it wasn’t sellers like me who were making buyers so unhappy with the feedback system.

    My Ebay business has been destroyed. So I’m outta here.

    Yeah, Ebay created a great buyer experience by getting rid of me.

  15. LD says

    Good post!
    I think all feedback system including DSR has to go bye-bye, its create nothing but a lot of noise and scary away customers even from best sellers. There should be only 2 categories for customer to rate 1. Your overall experience with transaction (which will replace feedback) and 2. Would you buy from this seller again? Period. Buyer can be honest without exposure to seller or afraid of feedback. Additional to it I think they should add “Reviews” page for each account – where everybody can express their opinion about products they bought and transaction experience without effecting reputation of seller and that every body can see what is was a problem and who is right. Yes, Seller must be able to respond to comments and comment s must be editable (by person who left them) if problem fixed. It has to be completely voluntarily, something like guest book I have on my website.
    I don’t know what kind of business minds come up with those changes on eBay – anyone who has a little of business sense at all will say this changes nothing but disaster and instead of fixing already existing problems in eBay system, they create complete disaster for buyers, for seller and for eBay it self… It’s loose-loose situation and nobody will benefit from it. Sellers is eBay bread and butter and eBay turns against them (again).. You will see by the end of the summer how many sellers will be gone… BTW buyers will be scary away too and will be hard to get them back – they will get scary out by increasing prices (what seller can do after those new fee come out), less choose and by bad feedback in each and every seller profile. Imagine you go to department store and there pickets upfront screaming about how they was dissatisfied… That very pure business practice. eBay have to realize when all best deal gone from eBay, eBay is DONE, will become nothing but another eCommerce department store…
    People go on eBay for “deals”… nothing else.. And nobody expect “excellent” customer service (I think best companies in US about 80% customer satisfactory rates), everybody expect acceptable customer service and good deals on eBay.. Because there is no way to satisfy every customer 100%, like in any retail business.. As example you saw all those post where people with Free Shipping getting 4.7-4.8 rate on shipping cost.. Just nature of buyers – right…
    Last thing I would say to eBay – Any business mind person before make changes or start their business will think what (and who) they target… In eBay case it’s completely unclear – who they target? Who will benefit from changes? Nobody… including eBay it self…

  16. JS says

    I seldom read the eBay message boards, but I have always wondered what percentage of buyers bother to leave DSR. I am a buyer, and I just can’t be bothered with leaving DSR because the categories seem a bit ridiculous, with too many choices (why 1-5 instead of just 1-3?). Maybe seller ratings are lower than you expect, because more buyers dissatisfied with one category will bother to leave DSR, than will satisfied buyers.

    Item as described? After I win and receive the item, I refuse to take time to go back to see whether the description and photo was a 5, a 4 or a 3. If the photo or description is not so good, I either don’t bid, or bid low, or if there is time I will ask.

    Communication? Most of the time, there is none (and no need for any), just the automated You Won and Here’s Your Invoice. So most of the time, this item simply Does Not Apply.

    Shipping time? Again, I can’t be bothered to look up when I paid, and if it was by PayPal or by Check, where the seller is located, and did they say we only ship on Mondays and Thursdays, and calculate if I should give a 5 or a 4 or very rarely a 3 (99.9 percent of my purchases fit here).

    S&H? If the S&H are within reason and stated in the listing, there’s nothing to rate, because I can adjust my bid accordingly or just not bid at all. However, I agree with PFTP’s comment above that if S&H is high, the buyer should get a well-packed delivery, and should give a low rating if it is otherwise. In that case even I would probably leave DSR.

  17. Sam says

    I think ebay is trying to make sellers offer free shipping and add the cost to the sale price. this bumps their comission from those sellers that dont realize the rating dont make a difference.

  18. says

    I strongly feel that ebay wasn’t truthful about its DSR implementation and had hidden agenda… which is purely to drive ebay profits from the sellers. I believe ebay is using buyer satisfaction as a metric when the statistical data would not support its claim that DSR categories is the solution. I agree with suggestion to replace S&H category or add a new categories “Would you buy again from this seller”” OR “Total procurement Cost”. I would even challenge ebay to give full refund of the FVF cost to buyers’ S&H cost in August and check if we all get improvement in the S&H category. Buyer need to be aware of this link: http://imamerchant.org/blog/looking-at-ebays-dsrs-i-am-concerned . This could help to inform or educate the buyers. ebay has not done anything to educate the buyers on DSR with fairness to all. The placing of S&H category has created a lot of MISTRUST on ebay. I have been struggling on this same issue and just found recently that I was not alone. Mostly likely, I am part of many, if not the majority ebay PowerSeller. On purpose? The unanimous thundering chorus from Powersellers on displeasure on DSR expressed at ebay live 2008 in Chicago still resonate in my ears. For months, I struggled keeping my trust on ebay’s truthfulness on DSR. Now, I know better.

  19. Becky says

    I have been reading a lot of opinions from sellers on eBay about the 5 star DSR ratings. I have been trying to think of a way to let buyers know exactly what the 5 star system is and how rating below 4 stars penalizes sellers. I don’t like the 5 star system at all. You can mail the same item the same way same communication to 5 customers and have 5 different ratings. Most customers do not give 5 stars on anything no matter how pleased they are with their purchase. They feel a 4 star is a great rating. How can we come up with a letter for our buyers explain this 5 star system . I have composed a letter and have been sending it out after I ship their item for the past week. I don’t know if it has helped or not. Most of my sales are international so my shipping time as far as the customer concerns will never be satisfactory. I would like to hear any ideas others might have in educating buyers what this 5 star system is and how it works. The following is a letter that I email after I ship a customers item.

    Hi, Want to thank you again for your purchase. I have mailed your item out today First Class Air Mail. When you receive your item and are happy with your purchase. It would be appreciated so very much if you could give me a 5 star rating with positive feedback. If you feel you can not give me a 5 star rating. Please email me with any problems or questions you might have with your purchase. Thank you again and have a great week.

  20. Jerry says

    I’m not going to reiterate all the complaints here as they have been said as well, if not better, than I could say. I would like to add though that a big part of the problem has to do with how ebay “presents” the rating system to the buyer. For example, under communications, when you hover over the 4 star, it shows satisfied. So any buyer would look at that and believe they are leaving a positive rating. However, get too many fours and ebay will shut you down for buyer dissatisfaction. So ebay tells the seller a 4 is “satisfied” and yet tells the seller that same 4 is a “dissatisfied”. Isn’t that fraud on their part? How can you tell the seller a rating is good but then penalize the seller for getting that rating. THAT is the problem.

  21. Steve says

    I have been having the same problems as everyone above. I have a 99.6 rating but my S&H DSR scores fell below and I feel as the above posts say that if a customer is leaving a 4 star score that is good enough but in fact that is failing in Ebay’s system, and to tell the buyer that 4 stars is satisfactory that is really false representation of the star rating system and is setting up all sellers to fail over time. If someone has a letter that they are sending out in there packaging that explains this to a customer that is getting results I wish they would share this with the other sellers. Good luck in the Ebay system war.

  22. Nina says

    I been sending a short letter out to all my customers. Explaining how the star system works. So far I’m still at a 4.9, it’s been almost a year now.

  23. Vicky says

    I think for the Shipping/Handling category it should say “Did seller charge actual costs?” or something to that effect. I use USPS, and the buyer pays what USPS charges on my items, so when they ding ME for this, its the Post Office who they have the beef with. I know they did this to do away with people profiting off Shipping/Handling charges but they in turn are hurting everyone else. Im a Powerseller and I keep getting jipped on my monthly discounts because my Shipping/Handling DSR keeps dipping low, and it is the international buyers often who ding it when I charge actual post office costs which they can see for themselves. I dont get it, some items are $30+ to ship overseas, I cant offer free shipping, sometimes the shipping is more then the item, but this is all stated up front via the calculator, if they didnt like the cost, then why buy it? Makes no sense to me.

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