Prospering as a Trading Assistant – eBay DSRs

David Brackin is an occasional guest writer on Tamebay and is a Director of Stuff U Sell, the UK’s leading eBay Trading Assistant. His business has sold over £5m of goods for clients – both private and business – and maintains Top Rated Seller status on eBay.

I read this week on AuctionBytes the story of how some eBay Trading Assistants (or consignment sellers as they are called in the US) had gone out of business as a result of the introduction of eBay’s Detailed Seller Ratings programme. They had fallen below the minimum selling standard and the sellers seem to be blaming everyone but themselves for their failure – their business model, their customers and the marketplace. In this article, I reflect on the consignment business model and how the DSR system represents a good way of polling buyer opinion. There is certainly more flexibility that eBay could show in their journey to become a better business partner, but many of these sellers had no one to blame but themselves.

The Trading Assistant Business

There is much to recommend the Trading Assistant business. For our clients, it’s not just about knowing how to use eBay or saving time, but research shows that as a result of our reputation, size, experience and pricing know-how we get higher prices in the marketplace than casual sellers. Many of our best clients are experienced eBay sellers who recognise the value in having someone else deal with the logistical and communications hassles. Furthermore, the service is anonymous so celebrities and Olympic Torch runners can sell without fear of negative publicity.

However, whilst it might seem like a simple business – and many start-up from home as we did – the fixed costs can be very high so sales commissions are easily swamped if you are too small. The sellers in the AuctionBytes article seem to be at a scale that they weren’t able to offer exceptional customer service to their buyers and to take the everyday rough-and- tumble of partial refunds and a bit of buyer goodwill that we all know are just the cost of doing business. I’d be embarrassed to admit that I dropped below minimum selling standards for the sake of a £30 refund.

Furthermore, despite multiple warnings from their buyers, they hadn’t figured out that they had to agree with their sellers to include postage in the sales price. Buyers are annoyed by separate postage (depends on category, but true in many) and care only about total cost of sale. By charging separately they made that hard to calculate and suffered their buyers’ wrath.

Detailed Seller Ratings

Since DSRs were introduced, there has been much to grumble about – buyers being unreasonable or uncaring, the anonymity meaning you can’t know which products (or buyers!) are causing problems, and the vast differences seen between categories – we get hit so much harder when we sell second-hand ladies fashion than brand new business supplies. For all these faults, it does provide some average insight into customers views, albeit with considerably random noise on top, and allows us to track improvements over time. For example, when we experimented with a new courier arrangement for some of our items, we were very quickly able to see that our delivery DSR (sorry, “dispatch time”) suffered and we moved away from the courier. Great feedback. Happier customers.

The biggest real gripe that sellers have, however, is how rigidly eBay interprets the DSRs and then uses them as carrot and stick. A strict rule-based system (now with added rule-based soft-landing zone) takes little account of trading conditions, category variations or other one-off random interferences. Even for large sellers the difference can be a handful of customers in a month – and who knows whether they carefully considered their feedback or left it in a bad mood after an argument with their spouse? They aren’t yet held to account, so what incentive is there for them to care?

Becoming a better business partner

There is no doubt that eBay is serious in its intention to become a better business partner. Over the past 5 years, I’ve seen considerable changes in the marketplace and great leaps towards openness and support of the seller community, and I get a genuine sense that the issue of protection from unreasonable buyers is getting some serious thought. Comments at the recent Catalyst event implied they are streets ahead of Amazon, and could build a real source of competitive advantage here.

However, it is still a constant fear for any seller that – despite being a good citizen – the marketplace will shut them out without discussion. Business investment thrives on confidence, and the rules-based culture is one of the biggest hurdles to building long-term businesses on eBay. When I speak to investors about giving us money to expand our eBay business, I explain the risk by comparing it with sharing a bed with a gorilla – you never know if they are going to roll over and crush you in their sleep.

Giving increased power to the Customer Service and Account Management teams and releasing them from the rigidity of Trust & Safety would be a great next step. It would allow sellers to commit more to the marketplace and improvement to flourish within a trusted relationship. It’s too late for the sellers mentioned in the article, but for those who are left, it’s time for the conversation to move on from jumping through hoops to selling more and making customers happy.