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Digesting the changes on eBay Without Getting Indigestion. What’s behind the 4.3 DSR Policy?

August 21st, 2008 by Skip McGrath

Forget the Tums and the Pepcid AC. The new Seller Standard 4.3 DSR need not give you heartburn.

I had the opportunity to spend most of last Tuesday on the eBay campus in San Jose where eBay offered in depth briefings to a small group of bloggers and newsletter writers. It was a very interesting day. The eBay folks were very gracious and accommodating and all of the execs we met with were open and forthcoming.  I never had the feeling we were being spun or “sold” something. (No –I didn’t drink any Kool Aid before the meeting).

eBay doesn’t often do this sort of thing, but the announcements this week were a lot to absorb –and unlike previous announcements that come one or two at a time, there were announcements in five different areas this time. So the trick is to digest the info without getting indigestion.

Whenever eBay announces policy changes there is always a lot of noise and thrashing around. And I am the first to admit that I have been guilty of adding to that at times. We are all very passionate about our eBay businesses and even mainstream folks react in a wary or suspicious fashion to each announcement. And of course there is the fringe; eBay members who put on their aluminum foil helmets and look for black helicopters before logging into their eBay account. For some reason, although these folks are a tiny minority –they often have the loudest voices on the boards.

The announcements from eBay this week covered five key areas: Shipping, Pricing, Search, Electronic Checkout and new Seller Standards.  Each of the five areas have some elements that some find controversial –and in reading blog post and the eBay message boards I can tell there is some out and out misreading and misunderstandings of the various policies.  So my goal is to put the announcements in perspective and try and correct some of the misinformation that is out there.

The totality of the announcement is just too much to cover in one blog, so I have decided to take the one-a-day vitamin approach.  So today let’s take a look at the one that seems to be causing the most angst with sellers: The new 4.3 Minimum DSR requirement. Tomorrow I will tackle the pricing.

Here is the actual text of the announcement regarding seller standards:

  • New seller standards: Minimum 4.3 on all DSRs: The vast majority of eBay sellers—some 96%—are well above this threshold. To protect the interests of all these sellers, starting November 1 we’ll no longer allow the few who don’t deliver on basic standards of customer satisfaction to sell on eBay. Sellers will be evaluated on the past 30 days of DSRs. Sellers who’ve received less than ten DSRs in the past 30 days will be evaluated on their DSRs over the last 12 months. Sellers with no DSRs will still be allowed to list. See the FAQs for more details.

Now let’s figure out what this means.

First of all the new requirement will not go into effect until November 1st –more than two months from now. So there is plenty of time to work on your DSRs. Secondly, this new rule will only affect a very small percentage of sellers. When I was at eBay I asked what the percentage was and they would not give an exact answer but said it is currently below 4% of all sellers on eBay would be affected.  Given this warning and two months to change their ways, I suspect that by November 1st, the percentage will be even lower.  When all is said and done, I suspect less than 2% of all sellers could be affected by this policy.

When you first look at the announcement, you may think that if you fall below 4.3 on one of your DSR scores that you will be kicked off of eBay. This is not the case. Sellers with less than 10 DSRs in the past 30 days will be evaluated on their performance over the past 12 months.  If you fall below the magic 4.3 the following things will happen:

Sellers not meeting the standards will not be allowed to list new items, but will not be suspended. Sellers will not be able to list new items as long as their DSRs are below 4.3. Blocked sellers may list items again once their DSRs meet or exceed the threshold. Blocked sellers can accomplish this in the following ways:

  • When you are blocked from listing, eBay will not cancel your other listings. They will continue to run. So be sure and complete current transactions successfully. If those listings result in a higher DSR score, that could solve the problem by getting you back above the threshold.
  • If 12-month DSRs are above the minimum standard, wait for low DSRs over the last 30 days to roll off until the 30-day DSRs are above the threshold or a full 30-days have passed. Depending on your longer-term scores this wait could be a few days or longer.
  • If 12-month DSRs are below the threshold, wait until low DSRs to roll off. This will most likely take the full 30 days.

What about new sellers? New sellers are evaluated on a 12 month rolling average. But as a new or small seller, you want to be very-very careful as statistically it is easier for one or two bad hits (a one or two star rating) to negatively impact your score. eBay has an excellent page that lays out Best Practices for sellers to keep their DSR scores high.

If you are a low volume lister and you want to stay in the game, then you should follow the best practices and really deliver good value, service and communications to your customers. Of course everyone should do this –not only small or low volume sellers, it’s just that low volume sellers can be a bit more at risk statistically if you screw up a shipment or run into a wacky buyer.

This may shock some of my readers, but I happen to agree with this policy. If eBay has 700,000 active sellers, four percent of sellers who are giving buyers a poor experience works out to 28,000 sellers.  That is a lot of sellers and a lot more bad experiences. This affects all of us who are working to build a professional business.

eBay has a lot of survey data that shows that poor sellers have driven business away from the platform.  And there is plenty of anecdotal support.  I personally often meet people who ask what I do. When I tell them I am an eBay seller, I often get a story about a bad experience they had on eBay. Sometimes its nothing more than something that took forever to get to them or something that was poorly packed and shipped but AI often hear stories from people who were out and out mislead or defrauded. When a few sellers fail to deliver a consistent level of value and service it hurts all of us who do.

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