subject: Part Of Ebay's Success Is From Reputation Management [print this page] On eBay in December 2009, a woman auctioned off the copyright for a never before seen four minute home video of Marilyn Monroe smoking a joint. Rare items like this that have been left up in the attic for decades are available to millions of people through an online auction. However, some purchasers may question the trustworthiness of the seller. How can purchasers decide if the seller is trustworthy?
Reputation Management systems determine trustworthiness. The online marketplace, eBay, was founded in 1995 and started out trading things like Pez dispensers. Since then it has moved to selling larger items like electronic garages available to millions of people around the globe. What is it that has contributed to this company's great success? Part of the secret is in its reputation management
The feedback reputation forum induces trust between internet buyers and sellers. The highest bidder wins the auction and the winner and seller complete the deal. After every deal made on eBay, members can rate others' performances. A member's profile shows the rating and comments. Some eBay users create fantasy names for their identity, like "shellylovesshopping". This fantasy ID is all that the seller sees.
After every transaction these ratings are published on the eBay website so that other members can decide who they can trust. There are three possibilities a +1, -1, and 0. Negative feedback is given for issues such as: late shipping, non-delivery, or non-payment. This reputation system assigns a reputation to all the participants.
Whether or not this trust is reliable is questionable. There are benefits from the Feedback Forum, but this system does not provide any real protection against fraudsters. Most users are very reluctant to receive negatives ratings. In many cases users go to extreme lengths to avoid them. The success of an eBay trader depends on his or her virtual reputation. Hence, earning and maintaining a good reputation is vital.
Knowing the importance of positive feedback, fraudsters can blackmail traders to perform acts they are not legally obliged to do. After winning a bid, a fraudster can, for example, deny the receipt of an item and threaten the trader with negative feedback unless the seller fully reimburses the fraudster. Results of the eBay reputation management system show that generally buyers and sellers are honest, but there are still abuses.
A more elaborate and more highly developed reputation management system is needed in order to create a trading environment that is truly safer.
