(A series of essays about what it is like to sell stuff on EBay)
I have been thinking lately about Top Rated Seller Status (having recently lost mine) and what that really means to me. Of course I am not happy about it exactly, but in truth I am not really loosing any sleep over it either and in fact I am wondering if I gave up too much of my bottom line to get it.
You might be thinking that I have lost my grip on reality here but let me try to explain. If you are a seller you already know about DSR ratings. We are rated on the following four items with 1 to 5 stars (5 being good and 1 not so much)
1) Item as described
3) Shipping Time
4) Shipping and Handling Charges
I may rant at a later date on why I don't think that number 4 should even be part of the rating system but for the purposes of this post all you need to know is that it is item number 4 that caused me to loose my top rated seller status. Item number 4 is also the reason that I didn't get Top Rated Seller status when EBay first started the program. So I have known that it is my trouble spot on the DSR system all along and I have been lowering my shipping charges since the implementation of the DSR system. Maybe I am not supposed to say this but I do try to cover my shipping cost with a little extra (usually around a dollar) for handling fees and packaging material. Sometimes I do make more than a dollar and sometimes I am actually in the hole because I haven't charged enough for shipping.
As I said, I have been mostly lowering my shipping charges for several months anyway but when I found out that I lost my Top Rated Seller Status because of shipping charges my immediate reaction was to lower my shipping costs even more. In many cases planning not to cover my whole shipping cost, by under charging by roughly a dollar (for a 2.00 total decrease in revenue.) On all other items I just eliminated my handling fee of roughly 1.00.
I did all of this in an effort to gain back these benefits.
|Here is the information directly from EBay (with my perhaps irreverent comments in blue)
Top-rated seller benefits
Top-rated sellers receive the following privileges and benefits:
Priority customer support (I don't know what this means and there is no additional information from EBay. I guess we can conclude that I didn't use this benefit when I had it, so it certainly doesn't make sense to mourn its loss.)
20% discount on final value fees (on item price portion only) (This is the only really tangible item which I will elaborate on below)
Unpaid item protection, which offers credit for certain listing upgrade fees on eligible listing formats (Maybe I missed something but follow this link and tell me if I am wrong. This benefit applies to all sellers not just top rated ones and it only pertains to certain auction type listings. I list almost exclusively in the fixed price format so again not worth crying over.)
Expanded seller protection from PayPal (Again I don't know what this means and there is no additional information)
A badge on listing pages (Yes this one does give you bragging rights and in truth if everything else is equal I would probably choose the seller with the pretty badge)
Improved search standing for fixed price listings in Best Match search results (The importance of this item is hard to first measure and second quantify but it sounds really good kind of like "Priority Customer Support" here at least there is some additional information but my thoughts are these: One thing is true, buyers do see the Top Rated Seller badge in the search function. The rest of it is some interesting double speak about how top rated seller status will improve your search standing in best match for fixed price listings and oh by the way there is no guarantee that your item will actually show up ahead of someone else's. Also I don't know about you but even though the search default is "Best Match" I usually end up searching by price.)
United Parcel Service (UPS) rate discounts (I didn't see anything about a discount or Top Rated Sellers when I clicked through this link. Maybe it's because I lost my status but I don't ever use UPS so in my case who cares anyway.)
So what is my point?
Well lets go back to the math (keeping it very simple because that's the way I do math.) I said above that on my new listings I was loosing 1 to 2 dollars per item in an effort to appease the shipping charge gods. When I was receiving my Top Rated Seller 20% discount it was between $14.00 and $19.00 each month. So just for the sake of argument lets use the $19.00 discount and the $1.00 decrease in revenue. The other number we need is my unit sales per month which averaged about 50 per month in 2011. I realize that this scenario is taking a very simplistic view of something that is actually much more complex but I think it still makes a valid argument.
For me it doesn't make sense to lower my shipping costs to have zero or negative profit. Using the numbers above my best case scenario shows I am loosing $50.00 to make back $19.00 for a net loss of $31.00. My worst case scenario shows I am loosing $100.00 to make back $14.00 for a net loss of $82.00.
Of course there is the question of whether or not the lack of a Top Rated Seller Badge is costing me actual sales but in my case I think the fallout is minimal since my items are mostly one of a kind I don't have apples to apples competition.
Don't get me wrong I would like to have my Top Rated Seller Status back but not at the expense to my bottom line. I feel a little smarter having thought it through. I certainly want to have reasonable shipping costs for the buyer but they also have to be reasonable for me. If you are still here thanks for hanging in there for this longer post.