Is there a seller exodus from eBay?

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Creative Commons License photo credit: striatic

Yesterday, SellerDome’s blog noted that the number of inactive sellers in their list of top 100,000 eBay sellers had increased by more than 15%. SellerDome’s list ranks eBay sellers by feedback: sellers who are NARU, or who have received no feedback for the last 1, 6 or 12 months, made up 18.5% of the list on 25th May; now, they make up 21.3% of the list:

inactive
NARU 1mnth 6mnth 12mnth total
May 25, 2008

9,563 3,930 1,691 3,330 18,514
July 16, 2008 10,462 5,156 1,831 3,859 21,308
Change + 899
9.4%
+ 1,226
31.2%
+ 140
8.3%
+ 529
15.9%
+ 2,794
15.1%

I’ve heard a number of sellers make the claim recently that there is an “exodus” from the site: that sellers are leaving in droves, closing up shops and moving their sales to their own websites, eBay’s competitors and the Big River. Is this finally proof that they’re right? Are we losing good sellers like water through a colander?

I spoke to Rob from SellerDome to ask for more information on the NARU and inactive sellers: specifically, for those who appear to have stopped selling in the last six months, what was their feedback percentage.

I wanted to see if we could tell what was causing more recent casualties to stop selling: was it quitting in disgust at eBay’s policies, or something else? We limited the search to “sellers who are no longer registered or have received no feedback in the past month but have received feedback in the past six months”, so as to some once very-large sellers who have not sold anything on the site for a couple of years: glacierbaydvd at #19 is probably the best example of this.

Here’s what Rob found:

NARU or Inactive (according to criteria above)
Top 100 sellers: Avg Rating – 95.2% 5.0 Percentile *
Top 1K: Avg Rating – 96.4% 9.5 Percentile
Top 10K: Avg Rating – 97.4% 14.9 Percentile
Top 100K: Avg Rating – 98.14% 15.0 Percentile

* means 5% in the top 100 had lower feedback ratings and 95% higher.

This seems pretty conclusive. There were some serious feedback issues going on amongst these sellers. Remember, these are the people who have stopped selling within the last six months, since eBay brought in FVF discounts and Best Match ordering to promote good sellers, and all kinds of sanctions to discourage bad ones. Some have been NARUed, some undoubtedly suspended or disadvantaged off the site, and some have surely made the decision themselves to either quit eBay, or to start afresh with IDs that paid more attention to customer service.

But we can’t claim that these sellers were any great loss to eBay: an average score of 95.2% is astonishingly poor for an eBay seller, and when sellers performing so poorly were some of eBay’s biggest, most visible, discouraging dozens and hundreds of buyers from shopping again on eBay, it’s in all of our interests to get these people off the site.

29 Responses

  1. Regarding the point made elsewhere that this might be just down to 30 day suspensions, I don’t think that’s the explanation. The criterion for inclusion on the list is 30 days without receiving feedback: seller accounts on a temporary suspension can still receive feedback, and as we all know, buyers often take a while to leave their comments. If you’ve been selling thousands of items a month, your feedback keeps coming in even if you take a month off (I just had three weeks off for Live, and though my f/b total fell, it never stopped).

  2. If you’re going to conclude that these sellers aren’t “any great loss” to eBay, you have to take the research to its conclusion and show that their feedback level drops occurred prior to May 19th, when sellers were no longer allowed to leave negs and some buyers started negging sellers left and right – simply because they can.

    What were the feedback levels of these same sellers on May 1st vs. June 1st?

  3. Was it not the top one hundred that ebay were supposed to be talking with before all these changes started, and as one of them was also out of the top ten, then I do wonder what went wrong in those discussions that I believe two ebay employees stated had occurred. I believe one of them was the CEO.

    I am also not sure about your claim that they were possibly bad sellers, as another recent survey showed that only two of the top ten sellers were eligible for the 15% discount.

    and the feedback system is so messed up at the moment, and there are so many things that can damage your score. Such as have you checked you never had an dealings with any of those that are no longer registered, as you will have lost the feedback left by them.

    Ebay may know if they were good or bad sellers, but who would trust them enough to tell the truth.

  4. This makes sense given the soundbites over the past few months.
    Seems to tie in with Ebays recent results which forecast a slowdown, the effect of sellers leaving is starting to bite, looks as though its down to Ebays own actions rather than the economic slowdown.

  5. Dimes, these are people with thousands and tens of thousands of feedback. Sure, one or two buyers have taken advantage of the feedback changes to get a little neg happy: you’d need hundreds of them to be doing that to affect these sellers’ percentages like this. It isn’t happening.

  6. Since the whole stated purpose of the recent changes was to force the worse sellers off the site, I am so not surprised to see these figures.

    Taking a straw poll around the sale rooms, I have not found one dealer active on eBay who has moved away – it is still by far the easiest method to reach the US and Australian buyers who are not coming here on holiday for economy reasons, and we all take advantage of the differences between items that sell on eBay and those that work better in other markets.

