My experience, changing thinking around self-insurance costs?

[ricarmic]

A couple days ago I had a multi-sale to a buyer.

When I was going through my process, I noted that while the ship to address was in the USA, the ID said it was registered to Nigeria.

So this raises it one notch on the “worry about” (AKA spider senses) scale.

Normally I would not worry about it, $$$ wise as you’ve seen in my “my self-insurance experience” the loss is quite survivable on its own.

However it was purchased and paid for as multiple individual items (which is often the case for me) so if there becomes a “defect” situation while it will technically only count as “1”, in all my stats, it counts higher because each transaction will count.

If you’ve seen my separate thread regarding reduced sales rates whilst defects are open (or I think if they increase), the actual cost of a defect situation becomes larger than the item itself, it becomes:

   -the cost of the item itself

   -the cost of “lost business” because of reduced exposure during/after the defects are received

In my case, the cost of lost exposure seems to be a lot higher than the cost of the item itself, so I decided to send it tracked which tripled the shipping price above my normal untracked/self-insured. In fact I’ve been finding I’ve been using my spider senses a lot more and sending a lot more tracked lately for this very reason.

I’ve also been acquiring a number of mistaken defects, the last two were: a case asking about how an item was shipped and a return request for INAD that was meant for another (Canadian) seller and given to me first by mistake (there really should be a way for a buyer to “undo” a mistaken case or return request). Sales volumes are down since I got those two, so it is quite possible that I’ll have a “my sales experience during lost TRS status” update sometime in the future too…… and it is also causing me to take less risks with “spider sense” situations than I normally would…..

[katlover1952]

I hear you & I think you are correct. I too recently received 2 defects which I did not feel were deserved. They were both because of low ratings on item description. In both cases they were not because there was anything wrong with the item but rather because the "color looked a bit different " in the picture. I take my pics in a photo tent with lights but I know that colors can look different on different monitors. At any rate being a small seller & already having a couple of "item not rec'd" defects (refunds were of course given - not really sure why I get a defect over the PO problems) I lost my top seller status. Since then sales have been down so it is a bit of a vicious circle - increased sales or time are the only way I will get my TS rating back! Tracked shipping would have prevented this - just wish it was not so expensive in Canada.

[rose-dee]

I have nowhere near the volume you have of course, but I think the problem comes down to either risking sales to far-flung places and hoping everything goes well, or restricting where one sells and accepting that will likely mean lower volume.  It is a dilemma -- especially if eBay may now be "punishing" sellers with cases and defects through poorer search standing.  

Since most of what I sell appeals to an English-speaking market (sewing patterns in English), I made the decision long ago to sell only to Canada, the U.S., U.K., Australia, NZ, and selected countries in Europe and Asia.  So far (touch wood) I've managed to avoid defects.  However I think had I been selling worldwide, I would have accumulated at least a couple of defects by now.  

If you're right about defects and cases affecting a seller's visibility and sales, that could have meant the end of me fairly quickly.  As you say, once you're downgraded in placement, etc., it's pretty difficult to make up for the defect losses in greater sales. 

Sadly for your sake, I see Nigeria isn't on eBay's list of 34 countries from which we're protected from defects due to INR.  I think that country should be on the list -- it seems to be in a lot of chaos right now. 

Best of luck to you with this; hopefully your "spider sense" is wrong in this instance! 

[ricarmic]

Hi Rose! Actually the shipping address is in the USA, but the ID is registered to Nigeria. I'm worried they're sending to a relative or something, I've had that before that turned out to be troublesome....

[recped]

---

@ricarmic wrote:

A couple days ago I had a multi-sale to a buyer.

When I was going through my process, I noted that while the ship to address was in the USA, the ID said it was registered to Nigeria.

So this raises it one notch on the “worry about” (AKA spider senses) scale.

Normally I would not worry about it, $$$ wise as you’ve seen in my “my self-insurance experience” the loss is quite survivable on its own.

However it was purchased and paid for as multiple individual items (which is often the case for me) so if there becomes a “defect” situation while it will technically only count as “1”, in all my stats, it counts higher because each transaction will count.

If you’ve seen my separate thread regarding reduced sales rates whilst defects are open (or I think if they increase), the actual cost of a defect situation becomes larger than the item itself, it becomes:

   -the cost of the item itself

   -the cost of “lost business” because of reduced exposure during/after the defects are received

In my case, the cost of lost exposure seems to be a lot higher than the cost of the item itself, so I decided to send it tracked which tripled the shipping price above my normal untracked/self-insured. In fact I’ve been finding I’ve been using my spider senses a lot more and sending a lot more tracked lately for this very reason.

I’ve also been acquiring a number of mistaken defects, the last two were: a case asking about how an item was shipped and a return request for INAD that was meant for another (Canadian) seller and given to me first by mistake (there really should be a way for a buyer to “undo” a mistaken case or return request). Sales volumes are down since I got those two, so it is quite possible that I’ll have a “my sales experience during lost TRS status” update sometime in the future too…… and it is also causing me to take less risks with “spider sense” situations than I normally would…..

---

Where does the "self-insurance" part of the thread title come into play? Having insurance or not has no effect on getting defects.

[pjcdn2005]

katlover - If a buyer claims snad because the color is slightly different than the picture you can often that defect removed. I don't know if the same is true when you get a low description rating but if the transactions aren't too far in the past you might want to try to get the defects removed.  On the U.S. sellers board there are a couple of people who are quite good at knowing if a defect has a chance of being removed and how to go about it so you might want to check there.

[pjcdn2005]

Off topic but only one of your listings shows that you ship to NZ.

[ricarmic]

Hi Rec! The self insurance link is that previously when I've thought about the cost of self insured INRs it has only been around the cost of the item lost.

Now I'm coming to understand that the cost of lost business (if my presumptions are correct) is probably often larger than the cost of the lost item, which leads me to self insure less than I would have before, to try to reduce the number of defects.

I think I now understand why you are asking, one has to translate "insurance" to "tracked" - Ie my uninsured packages are untracked and untracked are open to false INRs.

Does that help?

[recped]

---

@ricarmic wrote:
Hi Rec! The self insurance link is that previously when I've thought about the cost of self insured INRs it has only been around the cost of the item lost.

Now I'm coming to understand that the cost of lost business (if my presumptions are correct) is probably often larger than the cost of the lost item, which leads me to self insure less than I would have before, to try to reduce the number of defects.

I think I now understand why you are asking, one has to translate "insurance" to "tracked" - Ie my uninsured packages are untracked and untracked are open to false INRs.

Does that help?

---

I understand what you are saying but I still don't see any connection. A package sent with tracking that is late or doesn't arrive will get you the same defect as a package with no tracking. The only difference is that the tracked package will cost your buyer more, raise your buyers expectations of delivery time and enrich the pocket of the carrier you use.

I don't know what your defect percentage is but I highly doubt that there is any difference in exposure if you have 0% defects, .5% defects or 1.9% defects. Going over 2% might have some minimal effect and I would expect that going over 5% (Below Standard) will have an effect.

As far as I know, all this talk about exposure is only relevant if your buyers use Best Match, for other sorts I don't think there is any effect at all. Do any of your buyers use Best Match? Maybe the real newbies do, I'd be shocked if any serious stamp buyers use it.

The one other place where eBay might be picking you for additional exposure would be the way they show buyers related items in the sidebars and on other sellers listing pages. I have no idea how eBay selects those "related items" but like most things I expect the primary triggers are keywords and pricing with Seller performance stats only having a minor effect (except perhaps for Below Standard).

What is your current defect percentage? How many false INR defects do you think are included?

[ricarmic]

Hi Rec! Yes a truly lost package still gets a defect, however a tracked package cannot acquire a false INR which is what I am worried about.

My current rate is 1.14% it has been dropping from 1.25 over the last few days. It jumped from .75 to 1.25 within a day or two because of the 2 "false" defects.

As I mentioned in an earlier thread, I have noticed declining sales whilst cases/returns are open and after the number increases. It seems to hold true here as well.

At this time 20% (1) are false INRs.

[recped]

---

@ricarmic wrote:
Hi Rec! Yes a truly lost package still gets a defect, however a tracked package cannot acquire a false INR which is what I am worried about.

