On top of offering attractive products in competitive prices, marketplace sellers need to face one more - no less challenging - task: Ensuring that both their customers and the marketplace itself are satisfied with their performance.
If you’ve been operating a store on eBay or Amazon, you know that this dual satisfaction is hard to achieve, and sometimes can even be contradictory.
Another thing you must know is that online marketplaces are wholly buyer-centric. Their first priority is that the buyer, your customer, will have a great shopping experience, be pleased with the purchase and return for some more shopping on the marketplace.
This buyer-centric approach puts sellers in a problematic spot. Since the marketplace holds all the power they have very little leverage when dealing with disputes. In most cases, the seller will be on the ‘losing’ side, cost-wise and reputation-wise.
You know all that already. You are living this reality day in and day out.
What you don’t know is how Hipshipper can help you achieve that magic balance of customer and marketplace satisfaction.
What is Marketplace Satisfaction & Why It’s Important?
Amazon calls it “account health”, eBay calls it Detailed Seller Ratings (DSR). They both mean the same - how the marketplace evaluates you as a seller. This metric has a crucial impact on your chances to succeed in the marketplace.
Your seller performance must be in line with the marketplace demands. Both Amazon and eBay monitor the sellers performance in a very wide way and present it back to the seller through the above mentioned metrics. From the marketplace point of view, everything is done to achieve the same overall goal: Buyers getting the item they ordered on time. From the seller’s point of view, it’s a bit more tricky.
When everything goes smoothly, the marketplace is satisfied.
This satisfaction is critical for your success and future as a seller in the marketplace. Unfortunately, it takes very little for the marketplace’s satisfaction to abate and when that happens, your business suffers. It is as simple as that. Your seller ratings take a hit, which hurts the ranking of your products. Swift and brutal.
How Sellers Are Trying to ‘Satisfy’ Both Buyers and Marketplace
The only way a marketplace seller can make good with the customer and not take a hit at his seller rating is to take a hit at his profits; refund the customer for the purchase and ship the product back on his own expense. For most marketplace sellers, that’s a tough loss to swallow, and understandably so.
The thing is, losing money on a single deal is sure worth it when the alternative is hurting your seller ratings. But where the line is drawn? How many deals are worth to lose money over for keeping your seller ratings intact? Obviously there’s no magic number here and it all depends on your margins and the rate of returns you’re experiencing (it is advisable to check whether your rate of returns is in line with your niche - if it’s higher, you need to figure out why that is.)
No online seller, marketplace or not, can avoid the issue of returns. According to the Star Business Journal, eCommerce has a 20% average of returns, compared to 8-10% for brick-and-mortar, and according to Nadar, 89% of online shoppers said they returned an item in the last three years.
The reasons for returns are less obvious and much less supported by numbers. They range from bad fit / wrong size (apparel and shoes) to damaged goods / wrong item (all niches) to the infamous buyer’s remorse. Regardless of the reason, you’re best option as a marketplace seller is to refund the buyer and have the item shipped back; that’s of course excluding cases of obvious fraud (I got a plastic rabbit instead of a MacBook.)
While this ‘recommendation’ can be reasoned for domestic customers, it is really hard to uphold it with international customers, where shipping costs are multiplied, making a return shipping cost an almost automatic profitability loss on the deal.
International returns are one of the main reasons online sellers stay domestic. They present such a high risk, especially for smaller sellers, that many ecommerce business rather limit their potential growth and not take the risk.
Solving the Conflict Before It Escalates
There’s a limit to the seller’s own ability to satisfy both the marketplace and customers. If everything goes 100% smoothly than obviously there’s no problem. But does it ever?
So contrary to this article’s title, there is no magic balance you can achieve on your own. Your customers won’t be sympathetic to your need to preserve your seller rating and the marketplace would side with your customer - their customer - unless it’s an obvious case of fraud.
You obviously need outside help and that’s where Hipshipper steps in. First of all, we offer Free International Returns to online sellers. No questions asked. Your customer wants to return an item, we’ll take care of it, cost-wise and customer service-wise. We’ll send a return label to your customer, pre-refund the cost of shipping and have the item back at your place in no time.
We focus on free returns because we believe it’s the simplest, fastest, most satisfying way to solve seller-buyer conflicts. Instead of going back and forth and involving the marketplace we solve the conflict before it escalates.
It removes a massive obstacle from marketplace sellers’ path to deal profitability on their cross-border sales.
We have a few more tricks up our sleeve. Find out how Hipshipper helped over 700 eBay sellers (GSP review & comparison here) to boost their profits by up to 25% and why it is the right international shipping solution for you.