    I am sure that some decent sellers have decided to leave for valid reasons of their own but I doubt very much that a huge number of sensible business people would calmly give up a market niche that easily.

    If the numbers are still showing a month on month increase this time in 6 months, it will probably be the right time to be worried. At the moment I would expect eBay management to be comfortable that their strategies are actually doing what it said on the tin.

  7. take this in context

    if most of us do a search on our own ids
    we are ranked in the top thousands and mostly in the top 10s of thousands,
    there are more sellers than lops on a dogs back
    ebay could see a few hundred thousand sellers disappear and not notice a thing

  8. #7 I think in fairness Norf those sellers who have left on a voluntairy basis or were pushed took an awful lot of listings with them, listing numbers is one of the key markers that the investors look at, maybe thats part of the reason for buy.com joining up.

    I am actually pleased to see this drop off in large sellers if some of those sellers were pushed, not because I want to see anyone fail more because its helped restore a little confidence in eBay for me, it confirms to me that eBay do not skew figures and bend the rules as much as I thought they did.

  9. less sellers the better as far as I am concerned
    buyers are what is important to me
    its about time ebay rewarded buyers
    the seller discount is poorly thought out in my opinion the pot
    should be shared with buyers,
    a discount bonus for reaching a certain feedback or buying level for buyers
    or a star system for buyers with some sort of bonus for good behaviour
    would be a good thing

  10. the problem is that you cannot tell how many of the inactive or even the naru ones just used another ID, as everyone that did is a seller that went nowhere.

  11. we get the discount on ebay because we sell, though selling is reward enough for us, the seller discount is beer money, a bung, pays for the gardener, or a round of drinks, I would still use ebay if it were not available,
    I would happily share it with buyers,in a star system marked by sellers,
    there need only be one star for buyers ,that being speed of payment,
    a discount amount paid into a buyers paypal account a once a month
    might work wonders,
    and at least having some means of expressing dissatisfaction with a buyer ,
    would do me the world of good

  12. 10
    good point
    we have at least 3 inactive ids that have a fair amount of feedback
    yet we still put every effort into selling on ebay

  13. eBay has been known for a place to shop for bargains — if eBay really forces the issue with customer service, sellers will have to charge higher prices — which, in turn, prices the seller out of the online market. If eBay is not careful, the very policies used to attract buyers could backfire.

    Using feedback percentage to determine a seller’s desirability on eBay is deceiving. You must factor in the average feedback percentage for a specific category and not analyze percentages as a whole. 95% may be the best feedback percentage possible if you compare with other sellers in the same category.

  14. 95% means that one in twenty customers left a negative feedback.

    I have to be honest and say that ANY business on or off eBay that has a 1:20 unsatisfied customer rate has to be doing something very very wrong. Especially as disgruntled customers are on the whole a lot more verbose about spreading the word compared to satisfied customers.

  15. #16 it is relevant to numbers though Chris. I could sell 20 baths a month for 4 months and recieve 100% positive, then sell 20 on the 5th month and recieve 19 positives and 1 neg, that makes me bad? more bad luck I would suggest.

    The whole system is skewed towards volume sellers, at least eBay seem to be finally catching some bigger fish who offer truly carp service.

    **boom boom**

  16. #17 The feedback percentage is calculated over a year – so 20 positives for four months and then 19 with one neg would leave you on 99%. Your scenario with 1:100 is a long way off 1:20 or 95%

  17. A customer is much more likely to leave a negative for a £300.00 bath if for some reason he is not happy with it than for a £1.99 pair of gardening gloves. The level of customer service required for selling different products is also variable. Peoples expectation levels can be very different and somtimes very unrealistic.

  18. Chris, the idea that a 95 FB rating as being poor is relative. It certainly is poor on eBay but not for the top 100 retailers on the web.

    Here are the numbers from the Forsee Customer Satisfaction Survey.

    Netflix is #1 at 86 on a 100 point scale
    Amazon has an 83 rating and Buy.com has a 72 rating.

    These surveys are much more detailed than Positive, Neutral, Negative and 4 DSRs

    If 95% of their customers give them a positive how is that considered a poor buying experience.

  19. #20 Yes without a doubt the level of customer service needed to sell some products is higher than for commodities – however I’d contend that a customer buying a two quid item is often just as likely to leave a negative as they can’t be bothered to contact the seller and recitify any problems due to the low value.

    #21 As you say Randy the surveys you’re talking about are much more detailed. However if you view a negative as a customer who would never under any circumstances purchase from the merchant again it makes more sense. Buyers will often answer fuller surveys highlighting where the service could have been better and the more detail the more opportunities to give feedback. Also the surveys take into account multiple purchases over a period of time from the same buyer. If however the surveys were limited to positive/neutral/negative for a single buying experience I’d expect them to be more inline with eBay feedback.

