Shoestring Theory

Currently documenting the house that is eating our lives, we will return to regularly scheduled programming in a couple of more months

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Of carrots and sticks

February 6, 2008 at 8:20 pm by thetheorist

Carrot vs. Stick
Sunday, Sunday, Sunday! See the epic battle of carrot versus stick! One time only! You’ll pay for the entire seat, but only need the edge! (Bat and Carrot from OCAL)

Okay, eventually we’re going to finish slogging through all the changes. Today we’ll tackle the new PowerSeller reward system. There are basically two components to this, fee reduction and greater protection.

PowerSeller discounts on Final Value Fees (or Transaction Services Fees)

-DSRs of 4.6 or more (based on the last 30 days): 5% Final Value Fee discount

-DSRs of 4.8 or more (based on the last 30 days): 15% Final Value Fee discount

For years I’ve thought PowerSellers deserved additional rewards for maintaining their status. So, while this should be a “WooHoo!” type moment for PowerSellers, this won’t offset the fee increase some of us will be seeing. Also, I want to see numbers about how many PowerSellers actually maintain that DSR of 4.8 in every category. Some of the best sellers I know carry a 4.7 or 4.6 in at least one category. There’s also the question of exactly what is the carrot for a seller. Especially in shipping fees, lowering shipping cost to attain a 4.8 in that category could end up costing sellers far more than the fee savings.

Expanded and Extended Unpaid Item (UPI) Protection Program

-Expanding to single-item fixed price listings

-Extending refund of Feature Fees permanently

eBay is still not automatically refunding list fees and the new feature fee refund only applies to PowerSellers. If a buyer doesn’t pay, all fees should be refunded. Not just for PowerSellers, for everyone. Unfortunately, unpaid items still represent profit for eBay while they represent loss of time and money for sellers.

Expanded seller protection from PayPal beginning February 2008

-Protection for any shipping address, not just a confirmed address

-Unlimited annual coverage, not just $5,000 per year

-Global coverage, extended to 190 countries around the world

Color me skeptical on this one until I see it in action. Anecdotal evidence I’ve heard from other sellers indicates that buyers win disputes the vast majority of the time. Unfortunately, I don’t know of any hard evidence to prove the system does or doesn’t work. This makes business sense for eBay and PayPal. Many sellers need eBay and losing the occasional dispute might piss them off, but too much of their livelihood is tied up in each service to leave. A single lost dispute by a buyer could easily drive that customer away forever. I would like to see some more openness about how this system works. Provide statistics about the current seller protection program, including the number of sellers who have be reimbursed and the total amount given back to sellers. This would give everyone more (or a lot less) confidence in the program.

All of the PowerSeller rewards strike me as trying to divert attention away from the negative changes. Few people will qualify for the big fee discount no matter how good their service and shipping prices are. eBay still keeps some of the fees sellers pay when an item isn’t paid for (and a lot more from non-PowerSellers). And they will expand a system almost no one qualifies for in the first place. It all looks good on paper, but falls flat in real life.

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