My current rate is 1.14% it has been dropping from 1.25 over the last few days. It jumped from .75 to 1.25 within a day or two because of the 2 "false" defects.

As I mentioned in an earlier thread, I have noticed declining sales whilst cases/returns are open and after the number increases. It seems to hold true here as well.

At this time 20% (1) are false INRs.

---

Of course it can!

1 - Buyer asks where the package is before delivery, you get a defect for that (perhaps you get lucky and it's removed)

2 - Buyer asks where the package is when it's past the delivery estimate, you get a defect and have almost no chance of removal.

You say you currently have 1 "false INR" defect, how do you know it's "false"?

The correlation you draw between one or two defects and reduced sales is extremely tenuous at best.

Now here's my experience when doing some buying last night. I was looking for some cheap trinkets that are offered by plenty of sellers. Initially I was just getting an overview of what was available so I used Best Match (before refining my search and switching to Lowest Price). It was pretty clear that the only thing really affecting placement in Best Match was previous sales history and price, the top of the heap listings were all from sellers with relatively poor feedback and no doubt lots of defects (non-TRS) but they had one thing in common....plenty of previous sales.

I understand that you are selling mostly OOAK and not multi-quantity listings, that would make some difference but still I'm quite convinced that all the "carrots" eBay dangles as "increasing exposure" are mostly smoke and mirrors.

One final comment, I have three selling ID's, currently I have 0.00% defects on all of them, if it's having any beneficial impact on sales I'm not seeing it at all. I was doing much better last fall when I had a bunch of defects.

[ricarmic]

Hi Rec, ok what I mean by a false INR is what I call "crime" where I believe the person lies and says they never got it - can't prove that of course.

I would call 1 and 2 false defects.

Like many things in eBayland, I really don't know what causes my sales slowdowns but I believe there is a link, from my observation.

My goal of this post was to invoke people to look beyond the actual loss cost, if there in fact is a link to lower exposure from defects etc.

I too in my categories have "bad" sellers who prevail with high volume items, certainly if you sell enough of a given item it trumps other causes of lower exposure, from what I see.

Unfortunately for me, as you've observed, I have little in the way of high volume items....

[recped]

My goal of this post was to invoke people to look beyond the actual loss cost, if there in fact is a link to lower exposure from defects etc.

And I'm on the other side of the fence trying to invoke in people to NOT think of all this seller performance stuff as that important to exposure!

What I would suggest to sellers is that they spend more time trying to figure exactly how their potential buyers search, do they browse, what keywords they use, how specific are their searches, do they use the left sidebar to refine their initial results, do their searches return a large number of matches or just a few, which sort order to they most often use.

Understanding how buyers find the items they eventually buy is the key to tweaking your listings so they show up.

One thing I've been reading on the boards since forever is that sellers report that they have done all things eBay suggests may increase their exposure, things related to Seller Performance that is, and it hasn't help them at all with their best match rankings.

Now I have a serious suggestion for you.........You have a lot of very old Fixed Price single quantity listings, end these listings and start them again as brand new listings. You will get rid of all that bad history that for sure is demoting those listings in any eBay search algorithm. Even eBay suggests that any listing without a sale in 16 months should be ended.

One final thought, what really counts is not how many defects YOU have but rather how many defects do you have compared to other sellers. For a quality seller such as yourself you probably already have the same or lower defect percentage than your competitors, reducing the percentage slightly isn't enough to make any substantive difference.

[ricarmic]

Hi Rec! 

You have good points and suggestions.

I have tried in the past to get buyers to describe to me how they found me and or my items and that turned out to be a lost cause, in many cases they had no idea. It seems clear that a good % of my buyers have very limited understanding of the site and how it works.

I do wonder if losing my TRS status would really affect sales that much, my suspicion is that it wouldn't. Hopefully I don't find out. 

I am already "downgraded" as I do not same day ship, I ship within 2 days which I think lowers me on its own.

