eBay Launches Feedback 2.0 System, Should Boost Revenue

eBay's (EBAY) latest townhall meeting featured Brian Burke, the manager and visionary behind Ebay's recently launched Feedback 2.0 system (transcript (.pdf)). Burke explained how the new system improves the buying experience and increases conversion rates (at least in tests).

Feedback 2.0 enhances eBay's current rating system by adding more detail (the current system is nearly worthless because so many sellers have 98%+positive feedback). Buyers can now rate sellers on four criteria: item description, communications, shipping time, and shipping/handling charges. Each category gets a 1-to-5 rating, and the average score is displayed on the seller's Feedback page. The goal is to drive traffic from bad sellers to good sellers and help all sellers improve.

The system was tested for 2 months in 8 global markets prior to last week's U.S. launch. In the tests, 70-75% of buyers left detailed seller ratings, and overall conversion rates increased (conversion for sellers with ratings below 3 declined).

This new system should help eBay continue to drive higher revenue per listing--one key to revitalizing the core commerce business. Recent RPL gains have come as a result of reduced listings after the Ebay Store pricing hike in August. Feedback 2.0 should modestly boost RPL in the second half of 2007.

EBAY 1-yr chart

Comments

[Malkiel:]

I'm skeptical of this, though it is an improvement on the current system. So long as sellers can retaliate against buyers by leaving them less-good feedback in exchange for less-good feedback, the system is broken. Feedback should be a seller-only feature, as sellers can control the whole transaction by not shipping until verified payment is received. The practice of sellers placing conditions on who can win their auctions based on a buyer's feedback history is prejudicial, probably illegal in many states, and an unhelpful consequence of the current system.

2007 May 11 11:03 AM

[G:]

Cmon! Ebay modifies its feedback and it's suppose to boost revenue? Hogwash! Feedback is not the big issue. Fraud, fees and policies are the real issues on both the buyer's and the seller's point of view. Anytime you have a feedback system based on individual people's comments, you are subject to emotional outbursts, schemes and manipulation. Don't get me wrong; feedback is an issue that needs improvement and clarification. However, the current fix is no more than a bandaid and there are much more serious issues that need addressing.
Just to give a perspective on the new feedback system, here is how it will play out. Let's say I am the seller and you are the buyer. As an established seller I do not need your feedback and it has minimal affect on my overall score, etc. So now that the feedback system allows the buyer to be more specific in his rating of the seller (more categories), however, the seller side of the equation remains status quo. First I as a seller have know reason to leave feedback 1st; so I simply don't. That leaves the burden of feedback on the buyer. Now if the buyer leaves too negative of comments in any of the categories, the seller will retaliate with neutral or negative comments.
The old feedback was pretty much the same, now it will just delay the timeframe of the feedback and create a more complex system to create false and retalitory feedback.
For example, you as the buyer feels that it took too long to get your item, otherwise the transaction was okay. So you give the seller good marks in everything but shipping. The seller sees this feedback and can retaliate with negative feedback. Sure in the perfect world we are all honest and give each other the benefit of the doubt. But we arent in a perfect world and this is reality. So I as the seller notice that the buyer took excessive time to pay for his item (let's say 10-14 days) and he opted to send a money order rather than Paypal. Now as a seller I am perfectly fine with this as it saves me Paypal fees; but it does have a tendency to delay things. I am at the mercy of the USPS, or whatever mail delivery system. Now I have to deposit the money order and make sure it's legit. (Yes there are scammers out there using fraudulent money orders to pay for items and it's not until after it has been deposited that the bank notifies the seller that it is fake. At which time, if the seller already shipped he is out the money). So I deposit and wait 2-3 days for it to process before I ship. This whole process is considered too long for my buyer and his only recourse of complaint is thru the NEW/IMPROVED ebay feedback. Good luck guys but your feedback system is still flawed and this 'enhancement' will only prove the point further.

2007 Jun 04 01:52 PM