Friday, April 11, 2008

The Game is On! eBay Sellers Game Best Match!

As Scot Wingo points out in his post yesterday, " ... it only took about a month, but now we're hearing from sellers that are upset that other sellers are significantly gaming the system."

Scott goes into great detail on how this gaming is being accomplished in his post and I would suggest you read it. I'm just going to discuss the concept of "gaming" in this post.

First off, it was clear from the beginning, that sellers would try to find a way to take advantage of eBay's Best Match. We call this "gaming" which is a nicer term than calling it "cheating". Sellers have been doing it forever.
  • Lowest price is the sort order with SIF listings so sellers go for 1 cent BIN with $25 S&H
  • Determining when you want to end a listing, in order to give your item the best opportunity for a sale is "gaming" the system.
  • When ending soonest was the sort order, sellers use the "extender" program (since banned) to keep their items on the front page.
  • Multiple IDs and multiple stores are a form of "gaming".
  • Now with Best Match, sellers add multiple keywords to their titles to get advantage in search. Now the following listing title: New, New, New, New, New, Wii, 5, 5, 5, 5 New New, carries more weight than New Nintendo Wii with 5 Game Bundle. Just try this search on eBay and you will see what I mean.

In a competitive environment, gaming the system is what every sellers does. Every seller is trying to find a way to get in the "buy box" and stay there, until they get a sale. Most "gaming" strategies aren't as blatant as the one Scot discusses though. Why are some called cheating and others accepted? Its all perception.

If you time your listings so they will end when the most buyers are on the site that is just called being smart, but if you add 5 "New's" to your title that is called cheating.

eBay isn't a Utopian society where everybody does the right thing. When it comes to making money, sellers will do what it takes.

It amazes me, that with all of the brainpower behind "Best Match" they couldn't think this particular problem through before they launched.

If eBay corrects the Best Match Algorithm to fix this particular problem, sellers will come up with a new way to "game" the system -- it is what they do and it becomes almost a sport for them. When there is so much competition for the same items you have to find a way to have your item stand out.

Update: It appears that Best Match is in the shop for repairs. After the problem with repeated keywords was identified they apparently have shutdown Best Match until that problem is fixed. The default sort still says Best Match but every search I've done sorts items by ending soonest. I'll post any additional info that I hear.

This will not be the last time we hear about "gaming" eBay search results, unless you can find a way to remove the human desire to "win".

Buyers "game" the system just as much as sellers do. Hell, it isn't much different than sniping an auction.

So how do we fix this?

  1. Use the Google model. Free, organic listings and have sellers pay for position.
  2. Go back to "Ending Soonest" and just sort items by Best Match within that same 30 minute window.
  3. Understand that sellers will "game" the system and just wait until eBay closes the loophole. That is pretty much what we have today.

What do you think? I'd love to hear your opinions. I like option #2.

That's just my 12%

16 comments:

Anonymous said...

Shouldn't this be a violation of the Keyword Spamming Policy? Why not just report the seller and let eBay violate them? If they continue they will be NARU'd.

Randy Smythe said...

Here is eBay's Keyword Spamming Policy.

"Keyword spamming is not permitted on eBay. Keyword spamming occurs when sellers place brand names or other inappropriate keywords in a title, subtitle, item specifics or description for the purpose of gaining attention or diverting members to a listing. The text sellers place in listings must be directly relevant to the item being sold."

"New" is not innapropriate, listing it 5 times is but that way the policy is worded leave wiggle room"

The problem is that eBay opens these holes and then, like in the case of Digital Delivery Items, they have to overreact to fix them.

oldschool said...

Randy, Great post, but I disagree with one of your points:

"Determining when you want to end a listing, in order to give your item the best opportunity for a sale is "gaming" the system".

Ebay themselves have always encouraged sellers to be aware of optimal listing days/times. Their own seller tools, such as Blackthorne, have always included optional features (at a fee) allowing you to begin/end your auction at a desired time and date. Ebay sanctions and recommends this as a practice.