I do have some reasonably solid statistics that do seem to identify a downward impact on sales while a case/return request is open, however they are not 100% consistent (ie not every time is the downward impact as big). This however is consistent with another belief I have that the search algorithm has a randomizing factor built in so that if one does the same search over and over again, one sees some different stuff - that way a buyer isn't faced with the same material all the time and goes away bored.

But really, what do I know, I think like most of us we each have our beliefs about what things do/n't work and we try to model our behaviors in a way to maximize things. Your thoughts are also good, it is certainly good for us to consider as many things as possible.

I like your suggestion regarding the "old" stuff. I've been thinking about dealing with some of it anyway as I'm over the 2,500 free listings each month now so the non-selling old stuff is raising my costs. I'll kill off some of it and the others I'll someday run an experiment closing a batch of them off and restarting and seeing what happens (assuming I can find the pictures still!)

[ricarmic]

An interesting update, I checked out my last 20 sales in terms of "duration" (ie how long the item had been listed for)

5 years

< 1 month

< 1 month

3 years

2 months

1 year 3 months

< 1 month

< 1 month

< 1 month

4 years

1 year

< 1 month

2 months

3 months

3 months

< 1 month

4 years

2 years

< 1 month

2 years 2 months

So 30% of my last 20 sales were items that were listed for > 16 months.

Having said this, some of them were combined sales, ie a person collects Finland stamps and they come and buy 5 Finland lots. Some are "new" some are "old". 

[rosscd57]

I have at two regular buyers, one from Korea and the other from Japan, both have their shipping adress's in the USA and both are high volume buyers.

I used Google Earth to take a look at the adress's and found that both look to be shipping companies in the US.

They have never been a problem and after about 40 days they always leave me positive feedback.

I figure these guys buy a lot of stuff, have it shipped to the US address and then create it up and send out of the country for resale.

[katlover1952]

PJ - thanks for the advice on contacting eBay regarding the defects for item as described regarding the photographs. Unfortunately it was a total waste of my time and energy as when I contact eBay they were ever so sympathetic then told me there was no way they could remove the defects as the person had actually left positive FB but low rating on IAD and as that was the buyer's opinion it could not be changed!! I told them how unfair it was but of course it falls on deaf ears.

The US discussion board is full of comments about the unfairness of the defect system as well but eBay just does not seem to care.

I do know that I lost my TRS status and I have not had a lot of sales since then so don't know if this is a direct result or not but do know it is frustrating.

[38e_avenue]

---

@katlover1952 wrote:

I do know that I lost my TRS status and I have not had a lot of sales since then so don't know if this is a direct result or not but do know it is frustrating.

---

It's not. I lost my TSR for a few months in 2012. Believe or not - they were my best months ever 😉

Please note (Recped already emphasized that), that only newbies and inexperienced buyers use "best match", which is directly affected by all this defect stuff.

Last month I had 4 INR cases open with defects. My sales didn't slow down and I had a surprisingly good March - much better thatn expected. 

Try to play with the markdown manager - it helps to boost the sales.  Add "best offer", add more listings, try to be more positive!

Good luck!

[mr.elmwood]

---

@38e_avenue wrote:

---

@katlover1952 wrote:

I do know that I lost my TRS status and I have not had a lot of sales since then so don't know if this is a direct result or not but do know it is frustrating.

---

It's not. I lost my TSR for a few months in 2012. Believe or not - they were my best months ever 😉

Please note (Recped already emphasized that), that only newbies and inexperienced buyers use "best match", which is directly affected by all this defect stuff.

Last month I had 4 INR cases open with defects. My sales didn't slow down and I had a surprisingly good March - much better thatn expected. 

Try to play with the markdown manager - it helps to boost the sales.  Add "best offer", add more listings, try to be more positive!

Good luck!

---

I was closed for a few weeks at Christmas. Got bored so I listed a bunch of stuff at auction to mix things up. Ending dates on the 25th and forward. I got good results.

Started trying, again, free shipping, and BOOM BABY more results.

I had one particular set of widgets, I had sold one in five months. Changed things around and sold five in one month. Same dollar amount.

[katlover1952]

reply to 38e_avenue

"try the markdown manager"

Thanks for the comments. Not sure what the markdown manager is. Would someone please explain that.

Thanks.