eCommerce Summit Q&A: Part 1
By: Richard Brewer-Hay
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.