On the other hand, they've always been against sellers overcharging for shipping-at least on public record. It just wasn't until 2008 that they decided to really do anything about it in a big way by enforcing policy (dsrs, the 5% neutral/negative rules, etc).

Still, I get your point about perception. One sellers ethics are just another sellers folly. For some sellers, Priority shipping means just that, USPS Priority mail rate shipping and delivery time. For other sellers, "expidited shipping", means a lie masked as a way to gleam another dollar out of a buyer for the "upgrade". And so it goes...

Keep up the great writing!

Anonymous said...

What a bunch of shi_, shi_, shi_, shit_, shi-!

Suzanne Wells - The eBay Coach said...

So do all the law abiding eBay sellers go on a rampage reporting these listings with .01 BIN and $25 shipping? Wouldn't that fall under the category of "excessive shipping?" And could we even make an impact if we all team up and report as many of these types of listings as possible? '

Seems like there must be a way for the legit sellers to drive the cheaters out.

Then again, the crooks are always 2steps ahead figuring out ways to beat the system and be better crooks.

Randy Smythe said...

Anonymous, thanks for your contribution to this discussion. You will notice your excessive use of the keyword Shi_ does not advantage you in comments.

Suzanne,

Amazon does not have these problems. eBay relies on the marketplace to self-police; when that is truly their job.

eBay creates the holes that the bad sellers use to game the system.

Amazon doesn't have these same problems.

Old School,

You certainly understood my point. Perception is the driving force here.

There are levels of gaming that are excepted by the majority and most people would not call that gaming but strategy, while other levels of gaming are considered wrong by the majority like Keyword Spamming, Fee Avoidance, etc. Mostly becasue the host (eBay) says they are wrong.

One sellers strategy is another sellers game.

My point, as I mentioned to Suzanne, is that eBay faciliates the gaming and requires that sellers police it.

Thanks you all for your comments, even Anonymous who made me chuckle.

Cliff said...

It's wonderful for search results, but I know there are buyers such as me that see "NEW NEW NEW ..." and L@@K as synonyms for "CRAP" and just keep on scrolling. Hopefully it's the majority.

All my searches are still set for "Newest" and "Ending First" -- if I perform a search that defaults to "Best Match" I select one of the other two options and do it again. So my vote would be for "Ending First"

Anonymous said...

Randy,

Looks like the big secret is out.

I honestly think I was the first one to discover this.

After I did this in the Wii area about 2 sundays ago it spread like wildfilre and variations on NEW NEW came out.

Kudos to me! haha

Now it looks like ebay is tweaking best match. Notice how everything looks like it is very close to time ending soonest...

You know who this is!

Anonymous said...

And just for the record I figured this out about 2 days after best match came out.

Maybe ebay should hire me as a consultant!

:)

Anonymous said...

I'd like to respond to the Keyword Spamming message.

"Keyword spamming is not permitted on eBay. Keyword spamming occurs when sellers place brand names or other inappropriate keywords in a title, subtitle, item specifics or description for the purpose of gaining attention or diverting members to a listing. The text sellers place in listings must be directly relevant to the item being sold."

In this case, most of the Wii bundles have 3-4 items in there. So listing NEW NEW NEW could be interpreted as describing each item.

Ebay could say that repeating the keyword does try to divert the attention of the buyers to their listing, however if the keywords are 'relevant' to the listing then I doubt they could say that it violates the policy. The seller might argue that they are merely describing the product and emphasizing the fact that the items for sale are in fact NEW.

Unfortunately there is no neutral party that decides these types of situations as there would be in a court of law, so I draw comparisons between ebay land and the IRS. As soon as someone finds a loophole, they enact legislation (ie Ebay Policy changes) to close it up!

Tony P. said...

Not that I have a big problem with this (afterall, it's a lesson for ebay), but those listings could be nixed by ebay using a precedent they set some time ago.

