Monday, August 20, 2007

Sorry, More eBay T&S Ranting!

I just listened to an interview that Ina Steiner had with Matt Halprin, Vice President, Trust and Safety for eBay and I had to write another post, about the Trust and Safety debacle that is eBay. I would suggest every seller listen to this interview.

I agree, that there has been a problem with bad sellers on eBay and many of those bad transactions have driven buyers away from eBay but I disagree with the enforcement of this new policy. Philipp Justus stated in his announcement:

"The vast majority of eBay sellers deliver consistently positive experiences to buyers. However, a very small minority -- just 1% -- of sellers currently cause fully 35% of bad buying experiences. This small minority not only damage their own reputations, but also indirectly damage all of the good sellers who benefit from a strong and vital eBay marketplace. To address this problem, we have begun enforcing our Seller Non-Performance policy in stricter ways than in the past by considering a seller’s buyer dissatisfaction rate."

Now, I wasn't a math major in college, so bear with me here, but doesn't his statement mean that even after they clean up this 1% of bad sellers they are still going to continue to have 65% of all the bad buying experiences? Is this another example of "eBay Math"? I always thought that 65% was a larger percentage than 35%, was I wrong? So in reality this effort will only stop around a third of the bad buying experiences. So buyers will still be leaving the site because of bad buying experiences.

It is certainly easier to go after that 1%, even if there is collateral damage and you get a few dolphins caught in the nets, rather than try and tackle the 99%. This T&S initiative is a great PR move even though it accomplishes next to nothing in reality, the majority of bad buyer experiences will continue to happen. Maybe they are hoping that the sellers who remain, will be so fearful of the potential for restriction that they will get their act together. I really don't know.

Philipp Justus and Matt Halpern apologized for the way this policy was implemented and Matt admitted that they should have done a better job of communicating the policy enforcement. Look, I can be as forgiving as the next guy but waiting nearly 2 months to announce a policy crack down that had been in affect since before eBay Live is just plain wrong. They just got caught in a bad PR situation, so they had to apologize. I have heard this management team say "I'm sorry we should have a done a better job" more times than I can count in my years following eBay. If I had an employee who made that many mistakes I would have fired them long ago, yet eBay just wants sellers to accept this. We're sorry!

Tell that to the good seller (by any other definition except eBay's 1%) who has had his business crippled by the crackdown. eBay can handle a 2 day disruption on PayPal or Skype, they have $3.8 billion dollars in the bank a small seller who is reliant on eBay for their livelihood may miss a mortgage payment because of the restriction or possibly have to lay off an employee or two. I just don't think, "we're sorry" carries much wait.

eBay holds sellers to this new standard, yet they can't even communicate the policy effectively, nor is eBay's customer service even close to the standard they are requiring of sellers. Sellers have become great scape goats for the problems eBay is facing.

Fee's have risen, conversions have decreased and sales have flattened out or decreased. Sellers in many categories cannot afford to spend the money on customer service that is necessary to correct the problem. If eBay wanted the problem resolved they could have dealt with it years ago when sellers like myself, told them that customer service was our biggest challenge. The number of emails the average seller must handle on a daily basis is unreasonable. The same number of sales generates roughly 10% of the emails on Amazon as they do on eBay. This is a cost to eBay sellers and many have decided that it is better to take a neg rather than answer the incessant emails.

At Glacier Bay we chose to answer all of the emails and it directly affected our margins. As sales decreased my costs stayed the same so my choice's were to layoff CS people and deal with the negs or continue to spend the money so the customer experience wasn't damaged. For years eBay didn't invest in customer service because the ROI was not there. Do you think sellers don't face those same decisions?

I've rambled long enough so I will conclude with this:

This current non-performing seller policy will have a unintended consequence for eBay and the marketplace. Sellers who are worried about getting caught in the cross-hairs of T&S will withhold Feedback in an effort to prevent a neg or neutral. Negs for buyers will increase dramatically because a neutral is calculated the same as a negative in the new policy. Sellers will give buyers negatives if they receive a neutral because eBay considers a neutral as a negative buying experience. The problem is, 1 neg to a buyer may kill their feedback rating and send them off the site for good, in fact that is a metric that eBay acknowledges. Negs affect buyers more than sellers, so what will be the outcome? Sellers will continue to be hassled by eBay T&S living in fear that their business will be ruined, many will stop selling all together and some will move to other sites. All the while customers will still continue to have bad experiences on eBay and continue to leave. There is a real problem here but this crackdown is not the solution.

No comments: