After months of confusion and concern among sellers, eBay has revealed the criteria used in its recent crackdown on "bad" sellers. The explanation came in the form of a post on the eBay Chatter blog by Lynda Talgo, the Senior Director of Global Marketplace Policy at eBay.

The crackdown began around the time of eBay's annual conference in June, but eBay did not inform sellers of the new enforcement initiative until August. Sellers have been confused about the messaging from eBay describing the way it judges non-peformance, and also about the restrictions eBay places on sellers found in violation of the policy.

Talgo said eBay looks at negative and neutral feedback activity and the Item Not Received rate to determine a seller's level of buyer dissatisfaction, and it uses sales volume to determine which restriction to use. Talgo said eBay uses two thresholds to determine which restrictions are most appropriate:

Greater than 5% buyer dissatisfaction rate: A seller must have more than 5% negative and neutral feedback, as a seller, over the last 90 days to qualify, and must also receive a minimum of two negatives from unique buyers in the past 90 days.

Greater than 10% buyer dissatisfaction rate: A seller must have more than 10% negative and neutral feedback, as a seller, over the last 90 days to qualify, and must also receive a minimum of three negatives from unique buyers in the past 90 days.

There are different restrictions for buyer dissatisfaction rates greater than 5% versus rates greater than 10%, with different restrictions for low-volume sellers. Here's what Talgo stated in the blog post:

Low-volume sellers: Low-volume sellers are those with no more than 2 negative feedback, no neutral feedback, and less than $3000 sales volume over a 90-day period, would typically receive a 14-day full selling restriction. After the 14-day period has passed, selling privileges will be automatically reinstated. (As with all selling restrictions, the seller can continue to bid and communicate.)

Higher-volume sellers: For sellers who are not low-volume sellers, and who have a buyer dissatisfaction rate of greater than 5% (but less than 10%), the restriction is a reduction in sales volume. Sellers will be able to continue selling and listing items, up to 75% of their historical weekly volume based on their rolling 90 day history of completed sales. (This is based on dollar sales volume, not on number of items sold.) We manually review restricted accounts after 30 days to determine if there has been improvement in their satisfaction rates. If a seller's buyer dissatisfaction rate is brought down to less than 5%, the restriction will be lifted. If the buyer dissatisfaction rate remains greater than 5%, the sales volume will continue to be reduced. Additionally, sellers whose performance substantially worsens during this restriction period may be subject to more significant consequences.

Sellers who incur a buyer dissatisfaction rate of greater than 10%, with at least three unique negative feedback, will receive a full selling restriction.

Again, these historical numbers are based on the rolling 90 days.

Talgo used examples to demonstrate how sellers would be affected by the policy. Another area of confusion among sellers was how eBay calculated the volume restrictions. Talgo said the volume restriction is based on average completed weekly sales volume over a rolling 90 day period, and she used the following example:

For example, consider Seller_Steve, who typically sells $1000/week in merchandise, and then receives a restriction to 75% of his historical weekly volume. In this example, Seller_Steve would be allowed to list items until his completed sales over a 7-day period reach $750 (75% of $1000), at which point he would be no longer able to list. He could list again when his sold volume over the past 7 days dropped below $750.

Note from the Editor: AuctionBytes will ask eBay to clarify the low-volume seller criteria and restrictions.

Update 8/30/07
Clarification from eBay regarding low-volume sellers: "A low-volume seller could not be restricted with 1 neg - they would need exactly 2 negs. Because of the way we've chosen to define this group, if a seller has more than 2 negs, they would not be a low-volume seller, and they would receive the 75% restriction."

http://www.ebaychatter.com/the_chatter/2007/08/lynda-talgo-of-.html

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