That "extender" program, and sellers just doing it manually, was banned by way of the Keyword Spamming Policy. That snippet, "...for the purpose of gaining attention..." is all the reason that ebay needs.

I saw a post about this Gaming Method on the Search board on April 2nd. Too bad ebay doesn't really read the boards, they might just learn a thing or two.

UPDATE: back to the drawing board. Gupta would be so proud!

Randy Smythe said...

Tony, the funny thing is, I was told about it during the first week of March and I didn't blog about it because I wanted to see how long it would take eBay to catch it.

So from the first week of March to the first week of April it was just working fine for the few people using it then the forum post in April and more people used it, then Wingo blogs about it and ebay finally figures out they have a problem so they put Best Match in the shop.

I probably could have blogged about back in March and not had much impact but Wingo has some juice.

timagainstbay said...

It should be clear, I am a wholesaler and not a good writer or a stock expert, but I have a first hand inside look having been a powerseller almost from e bay start, for over 10 years, 1.7 million per year sales and account for $156,000 paid to e bay per year for seller fees, this is the bases in which e bay shows profit or loss in a great way for there core business, this does not account for paypal fees charged, seller manager pro, e bay stores. Buyers and sellers are leaving e bay, this can be proved by http://www.sellerdome.com
It is interesting how the 1500 employee lay off received so much attention, however, OVER 10% of total powersellers were laid off/suspended because of flawed aggressive policy poorly implemented has not had a placement. This is proved by:

http://blog.sellerdome.com/?p=16

This study shows that between 15k-30K e bay powersellers who account for $3000-$20,000 in seller fees paid to e bay each month from sellers. This is the only company separating itself from its long time customers, many, like myself, who has been with the company fatefully since inception and made it a community before new management. This seems a larger story than a simple layoff of e bay employees. Ebay saves money by laying off paid employees, but e bays profit takes a hit by getting rid of partners who contribute to e bay profit. For example: 20,000 powersellers/partners laid off/suspended that account for an average of $5,000 per month seller fees = $100,000,000 each month in seller fees not received by e bay. That is $1,200,000,000 per year in revenue given up for aggressively flawed policy by current management. Figure that on 20% margin and facing the headwinds of a slowed economy. The idea current ebay management had was by getting rid of 10% of its selling partners was going drive back 32% of its buyers, however, that has clearly not been the case, because the policy change was flawed and implemented with such aggression over a short period of time, 6 months total, 3 months aggressively.

Ebay seems to have driven away buyers by this and the new search method that sellers or buyers don't like with no concern of management. The company has managed to drive its investors away in the same motion as stock prices show a drop since new management put in place 6 months ago, before market crash. Ebay management charged its sellers/partners for decline in its core business and seems not to have taken into account the increased competition of walmart, best buy, circuit city and many others putting marketing dollars into the online sector of business. Ebay pushing away its partners, sellers and buyers, is only going to make profit softer and push away investors. With 70% more competitors in the market e bay only dropped 30% seems a strong market hold for e bay and a reason to support its partners in a currently working policy rather than place blame partners and will prove to decline its future market share as pointed out by many market analysis and Powersellers.
Ebay, through the wild west style new management, took a look at itself and realized it had a drop in the number of sellers buying on its site. It decided it was because of bad "buyer experience" and immediately, it seems without full thought of backfire, decided it was the sellers fault. In some cases, this may be true, but it is most likely because of a misunderstanding or lack of communication between ebay, the seller and buyer. If e bay would set up a system so that all involved understood the agreement that was fair for all, then buyer satisfaction would be a great number and managements approval ratings would not be in the 20% range "22% “Approve", see the link below and see what employees are saying about CEO John J. Donahoe:
http://www.glassdoor.com/Reviews/eBay-Reviews-E7853.htm to see Mr. Donahoe's DSR rating.
Note the 168 Reviews under the rating.

