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Ebay's Controversial New(ish) Rating System Is Kicking Off Small Sellers


In January 2008, eBay instituted a new policy that effectively de-lists (a.k.a. shuts down) sellers whose Detailed Seller Rating (DSR) ratings fall below 4.3 on a 5 point scale. An eBayer's DSR is judged on four categories: whether the item is as described, communication is good, shipping time is reasonable, and shipping and handling charges are appropriate. A 5 is great, a 4 is reasonable and a 3 is neutral. Receiving a string of 4s can easily drop a rating below 4.3 and knock out the seller, who in most cases relies on eBay as their main source of income.

There have been grumbles since the policy was implemented in January, but according to a recent article in Business Week, the sellers are becoming increasingly vocal in their frustration. The tightening of the credit markets, drop in consumer spending, and higher fees have fueled the frustration. The biggest complaint centers on the shipping and handling charge, with which many of the smaller sellers are having a difficult time keeping costs down, resulting in 3s and 4s on the ratings. Larger operations such as actual brick and mortar retail stores can offer free shipping and still come out ahead.

Many of the sellers knocked off of eBay's sellers list are finding it extremely difficult to contest these expulsions as a result of eBay's canned e-mail responses and frustrating mazes of automated phone trees. The article cites examples of sellers who wake up one morning to find that access to their sellers' accounts is denied.

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eBay

Buyers Save Billions On eBay, Study Finds

Buyers Save Billions on eBay
Buyers save billions of dollars a year on eBay. You knew that, and you probably didn't need a pair of researchers from the University of Maryland to tell you that, either. But just in case there was any lingering doubt, a pair of statisticians who looked at financial data from 2003 and 2004 came up with the numbers $7 billion and $8.4 billion in consumer savings each of those two years, respectively. If the increase in saving continued increasing in a linear fashion, estimates put the 2007 eBay consumer savings at around $19 billion.

The consumer savings is actually a measure of what researchers call "consumer surplus," the difference between the most a buyer was willing to pay for a product or service and the actual ending price. On eBay winners, pay only the next increment over the second highest bidder, which keeps prices lower than in many other forms of auction.

From ZDNet

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