The Reputation Guy


eCommerce, Part 1

Posted in Online Reputation by thereputationguy on March 21, 2006

As I mentioned earlier, given the size and broad usage of eBay, and their feedback system, the need to establish a reputation to conduct ecommerce is a readily graspable concept for most people.

In comparision with Community, people who want to have a reputation in this space must give up some personal information – perhaps only simply stuff like location, email address and other non-personally identifying information, but many cases they disclose more.

A view of the different types of reputation systems on the web, detailed analysis in another posting –

ebay.com – Their rating system is fairly simple – “Positive”, “Neutral”, or “Negative”.

Sample:

Feedback score: 963
Positive Feedback: 99.9%
Members who left a positive: 964
Members who left a negative: 1
All positive feedback received: 987
Member since: Feb-19-02
Bid Retractions (Past 6 months): 0

eBay's system is the best known on the web.

But it doesn't provide a complete picture. One of the issues facing eBay's feedback system is the fear of retaliation. I've been seeing a lot of ads on ebay that state that they will leave negative feedback if the buyer leaves negative feedback for them. Personally I like this because it allows me to instantly narrow down the list on who to buy from. Having such a statement is inappropriate at best.

Overstock – They use a 1 – 5 rating system with thumbs up or down (Bad, Poor, Normal, Good, Excellent). They also have a personal rating system. Somehow I have a 5 out of 5 even though I didn't do anything except accept an unsolicated request to be friends from someone I don't know. I guess in absence of high volume sales to create a professional reputation, this becomes some kind of sudo reputation. Weak at best, could be argued misleading because unless you know how it's created (recepients can delete the rating), buyers might put more weight into it than appropriate.

Sample:
Commerce Rating: 212.0 [100% Positive]
Transaction Summary: Total # of Transactions: 253 Repeat rating: 312/178/43%
Personal rating: 5.0 (rated by 87 people)

The percentage is interesting, it shows how many of the customers were repeat customers. I agree there's no further validation of a good seller than the number of repeat customers. Kudos to Overstock for showing such a great number.

amazon.com – It's kinda strange how they ask people to rate their experience with 1 – 5, then turn around and reduce it to a 1-3 rating system. This is what they do: Positive Feedback: 5 or 4 stars, Neutral Feedback: 3 stars, Negative Feedback: 2 or 1 stars.

Sample:

Feedback Rating (Last 365 Days): (82) 4.9 out of 5 based on 82 ratings
Feedback Rating (Lifetime): (372) 4.9 out of 5 based on 372 ratings
See all seller feedback (372)
Amazonian Since: March 2003

Yahoo Auctions – They use a similar “Positive”, “Neutral”, or “Negative” as eBay. and a small comment field.
Sample:

Rating: 187 (198 positive ratings and 0 negative ratings)
198 auctions with positive comments by 187 unique users
0 auctions with negative comments by 0 unique users
1 auctions with neutral comments by 1 unique users

It's basically the same as eBay's, except they more clearly show that the figures count unique users instead of all purchases. I have mixed thoughts on whether this is good or bad.

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16 Responses to 'eCommerce, Part 1'

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  1. paolo said,

    I guess you are aware of these very interesting papers
    Resnick, Paul and Richard Zeckhauser. Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System. The Economics of the Internet and E-Commerce. Michael R. Baye, editor. Volume 11 of Advances in Applied Microeconomics. Amsterdam, Elsevier Science. 2002.
    Resnick, Paul, Zeckhauser, Richard, Swanson, John, and Kate Lockwood. The Value of Reputation on eBay: A Controlled Experiment. Forthcoming in Experimental Economics.

    Slightly unrelated to e-commerce Web communities but check couchsurfing as well (it is a sort of post-currency hospitality market, no? 😉
    and check how they try to deal with elicitating negative feedback when something bad happened
    “What To Do When You Have A “Not So Good” CS Experience???”
    http://www.couchsurfing.com/leave_reference.html?show_negative_info=1

  2. Andrew said,

    In my opinion, eBay has the best reputation system. It is simple to use and only takes a few minutes to understand. By comparision, I would say Overstock is the worst. Personal ratings are not very helpful when making a purchase online, and the repeat buyer system only really benefits high volume sellers.

  3. aber12 said,

    the rating system on yahoo auctions could be improved by translating the score into an overall feedback score. ebay’s system is easy to understand because everyone is on the same scale.

  4. una212 said,

    ebay’s mutual feedback withdrawl system if flawed, it is used by many sellers to keep their ratings high by returning neg feedback.

  5. Vince said,

    In my opinion, the personal rating on Overstock has got to be the most rediculous and useless thing on the internet. If you ever bother to click on a seller’s personal rating, all you would see is sellers giving other sellers good feedback in exchange for the same good feedback on their own personal rating. Garbage in my opinion

  6. Jo said,

    Vince, I agree. Overstock is a cluttered mess, they are trying to do too many things at once, and it doesn’t work.


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