This is the only CEO that I know of that has its partners/buyers/sellers asking for them to step down:
http://www.petitiononline.com/jdonohoe/petition.html

Notice that the former CEO WHITMAN MARGARET sold many shares before ebay implemented flawed policy:
http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=EBAY

It is doubtful that the sellers, as well as buyers, who make up the success or frailer of the core business rating of John J. Donahoe would be that high. It should be noted that there was a lay off, but this rating was only 1% more well before the layoff. All you have to do is see the off e bay blogs of e bay sellers and buyers to know how they fell now. I say "off ebay" because e bay understandably deletes any blog on there site where people speak out.

Instead of working within the community, that once believed that "people are basically good", took on a policy that made its tight net community fell like "criminals under big brother" and strong feelings of dislike for the symbol that was once regarded by its employees, buyers and sellers. Ebay has aggressively pushed away its partners will prove to decline its future market share and a relationship that may go un repaired when new management is called upon. When the culture was "people are basically good" employees at e bay were chronic buyers on e bay, now that has changed. It should also be noted that the sellers they suspended are also big buyers on e bay generally.
Ebay has withstood the .com storm because of a superior system and its ability to hold steady to the working core business policy. Its customers fell that is no longer the case and many companies like bonanzle.com and OLA.COM (onlineauction.com) and Ebid.net are rushing to try to meet seller and buyer demands that ebay seems unwilling to meet. Many small auction sites have tried to compete in the past but been successful in driving traffic. Now a once complacent audience of e bay buyers and sellers are seeing the changes and the likely hood they are being driven away through aggressive, unfair, flawed policy changes and are taking note to change to someone with the old values that made ebay a community that worked. You can see from the link below the demand that is being driven away from e bay by Bonanzle, Ebid.net, onlineauction.com Ubid.com that would have been unheard of 6 months ago.
http://www.quantcast.com/bonanzle.com
http://www.quantcast.com/ebid.net
http://www.quantcast.com/ubid.com
http://www.quantcast.com/shopify.com
Notice the chart of hits per month going up on these auction sites. Now look at e bays chart, it shows the amount of volume coming to the site is declining:
http://www.quantcast.com/ebay.com

