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EcommerceBytes-NewsFlash, Number 2815 - May 30, 2012 - ISSN 1539-5065    1 of 3

Consignment Sellers Find Rough Waters on eBay

By Dave Saltman
EcommerceBytes.com
May 30, 2012




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If you ask people what the hardest paid gigs are, they usually come back with jobs such as teacher, nurse, road construction worker, and agricultural field-worker.

Now, you can add consignment seller on eBay to those other back-and-bank breakers, some of these sellers contend.

Consignment sellers doing as much as five figures in sales per month on eBay have been shut down over the last few years as they have failed to satisfy a small number of customers - they say, a tiny fraction of customers - over shipping costs and shipping time - something the consignors contend they find difficult to roll into the final accepted eBay customer bid.

These sellers say they are unfairly slammed by buyers, who just want revenge for costs the sellers say they cannot control or limit. Most sellers who have been sanctioned by eBay as these ratings - known as Detailed Seller Ratings - dropped, they were sent warning letters asking them to improve, but when the shut-down came, it came swiftly - and the sellers say, without warning.

South Florida new and used bicycle equipment seller Bikewerx was doing almost $90,000 a year in sales before eBay shut down his account earlier this year for an average feedback rating of 4.7 out of 5. Val Snider, who owns the store, with a physical location in Miami suburb Coral Gables, was selling used bicycle gear on consignment, and giving back a portion of his final eBay sales price to consumers. He asserts that his overall good record was damaged by a few buyers angry that he could not lower his shipping and handling costs.

"I was getting letters from eBay, telling to me to improve, and then all of sudden they just shut me off like a light switch," recalled Snider.

Several consignment sellers who operate "drop-off" stores that allow original sellers to pass along the hassle of online sales to professional merchants report harrowing experiences learning about - and trying to correct - below-standard feedback from buyers. In some cases, eBay will a sanction, but not cut-off a seller, by limiting the number of items one can sell.

That happened to Sell Thru Me (SellThruMeOneBay.com) owner Jason Hand. The Spokane, Wash.-based merchant was selling thousands of dollars of merchandise each month starting in the early 2000s - at one point, earning top selling status. Under his model, 60 percent of the final price obtained on eBay went to his customer, while he kept 40 percent. In order for Hand's margins to support his business' overhead, he instituted an arbitrary handling charge. With the implementation of the DSR system after 2007, Hand says the pressure to offer reduced or free shipping from eBay increased, and complaints about handling and shipping charges began to eat away at his top-selling status.

"That's where we got murdered," recalls Hand. "We did not think we were being unreasonable, but buyers would say "your shipping seems high.""

Bikewerx's Snider appealed to eBay's president, and received a letter back noting that he had received "multiple warnings" to improve, although the letter said nothing about a warning letter establishing a date for terminating Snider's account. Snider noted in his response to this letter that he had not received any feedback on 25% of his sales, thereby causing any negative buyer feedback to weigh more on his account.

eBay moved to a stricter series of seller ratings a few years back which allowed buyers to rate sellers on a number of categories, including shipping-related issues (such as cost and speed), along with whether the item was as described online. Sellers can be sanctioned if those ratings fall below 4.8 (out of 5). According to eBay's own website explanation, sellers can lose anchor store status if those ratings fall below 4.6 (out of 5), and featured store status, if below 4.4.

Sanctions include not appearing high up in search results, which default to "Best Match" - best match being determined in part by high ratings, or limiting the number of items one can sell. Ratings stick around on a seller's account for a year, and roll off after that. However, the mathematics of trying to improve ratings in a sanctioned environment in which the seller is limited to a certain number of sales per month can make it difficult to re-establish a good record, sellers say.

Hand noted that once he was restricted from an unlimited amount of items to selling 30 items per month, there was little way for him - even after removing handling charges and reducing shipping fees - to obtain high enough ratings to move back to unlimited selling.

"You can never acquire enough good ratings to make up for the good ratings that fall off after a one year," he observed.

EcommerceBytes.com wanted to find out more about eBay's latest thinking with regard to the DSR program, and whether eBay has considered addressing any of the seller-perceived inconsistencies or flaws in the program's structure or execution. Asked for more detailed information and answers to questions about the DSR program for this article, eBay responded by asking for the affected sellers' eBay IDs, in order to have customer service "reach out" to them.

A Virginia seller was kicked off of eBay last year, but was advised that they could sell under a different account. The seller, who asked not to be identified by name, was doing "1600 or 1700" dollars in sales a month, and in a good month, nearly "2000" in sales. But after one or more customers complained about shipping fees, the seller's account was abruptly shut down last fall. After re-starting on a different account, the seller now rolls handling and shipping into the price, and "eats it."

"Because there is so much pressure on having an affordable (shipping) price, we just rolled that handling back and now I'm just giving it away," this seller explained.

Sell Thru Me's Hand wonders if he can ever redeem himself enough to get back on as a seller. "It's been surreal," he said.

Comment on the EcommerceBytes Blog.

About the Author
Dave Saltman is a writer, editor, and online producer. He has written for newspapers, a wire service and online publications including The Washington Post, the Sarasota Herald-Tribune, America Online, CitySearch.com and LandandFarm.com. He has been a freelance contributor to the Harvard Education Letter since 2010, where he writes the award-winning "Tech Talk" column. Dave holds a B.A. from Clark University, an M.B.A. from Marymount University, and a teaching credential from California State University, Northridge. He tutors with California's public library-based literacy programs for adults and youth.

About the author:

Dave Saltman is a writer, editor, and online producer. He has written for newspapers, a wire service and online publications including The Washington Post, the Sarasota Herald-Tribune, America Online, CitySearch.com and LandandFarm.com. He has been a freelance contributor to the Harvard Education Letter since 2010, where he writes the award-winning "Tech Talk" column. Dave holds a B.A. from Clark University, an M.B.A. from Marymount University, and a teaching credential from California State University, Northridge. He tutors with California's public library-based literacy programs for adults and youth.

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