Monthly Archives: June 2010

Feedback Etiquette

Feedback is a really important contributor to the smooth running of business on Trade Me.

Although these days we’re all pretty comfortable with the notion of buying and selling stuff on our favourite auction site, it still requires a leap of faith: we’re sending money to people we don’t know, for goods we haven’t seen.

Without some variation on the Feedback system , we’d be completely in the dark about the trustworthiness or otherwise of those on the other end of the trade.

The Feedback system isn’t perfect – but it’s a very useful guide to other members of the Trade Me community and helps keep us honest. Imagine how much better behaved we’d be in real life if we all had to walk around wearing Feedback ratings given to us by our colleagues and customers!

We had an enquiry from a reader which raised some useful questions about Feedback on Trade Me:

C.U. from Martinborough wrote:

“I’ve been wondering why everyone who’s browsing my Trade Me feedback (which is good and part of the ‘getting to trust someone’) can actually see what I had purchased or sold. I don’t (a) think it’s anyone’s business, (b) think it matters and (c) find it helpful if you’ve (for example) bought something as a surprise present.”

Thanks for the question, C.U. Firstly, to the issue of the surprise present: I’ve sold a few copies of my TRADE ME SUCCESS SECRETS book to bidders who intend to give the book away as a present — I usually know in advance because people ask me to sign the book “Happy Birthday [O So Lucky Recipient]“.

On those occasions, I usually hold off giving feedback until I receive it from the buyer, to avoid tipping off the recipient in case they have access to the buyer’s Trade Me account. Similarly, you should specifically ask sellers to delay feedback if you intend to give the item as a gift.

To the more philosophical question of why feedback should link through to item details:

If you’re a buyer considering whether a particular seller is trustworthy, even when they have a number of positive feedbacks it can be really important to see exactly how they gained those feedbacks.

A whole industry sprung up over on eBay, selling downloadable items for one cent each, purely to build feedback. As a result, it has been really easy on eBay to build a host of positive feedbacks with minimal cost and little effort [although the rules over there have since been changed to try to stamp out the practice].

Trade Me don’t allow downloadable items to be sold on the site, so that particular problem is avoided here in NZ; but you can still amass positive feedback for limited expense by buying a pile of $1 items, paying promptly and requesting positive feedback. Your feedback total looks good but you haven’t actually done much to deserve it. So, when you set out to sell a high-value item, the feedback numbers can mislead us about exactly how trustworthy you are.

In such circumstances, it’s really important for prospective buyers to have the ability to see for themselves exactly how you acquired that glowing feedback score.

Also, from a purely commercial point of view, if I’m a potential buyer interested in buying a widget from you, it’s useful information for me to know how much you earned from earlier widget sales. I don’t want to overpay!

So what’s the best way to give Feedback?

Some pointers on Feedback etiquette, firstly for sellers:

  • Ideally, post feedback as soon as you’ve posted the item off to the fortunate buyer. You’ve completed your part of the transaction. Also, it’s another reinforcement to the purchaser that their item is actually on the way [and you do have the opportunity to adjust or delete your feedback if problems arise later].
  • If you’re a high volume seller, on the other hand, you’ll need to streamline the various parts of your operation so probably can’t afford the time to give instant feedback. In that case, schedule time at least once a week for posting feedback on all that week’s auctions; 15 minutes should be enough.
  • Try to be unique and creative when you leave feedback. Yes, you could just create generic feedback statements, such as ‘Great buyer, quick payment, A+++’, but you’ll make a better impact with more customised feedback. You never know when a few thoughtful words will lead to new customers.

For buyers:

  • Wait for the safe arrival of your item. If it turns up in good condition and matches the auction description, give positive feedback promptly.
  • If there are problems, try and resolve them with the seller before you resort to posting negative feedback. It’s easy to get into a feedback escalation situation, both buyer and seller posting feedback flames. Try not to go there.
  • On the other hand, if the seller is a ratbag and simply doesn’t meet his/her obligations, you should seriously consider giving that red-face negative. The Trade Me community is self-policing but relies on all members to do their part.

If, despite all the above, you do get negative feedback:

  • Learn from it
  • Mend your ways if necessary
  • You do have the right of reply posted directly below the feedback – use it wisely
  • You also have the facility to post feedback on the trader – but try to avoid retaliatory feedback
  • And of course you can (and should) try to rectify the situation — the trader has the ability to remove the feedback they posted.

Trade Me will not review negative feedback unless:

  • It contains swear words or vulgarities (but note that Trade Me reserves the right to determine what it considers swear words, vulgarities or defamatory statements)
  • It contains defamatory statements
  • It contains the trader’s contact details, phone number, surname, email address or other means to individually identify the trader
  • The trader placing feedback has been permanently removed from Trade Me for misbehaving
  • The feedback refers to an ongoing investigation by Trade Me, the police, or any other authorised party
  • Trade Me is ordered by the court to remove it

If you feel that any feedback has breached these terms, you can report it to Trade Me (as long as it’s not more than 30 days old).

And one more thing: you can be held legally responsible for damages to the trader’s reputation under New Zealand law. So keep your feedback factual.

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Making An Offer They Can’t Refuse

You’re listing a product to sell. What price should you ask? How do you decide?