This is a small amount of buyers and sellers compared to e bay, but it does show a market who is hungry to meet the demand of current buyers and sellers, and what is maybe most important that buyers and sellers are finding the ability for change. A safe sales platform that is demanded, products that are truly less for buyers, not just advertised as less, but are less for now because sellers are driving buyers to the site.
When e bay was a "venue", now it is felt by many of its sellers that it acts as an employer or landlord or big brother, by design of new policy, it was profitable for sellers and a great value for buyers. Sellers drove traffic to the site because buyers knew they could get many of the items for a large percentage below retail, at or below wholesale. Seller fees, total have gone up, $0.35 listings are great, but the back end is higher making the total successful sale higher for the buyer and then pushed to the customer. All the discounts given now with the new promotion is good marketing, but those discounts/profit must come from somewhere, it is a known fact that nothing is free. I suspect the seller will foot the bill for this discount, this will cause price to go up or profit to go down. Profit for sellers once offering wholesale prices. This will mean to raise prices or move to a site like OLA.COM or Ebid.net that does not charge listing or final value fee. This will make that seller profitable and give its buyer a low price.
E bay is being accused of being a follower in the last few months and is trying to make itself like Amazon and other .com retailers. Ebay sellers who use Amazon report little to no sales. E bay has a niche (wholesale products) and Amazon has a niche (books, CDs with unmatched distribution etc) and both worked independently of each other, this is why Ebay sellers are not successful on Amazon and Amazon sellers are not successful using ebay. New ebay management, and even investors, have had a hard time realizing Amazon is a different market plan. Many e bay sellers are leaving to do Amazon but it is feared this will not prove successful for them. The e bay system worked and most were satisfied, buyers and sellers could realize other bad buyers or sellers. I sold $30,000 on Amazon per year with my 82 unique product catalog, but sold 1.7 m on ebay with the same catalog. It would be much different if the items were not $100+, if they were books, cds then Amazon would by far be superior.
Buyers and sellers are not happy anymore and the numbers will continue to show as long as this management stays. Economy will play a roll, that is why ebay can't afford to gamble with management that has proven to drive its partners, sellers and buyers, away. The company is large enough it will be around for a long time, maybe not in the online auction sector effectively as it was before, but it is still a mystery to many who use or used to use the site why this management has been allowed to make this aggressive of a change. If this is where they wanted to go, it would takes years to change a company this size effectively, it can't be done in 6 months times and certainty not given a slow in the economy.
Things are not happy under new management/John Donahoe management has made no one happy, employees, sellers or buyers or its investors. It has been a 6 month meltdown since new management fumbled a working system.
I talked to the owner of onlineauction.com 1-800-900-2828, Rowen Grisham, a previous e bay powerseller who seen improper change coming long before many sellers and buyers realized. He said he had seen a flood of sellers and buyers calling to learn about the site in the last 4 months. Rowen Grishamw says they are about to roll out a goggle search program that will make it more visible. This is just one example of where e bay buyer and seller base is going. Grisham seems to want to supply its sellers and buyers with a fair service, as when the ebay site was born and acted as a venue rather than an employer. Small companies that are hungry and taking advantage of a situation where ebay is not satisfying its demand.
Anyone considering investing or putting time into future sales may want to take a look at the aggressive, flawed policy’s they have put in place, there are little to no direct policy as there has been. Sellers, buyers and investors wouldn't be leaving if there was any good reason to stay.
Some of E bay's management ideas were good, however, has done a poor job or implementing the new changes and communicating to its buyers, sellers only after a few months of effect, some loosing there e bay business because of improper, unmonitored data, is still learning and it seems no one knows the answers even at the top account managers level. Its buyers do not realize that the DSR DETAILED SELLER RATING, the 5 stars under the feedback rating is not based on a 100 point scale like every other system in the free world. For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With e bay, 4,5 is average and 5 is good, I am glad they didn't have my math teachers in Collage. So many times buyers rate a 3 when they don't realize they are giving the seller a unacceptable rating that could potentially suspend his/her account from e bay as so many has been suspended in the last 3 months because of improper data that has been now used as the bible of e bay to rate seller performance. It should also be noted that a flaw in the data of the 5 star DSR is that if a customer is happy, they fell that leaving positive feedback served its purpose and they have caused a positive vote to the seller, e bay has not educated the buyer, so they do not leave a star rating at all, and are not required to and a large % do not, but leave a positive feedback as it is not required. But the buyer who is mad and is leaving hasty feedback will be more than motivated to leave a 1 or 2 for all stars. For this reason, good sellers offering great service and products are being suspended from e bay by record numbers, this cuts the life cord of the seller as well as core business at e bay and the reason buyers come to the site and investors invest in the company.

Ebay may have ruined their market flair for both buyers and sellers forever. Too many restricting rule changes, increased charges, paypal demands, seller ratings. This has ultimately destroyed their bottom line.
Many sellers, buyers and investors alike have a dedicated special interest and hope management changes and ebay will turn themselves around, but it is going to take some quick and correct policy change back to the system that worked to undo what has been done in what would be considered by many as well as a powerseller account manager in a telephone conversation said that this is "the most aggressive change e bay has ever done" it is costing sellers there business and driving buyers away from the site. The Best Match search is fatally flawed and $0.35 listings are not going to fix that.

Sellers of the unique items that made eBay famous (and who paid listing fees) are leaving in record numbers, while eBay brokers deals with corporate sellers of new stuff you can get anywhere who don't pay listing fees deteriorate the profits. And their buyers are following them. Watch the Q4 and Q1 09 figures. A company of this size can keep up appearances for some time, but its customers, its customers customers, that is sellers and buyers, are speaking up and cannot be ignored in the long term, the leader of these policy's are and continue to drive away the core business of e bay and investors are taking notice.

