Update 03-26-2012:
Since this guide was written not long after DSRs were introduced, there have been some changes to how eBay handles things. Briefly:
1. eBay is now less concerned about DSR averages, and more concerned about how many "low" DSRs (a 1 or a 2 rating) sellers have in any one of the measured metrics. However any metric dropping below a 4.6 average is still trouble for any seller. For lower volume sellers (less than 600 sales a year), more than two "low" DSRs in the previous 12 months will drop them out of the "Top Rated Seller" status.
2. The "30 day average" measuring stick has been retired in favor of an evaluation period that looks backwards for the entire previous year (for sellers with lower volume - less than 400 transactions in 3 months), or looks back for 3 months (for sellers with higher volume).
3. "Fees Paid by Powersellers" is now largely irrelevant. The only fee discounts are for Top Rated Sellers (although large corporate "Diamondsellers" continue to get undisclosed, but deep, discounts). However, if any DSR average is below 4.6, you are no longer eligible to be a Power Seller or a Top Rated Seller.
4. DSRs still affect Best Match Search placement, but exactly how is unclear... eBay has little transparency regarding how they rank sellers for Best Match.
5. DSRs are still the basis for Selling Limits, Suspensions, and Removal From the Site, but the standards are no longer clear or well-defined as described below. DSRs are now also used as a basis for having PayPal hold a seller's money for 3 weeks before they will be paid.
6. eBay is in love with Free Shipping, so they now give an automatic "5" rating to sellers for Free Shipping... as a result, sellers are no longer getting "bad marks" even though they ship free.
7. eBay has provided sellers some "tools" to analyze their DSR performance. While this is helpful in figuring out exactly what problems or items are causing low DSRs for a seller, they can also be used to figure out what DSRs were left for a particular item. As a result, ALL sellers can now determine exactly what DSRs the buyer left for any item (if they know how to use the tools in this way, and choose to do so). So DSRs are not really anonymous for any buyer at this point.
What does remain the same is this: A DSR of 4 or less still has a punitive result for a seller, and eBay still gives buyers definitions for the DSR ratings that bear no resemblence to how eBay interprets the ratings when evaluating a seller.
Overall, a "3" or "4" rating is probably less damaging than when this guide was written in 2008/2009, and a "1" or "2" rating is more damaging than it was then. As a result, I changed my Terms of Sale comment to address "1" or "2" ratings directly. But the conclusion of the original guide remains unchanged... unless you wish to punish your seller, don't leave any DSRs less than "5". Under the newest policies, a "1" or "2" DSR is probably more damaging to a seller than a negative feedback.
The Original 2008/2009 Guide:
ABOUT THOSE DSRs...
I have the following statement in my Terms Of Sale:
Detailed Seller Ratings: Remember eBay considers 4 stars a bad seller. Please leave 5's, leave it blank, or let me know why you didn't. Thanks.
Why? Let's examine this question...
What buyers see: Buyers see four ratings, to one decimal place (i.e. 4.9). These ratings are 12 month averages - the average of all ratings left in the last 12 months. These are the ratings seen when buyers look at a seller's feedback. When buyers are asked to leave these ratings, they are given definitions that translate roughly as follows: 5 - Excellent, 4 - Above Average, 3 - Average, 2 - Below Average, and 1 - Poor.
What sellers see, and buyers don't: Sellers see what the buyers see. But they also see much more, and the ramifications aren't nearly as simple as the buyers are led to believe. First, in addition to the 12 month averages, sellers see 30 day averages which buyers cannot see. And they see these 30 day averages to two decimal places (i.e. 4.91). The 12 month averages buyers see give a general sense of the quality of the seller, but it is the 30 day averages that sellers really care about. eBay has many policies affecting sellers, all of which are based on these 30 day averages - these policies, and the realities about the 30 day averages are detailed as follows:
Fees Paid By Powersellers: Powersellers get fee discounts based on the 30 day DSR averages. If all four averages are at or above 4.9 for the entire billing period, they get a 20% discount on their fees. If the averages are all 4.8 or better, they get a 15% discount, and if they are all 4.6 or better they get a 5% discount.
Best Match Sort Status - All Sellers: eBay has a sort method that is now the default on the search called "Best Match". This is a super double-secret computer program that jumbles up the order of the items returned for the buyer's search. Obviously, sellers would like to be on page 1 of the results and not page 36 of the results. Best Match plays favorites or penalizes sellers based on the 30 day DSR averages (among many other factors that remain shrouded in mystery). If their DSRs are 4.7 or higher, they have a "raised" status - meaning they should have their items appear higher in the results. If their DSRs are below 4.5, they have a "lowered" status - meaning their items will likely appear on the last few pages of the results. So sellers with DSRs below 4.5 are less likely to have their items viewed, less likely to have them sell, and likely to get less money on auction items.
Selling Limits, Suspensions, and Removal From the Site - All Sellers: Sellers with a 30 day average DSR below 4.3 are placed on some sort of double-secret probation for 30 days. If the DSRs aren't raised above the specified level, the seller is prevented from selling on eBay. That is, kicked off.