    As for 95% giving a positive – it’s not that that’s considered a poor buying experience. It’s the 1 in 20 that ended up being pissed off customers 😛

  20. > often just as likely to leave a negative
    > often answer fuller surveys highlighting

    In my business on eBay, I do not find either points to be true. But it may just be my category and my buyers. I can’t speak about eBay as a whole.

    > 1 in 20 that ended up being pissed off customers

    Take BargainLand as an example. Many of the feedback left for that business was due to products being sold as-is, or not as described. Buyer ends up leaving a negative for a $500 item s/he bought for $10. It ends up not working or it is not up to the buyer’s expectation. That is more a reflection of the product being sold and/or the buyer not having realistic expectation about potential outcomes. (What did you expect for $10?)

  21. 20 Sorry I have to disagree totally with that.

    The buyer with £300 invested is much more likely to take the time to try and sort out whatever the problem is than the guy with £1.99 gloves, Giving the seller a much better chance to sort the problem out.

  22. #16

    Don’t forget though, ebay is encouraging buyers to mark down sellers with their less than subtle messages and even using their payment processor to spam their customers with their propaganda.

    The sector is very important. I got a neg from a buyer a couple of weeks ago because he ordered a phone on Sunday received it Thursday, claimed it should have been next day delivery, the service offered was 1st Class Recorded.

    How many people here would get a neg for that in their category?

  23. #24

    If I was unhappy with a £300 purchase I would be more likely to leave negative feedback than if I was unhappy with a £1.99 purchase.

    A £300 purchase also has a greater chance of making me unhappy as my expectations will be much higher.

  24. #24 & #26 From my experience Board Surfer is correct. I get far less trouble when things go wrong from people who buy £100+ servers from me than those who in £10 TFT monitors or spares/repair laptops. I find that the people who spend more tend to be more professional and basically have more common sense than the bottom feeders who pay peanuts and expect the world.

    The last 2 negs I received (both removed due to non-communication from the buyer before leaving it) were for
    (i) Dell 17″ TFT with a cracked screen which sold for 99p – the neg complained of a cracked screen in comment
    (ii)Dell 15″ TFT which sold for £9.50 because it had a scrached screen, close up photo in auction. Buyer complained of scratehced to screen in comment.

    I have started to stop listing a lot at 99p start now to discourage bottom feeders who just see the auction title and 99p so place a bid not really expecting to win but just ‘playing at Ebay’. Even starting a with minimim prices of £4.99 and above for a lot of items has seen no complaints at all due to bidders not bothering to read auction descriptions in the last 3 weeks at a average of 65 sales a week.

  25. The Buyer/Seller relationship is really quite a complicated Synergy.In the specialist areas I am interested in,hobby sellers have virtually disappeared.Seemingly,in consequence a substantial proportion of specialist buyers disappeared with them. For the remainder of sellers, prices are down,sell through down even more. Lose that overall buzz of interest,then boredom sets in. Ebay in large areas seems to have lost that.
    In many ways,Ebay is not one vast market.Its thousands of niche markets,all with their different aspects. Its those that Ebay is in serious danger of losing.Individually small,en-masse very substantial. The specialist buyers,were often general buyers as well. But with no special interests forthem on Ebay any more,they will just go.Period.
    Your figures deal with the Powersellers. But its the myriad of exiting smaller sellers that might well be Ebay’s Achilles Heel.
    Boring is the death knell of any website. That is what Ebay is becoming.

  26. If you look at the the percentage increase overall for the cost to sell on eBay it has gone up, through no real cost increase for eBay, just representing a wider profit margin. I sell 20+ thousand on eBay per month and I have earned the 15% discount based upon feedback. 20% for a large seller is a fantasy as I have yet to see it achieved, maybe a few remote sellers. I agree with eBays desire to increase overall buyer satisfaction but they continue to implement policies that that are a detriment to the majority of sellers. For example, my feedback went from 99.8% to 99.3% with there new rating system and now down to 99.1% with the inability to leave feedback. With the new jacked up percentages, I would need to have the 20% rebate just to go back the begining of the year rates. Plus the new best match system takes too much time to reason why or where your auctions should be at any given time. The real cherry on the turd sundae however is there horrible customer service. They are the most rude incompetent arrogant SOBs I have ever encountered as part of a customer service department. Just today and the resason I am hear, venting frustration, is that I was talking to one of them (my rep never answers her phone) when after answering my question and cutting me off from my next question she states “I need to listen” in a very teacher to student condesending voice, as she rant about how great eBay is. Any other company I would go off, but since I have to work with them I bite my tongue and continue the conversation with a shaky voice because I want to choke them and cannot. I believe these to be the primary reasons for sellers to leave eBay, many with websites. The cases of horrible feedback are very few in the overall percentage. Also I think another reason that sellers are leaving is that as the dollar falls and many goods become more expensive, it becomes hard to raise prices on eBay due to the competition.

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