E bay bought Bill Me Later, I would have been surprised just 6 months ago, but I am unhappy to report that I am not at this time, the reason is this management has taken down the tread that holds e bay together as can be seen by its buyers and sellers everywhere complaining about the flawed aggressive policies that have taken place over the last few months, maybe you have heard some of them or are one of them. Every comment citing that the previous system was not broken. E bay has had community and trust, this 13 year trust has been violated and has failed both sellers and buyers in just a few months of unfair, faulty policy change that has taken a ship this size and turned it so fast that it is out of control and is facing a challenge to bring the ship back to course as it was before in the core business, although still ignored by management at this time, this is just in the core business, this shows the danger of a lateral move like credit right now. Take into account there couldn't be worse timing as the world economy will not view this favorably given recent events. This policy change was over a short aggressive period, but the negative impact will make it difficult to navigate back in position, if this venture is not successful, it will be even worse for ebay, its investors, and the management that follows. The core business has taken a great hit world wide, now it is committed to a market that is new. A new market during the time when its core business is in jeopardy due to flawed policy and a slowed economy with management proven only to drive away customers. This will prove a challenge that may take years to repair relationships of its sellers and buyers when it has been realized by investors concerned on top of unpopular credit service. Migration back to the system with effective proven 12-15 record, built by previous management over 12-15 years, seems to be the only way to save the future profits and stability the company once enjoyed.

It could prove to be a successful venture, but e bay current management wants its investors to trust it in a huge risk buy, when the investors are clearly concerned and most can see that e bay can not run its core business in a way that is satisfying to its customers, causing them to leave, look for other suppliers that will eventually be able to meet demands of the once complacent sellers and buyers. Employees, buyers, sellers are all saying the same thing, why is e bay letting this happen. Nothing to gain, much to loose.
It would be hard for anyone with basic knowledge of the problems with recent policy of the core business to buy this, having been a seller and buyer for 10 years, it makes it even harder to buy. Why would smart investors believe they will run it any different than there core auction business.

I can say, I am happy to report my family, who bought stock when they seen my success on e bay back in the late 90s, sold there stock when I explained the new managements flawed, unfair, and aggressive policy handed down. The stock has followed since this and many are betting with there dollars fell it will continue to fall. Maybe Jim Cramer, hyper as he is, has a point when he said he could not get behind the company, and that someone should buy the company "and put them out of their misery." It is hard to argue with him, stock sold back in march, when these policies were being talked about, not yet implemented aggressively, sold ebay seems to be the smart move. Stock was $30-$32 per share at that time, March 2008 new management took over, it dropped every since as can be tracked from any stock quote chart. Yes, the economy took the abrupt hit, stock price had already plummeted by 1/3, $19-$22 per share, before it happened that our country was in trouble from bad credit/debt. Some say they wouldn't want to touch this a credit market at this time. I would also not want to answer to shareholders when they learn what long time sellers and buyers have seen in the past few months.

I think this report on NYtimes has some good in site of the problems facing the company with the current buy:http://bits.blogs.nytimes.com/2008/10/06/ebay-plays-warren-buffett-buys-online-lender/#comment-55807
Maybe enough people will sign to make it worthwhile?
http://www.petitiononline.com/jdonohoe/petition.html
Let me say, I LOVE E BAY, it is just sellers and buyers don't like what new management has done to its strong culture. We have a vested interest and love for the old e bay culture.

Just one of the PAST buyers and sellers temporarily driven away by new management, it will be interesting to see what the new management that is suspected to come will do to the culture. Hopefully Auctionbytes is right in looking for a replacement for JD and you can see the 150+ comments below the article shows not one good thing to say about this management http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2008/10/1224177689.html

Good thing for golden parachutes I guess, maybe that will soften the fall?

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