So what does all this mean...
The Lies eBay tells Buyers:
1. DSRs Are Anonymous - the seller doesn't know how many stars the buyer left. As pointed out above, the seller can see the 30 day averages to two decimal points. And the seller can determine how many feedbacks are in the 30 day averages at any given moment by reviewing the Feedback Profile. So if a seller notes the 30 day averages after each feedback, it is a simple high school math problem to calculate the DSR that must have been left to cause the noted change in the 30 day average. There are two exceptions to this. High volume sellers who sell dozens of items a day usually won't be able to figure out exactly which feedback caused the problem unless they check it every few minutes. And low volume sellers (with less than 10 DSRs in 30 days) don't have their 30 day average given to them by eBay (although they are still subject to all of the policies outlined above). But all other sellers can determine fairly easily what DSR ratings a particular buyer left, if they feel like doing it.
2. DSR Definitions: As outlined above, eBay tells buyers "4" is "Good" or "Above Average", and "3" is "Neither Good nor Bad - Average". But if you review the policies outlined above, nothing could be further from the truth. If 71% of buyers leave a seller a "4", and 29% of buyers leave a seller a "5", you'd think that is somewhere between "Good" and "Excellent" - no problem, right? However the reality is that would result in an average below 4.3 and the seller would get no fee discounts, get their items buried on the last pages of the search results, and ultimately get them kicked off eBay.
3. The DSRs Reflect The Quality Of The Seller. The only one that actually is of any use is "Item As Described" - this is an important factor for future buyers to consider, and (other than the ambiguous definitions discussed above) is a worthwhile metric to measure. The other three are misleading or useless, at best.
"Communication" - what are we rating here? If the item is described properly and shipped as soon as it is paid, what communication is necessary? Most transactions require no communication at all - so what should the buyer do in this event? Many leave "3" since there was nothing good or bad to rate, but a bunch of "3" ratings will kill a seller. The seller could send an email for "Thanks for Winning!", another "Thanks for Paying!", and another "I Shipped It!". This might make some buyers happy, but would surely irk others by wasting their time with useless emails. The eBay site communicates all this to buyers anyhow, for those who want to know.
"Shipping Time" - this ultimately is a rating on how well the Postal Service performs. If the seller ships the next day but the post office takes a week to deliver it, many buyers may leave a "2" or a "3". But what more could a seller have done? The only excuse for leaving low marks here is if the seller waits a week to take it to the Post Office for no good reason.
"Shipping Cost" - this is the one most sellers have the most problem with, and again eBay gives little guidance on what reference standard should be used to give the rating. There are sellers who ship everything for free, and their DSR for this still is too low to get the fee discounts or "raised" Best Match status. What is the metric to evaluate? Whether it is higher or lower than the average shipping charges being charged for that type of item? Whether it is higher than the actual postage cost? If most sellers in a category offer Free Shipping, there are buyers out there that will rate Free Shipping a "3" because it is "average"! Other buyers just don't like how much the Post Office charges. And "Shipping Cost" actually competes with the "Shipping Time" metric. If a seller offers Priority Mail and Parcel Post options, they'll likey get low marks for cost if the buyer chooses Priority Mail. If the buyer chooses Parcel Post, the seller may get low marks for shipping time.
In addition, there is a problem with the DSRs as applied to the Diamond Level Powersellers (Bulk Catalog Sellers who pay no listing fees). eBay provides these large sellers the ability to have their feedback and DSRs "adjusted". Their negative feedback mysteriously disappears, and their DSRs go up by 0.3 or 0.4 overnight without any reason. So in addition to the issues discussed previously, some large sellers simply have fraudulent DSRs. This keeps these poor performing eBay cash-cows from being suspended, and keeps them above good sellers in the Best Match search sort. Honest, quality sellers ultimately pay the price. It should be noted eBay denies this is the case, despite ample evidence (from eBay users, and from off-site eCommerce reporting) it is true.
Conclusions
As can be seen, this system is seriously flawed. eBay gives one set of definitions to buyers, and judges sellers by an entirely different set of definitions. eBay claims this system is intended to motivate sellers to be better but unless the seller works to figure out what each buyer left, the seller has no way to know which "anonymous" DSR applied to which item and where the improvements need to be made. And 3 of the 4 rated areas are so ambiguous that the rating received will likely have more to do with what kind of day the buyer had at work, or what kind of buyer the particular item attracts, instead of the seller's actual performance.
So, unless there was a significant problem with one of these four areas, buyers should leave "5" for all of them. Anything less has punitive consequences for the seller. Leaving them blank does not hurt or help the seller. Now if the seller hid a defect in the photos and didn't describe it, or charged $10.00 extra for shipping, or didn't answer your repeated messages, or waited 10 days to ship the item for no good reason, by all means give them a low rating! Any of these seller deficiencies probably deserves a "1".
And if the buyer does leave less than "5" they should let the seller know why - for most sellers they really are anonymous, and they'll have no way to know there was a problem or which transaction it involved.
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