A good reputation pays off

A good reputation at Ebay is "worth its weight in gold", according to German researchers who have conducted a detailed analysis of the relationship between positive feedback and successful sales on the auction site.

According to the boffins from the University of Bonn and the University of Aachen, a good reputation on Ebay translates into cold, hard cash. After analysing more than 300 auctions of popular DVDs over the past year, Oliver Gürtler from the University of Bonn and his Aachen colleague Christian Grund discovered that one percentage point more in positive customer votes pushes the auction price up on average by four per cent.

"And this happens although we are dealing with relatively small sums in the transactions we investigated," said Gürtler. "With more expensive products a good reputation should be even more rewarding."

Last November and December the two economics experts scrutinised a total of 313 DVD sales on Ebay, restricting their focus to six popular films including Madagascar, Star Wars and War of the Worlds.

The two researchers also noted that the popular belief among Ebay auctioneers saying that, wherever possible, auctions should end in the evenings when potential buyers have more time, appears to be false.

"Our study shows that the returns in the evenings are even lower than normal, " said Gürtler. One possible explanation he gives is that most vendors now place the deadlines for their auctions in the evenings in the hope of getting as many customers as possible. The customers therefore have a comparatively large range of products to choose from at this time of day. And this lowers the prices – despite the increase in demand in the evenings.