Selling on Trade Me is all about encouraging early bids and creating emotional attachments with the items. Your pricing strategy has a very real influence on whether early bidding is successfully achieved. To understand exactly what pricing strategies are right for you, you first need to understand the psychology of bidding.

THE PSYCHOLOGY OF BIDDING

Scenario 1: The high starting bid
You have a widget for sale. You bought it for $20 and you think it’s worth $40. You list it with a minimum starting bid (same as the reserve) of $39.95.

After a few days you’ve attracted some casual viewers but no bids. Then a widget-lover finds the auction and looks over the listing details. He sees the high starting bid price and wonders to himself:

  • Is this widget a must-have addition to my collection or just a passing fancy?
  • Should I bid for this or save my money for something special?
  • Is it really worth $39.95?
  • Why isn’t anyone else bidding?

If his widget-addiction is strong, he’ll make a bid. If your product description is mind-boggling and everything else stacks up, maybe that could tip the balance. Otherwise, no sale.

Scenario 2: The $1 No Reserve Auction
Same widget, different pricing. You still think the widget’s worth $40 but this time you start the auction at $1, No Reserve. Right from the start, you get more traffic — your widget shows up in the Widgets category and also in the $1 No Reserve Category. You attract a few casual viewers who have some interest in your item. Since the price is so low, they’ll place a bid on it if they have any interest at all, or if they think they can resell it and make a quick profit.

That mere act of someone making a bid transforms the fate of your widget. Now it attracts more interest — someone’s bid on it; it must be worthwhile. More people see the widget listing and more bid on it. There’s an increasing perception of the value of the widget (based on bidding behaviour which is really the blind leading the blind).

The bidding gets up to $10 or $15 when those with a merely casual interest stop bidding. Now your widget-lover comes along. When you started the bidding at $39.95, the price was high and he had to try to justify the purchase to himself. Now it’s a low price, obviously a great deal — and a host of others are interested in the widget. But our hero is a widget-loving expert and right away he develops a sense of ownership — ‘I know and understand widgets; this one is mine!’ He bids $20 and becomes top dog, leading the bidding.

Enter Widget Lover #2. He sees the widget, he sees all the bids and maybe recognises the user name of Widget Lover #1. The opponent effect kicks in — a bidding war erupts. Up, up, up goes the price, past $30, past $35, past $40. Widget Lover #1 finally gets the prize, for $49.77.

Why was Widget Lover #1 willing to pay more in this second scenario? Suddenly he really wanted it — but might lose out. The widget’s relative value had changed as a result of the auction itself. It wasn’t just a case of ‘do I really need this widget?’ any more. Now it was serious: ‘I have to win this auction — this is my widget. I’m the widget-lover.’

So how do you tap into the psychology of bidding to increase the potential return on your widget? There are five primary pricing strategies used by sellers at the start of their auctions:

1. STARTING BID = MINIMUM AMOUNT YOU WISH TO RECEIVE FOR THE ITEM
(Often flagged in listing headlines as ‘Start = Reserve’ or ‘S=R’.) This is a fairly straightforward pricing strategy: set the starting price (and the reserve) at the amount you think the item’s worth.

Recommended when

  • You’re selling an item that appeals only to a very small niche market. If you’ll only get a small number of bids for an item, make them count — and make them profitable.
  • You have absolutely no idea what the item is worth. List it for the minimum profit margin you want to get for it (after factoring in your acquisition cost).

2. STARTING BID = $1, WITH NO RESERVE (HEADLINE SHORTHAND: $1NR)
Simply start the bidding at $1 and set the reserve at $1. [NB: A word of warning with this strategy: be mentally prepared to let your product go for as little as one dollar. Not every auction proceeds according to plan.]

Recommended when

  • You’re selling an item with wide appeal. If you’re offering a product that potentially appeals to a large target market, casual visitors will be willing to bid on your item at an early stage because it seems like a great bargain.

3. LOW STARTING BID + HIGH RESERVE PRICE
You could start your auction at an attractive low price (even as low as $1) with a significant reserve price (say $40) as protection in case bidding is too low.

Recommended when

  • You want to attract as much interest as possible in your auction, but don’t want to sell the item unless the bidding reaches a minimum level.

4. STARTING BID = ENOUGH TO COVER YOUR PURCHASE PRICE AND LISTING FEES
This pricing strategy (where Start also equals Reserve) is a halfway-house between strategies #1 (high minimum bid) and #2 (no minimum bid).

Recommended when

  • You previously opted for a high starting bid strategy but your item failed to sell. You’re not prepared to try a $1 No Reserve alternative because you wish to at least earn back your investment.

5. STARTING BID = PERCENTAGE OF LISTED VALUE (AND START=RESERVE)
With this strategy you price your starting bid in relation to an existing price guide or published price. For example, you might sell DVDs and start all of your auctions at 60% of recommended retail prices. Or you might sell a collectable item such as stamps or comic books, where price guides and catalogues exist and you can quote them in your listings.

Recommended when

  • There have not been any recent trades in the products you’re selling, so there are no Trade Me benchmarks with which to work.

MAKING A FIXED PRICE OFFER
At the end of an auction, the seller has one final opportunity to offer the item at a fixed price. It’s a blunt instrument – price is the only variable under the seller’s control at this stage. If you just want to be rid of the item, offer it at that legendary “price they can’t refuse”.

Otherwise, choose a price that you’d be happy receiving — if someone accepts, it’s a done deal.

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