Alibaba received a $192,000 penalty for pricing during the past two Singles’ Day sales.
eBay’s biggest auction seller calls non-payers for payment and gets a high rate of response. Repeat offenders are banned.
As online auctions grow in number, so does that small but pesky number of auction winners who don’t follow through with payment. Online apparel liquidator eValueville.com reduced its so-called “deadbeat bidder” rate to 2.5% from 7% of auction sales in two months with better management, president Andrew Waites tells Internet Retailer, by closer tracking of winning bidders who don’t send payment, calling them to ask for it, and booting from the site repeat offenders who refuse to pay up.
In theory, that kind of follow-up could keep eValueville busy: At 300,000 sales, the Hattiesburg, MS-based company closed more auctions on eBay than anyone else in the past 12 months. But Waites says it’s rare that bidders who are contacted don’t pay up. “They usually apologize, pay, and are great customers going forward,” he says. “We think they want to be able to come back to the site because of the value – our average price is 87% off retail. But if we have warned someone and they continue to abuse, then they are banned from the site.”
Waites adds that eValueville initially paid little attention to the problem of deadbeat bidders because the incidence of non-payers wasn’t statistically significant. But a later look at the numbers brought a different perspective and a new policy. “As our systems and technology became more robust, instead of just putting out fires, we could manage the business more tightly,” he says. It turns out that eValuville’s customer base is heavily skewed toward repeat customers, who represent 87% of the site’s audience. “With that type of matrix, if one large customer doesn`t pay a bill, that has an impact,” Waites says.
He adds that eValueville’s average customer buys 4.5 items from the web site per day. Some buy 200 and 300 items, and much of that merchandise, says Waites, “winds up back on eBay.”