Understanding the eBay Search Algorithm

Wingender Ecommerce ConsultingThe Secret Sauce – the eBay Search Algorithm

Kentucky Fried Chicken has its secret recipe. Coke has the secret formula. Google has a top-secret search algorithm that includes hundreds – probably thousands – of factors. eBay, like Google, has a search algorithm that determines where your product will appear on a search results page, or a category page that a customer sees after navigating down to a particular category of product.

What’s an algorithm?

To be a professional and consistently profitable seller on eBay, to separate your company’s eBay store from all the other amateurs cleaning out their closets, you need to understand some important things about the eBay algorithm. If you understand how eBay “thinks”, it will lead you down the right road to all of your other decisions, from pricing to product procurement to imaging, etc. You need to understand how eBay decides where your product listings will appear and be able to execute accordingly.

Deciphering the eBay Search Algorithm

The eBay search algorithm is much more complicated than most people realize. Someone’s products are not listed at the top only because they had the best price. Remember, eBay doesn’t get paid until someone buys something (generally speaking, let’s forget about listing fees for now). So, eBay wants its site visitors to see products that they’ll actually buy, much in the same way that Google wants people to see search results that people will click on, because they’re relevant to what they wanted or needed.

Here’s a uber-simple example.  Let’s say Company T has listed an item, model ABC123, for $95.00. Company Z also sells the same model ABC123, but has it listed for $100.00. Most lay people – amateur sellers – think that Company T’s item will appear at the top of the results, and will earn all of the sales. That’s not necessarily true, for so many reasons that I can’t list them all here. A lot of times, that will be true, but not always. Now, let’s say that Company T is not a top-rated seller, while Company Z is. Company Z has been on eBay much longer, and this particular item has a CTR rate of 2%, versus only 1% for Company T’s listing. Finally, Company T’s conversion rate is 2%, while Company Z’s conversion rate is 3%. eBay is doing a lot of high-speed math in the background, but, simplistically, it looks like this: 10,000 people searched for “model ABC123”. A bunch of listings appeared, including companies T and Z. Two hundred people clicked on Company Z’s item, and of those, 3% (6 people) bought it, for total sales of $600.00. Meanwhile, Company T, at $95, had only 100 people click, and of those, only 2 bought, for a total of $190.00 in sales. eBay would rather promote the company that generates more sales, because that generates more commissions for eBay. So, eBay will do everything it can to promote the better performing companies and their listings.

That was a simple example. Now remember that there are many, many more factors in the algorithm that determine where your products show up in a customer’s search. The ordinary seller doesn’t have this knowledge, and isn’t willing to spend the time to learn it just to sell a few items. But the professional eBay store manager needs to know this well.

Why is it so important to appear higher in search results? What’s wrong with being on the second page, or even at the bottom of the first page?  It’s just a matter of understanding human nature. We’re impatient creatures, and often pressed for time. We want to get what we need, and move on. It’s commonly known that most people never click to see the results on page two, and that goes for Google, Amazon, and ebay. It’s also true that listings at the bottom of the page also have a much lower chance of being seen. Many users will simply never scroll beyond or beneath the results they see when the page loads. If they see what they want on the first screen (what we call “above the fold”), they’ll click on that and maybe one or two other options, but never go any further down the page.

So, what are the elements, or factors, in the eBay search algorithm?

With the exception of probably just a few eBay employees, no one knows for sure. I’ve read a lot of articles, talked to various people, and done a lot of experimenting in my past jobs or consulting jobs, and I have a pretty good idea of the most important factors.

  1. Item-based factors
  2. Account-based factors
  3. Seasonal factors
  4. Searcher’s previous search history
  5. Stuff we haven’t thought of yet

There a lot of item-based factors to consider. Price is the most important, as you’d expect. But, if you’ve ever created an eBay listing from scratch, you know there are a lot of possible data values on which eBay can calculate and rank. Be cognizant of this when you’re creating listings. SEO (search engine optimization) factors come next. If you have a strong, keyword-heavy title and product description, that will help you rank higher. This is a topic that needs more explanation and examples in a future post.

Shipping cost and delivery time are part of the formula. If you’re charging for shipping, it’s an automatic strike against you, and will really hurt your chances of selling something, vis-à-vis another listing. Pictures – their quantity and their size. A picture is worth a thousand words, and nowhere is this more true than on ebay or Amazon, especially if you sell non-commodity type items. Sales/Promotions: eBay lets you put your items “on sale”, and you should. This will cause a dramatic improvement in sale results. When you put an item on sale, you’ll get a “label” icon in your listing – it may say “Sale”, or it might list the percentage off, such as “15% off”. Putting items on sales does three things: 1) It reduces the price, which by itself improves your results page positioning; 2) It creates value in the customer’s mind, which improves your conversion rate; 3) it is undoubtedly a factor in the search algorithm. I’ve been able to repeatedly test this. Was the improvement simply because the price was less? In testing I conducted for multiple retailers, I was able to prove that just being on “sale” improved the item’s spot in search results positioning.

Account-based factors apply to all of your listings. For example, your selling history – how long you’ve been an eBay seller – is a factor. I often tell people – if you’re thinking about it, at least get started. You don’t need to list thousands of items, but list a few, sell a few items, and get good buyer feedback. Because, for example, if two companies are selling the exact same thing, and their listings are equal in all respects, the company who has been selling on eBay longer may be listed higher and get more clicks. That all factors would be equal is probably never going to happen, but there are many factors like this, and you want to be better than your competitors in as many of these factors as you can, in order to appear higher in search results.

The single most important account-based factor is your selling rating. This topic requires a separate article, not only because of its importance, but also because of its complexity. Many sellers, the good ones, are “Top Rated Sellers”, and this must be your goal. It’s hard to achieve, and hard to maintain. I’ve seen sellers lose it many, many times, and when they do, their sales suffer significantly. It’s important to establish a company culture that values this rating, understands why it’s important, and celebrates little victories, like achieving ratings count milestones, or getting a negative rating removed.

Other account-based factors: your return policy and your location. eBay probably gives preferential treatment to sellers with friendlier return policies, and definitely will give a nudge up to sellers who are closer to the buyer, which reduces shipping time, which in turn reduces negative feedback. I’ve included these under “account-based”, but these could be item-based as well.

Seasonal factors probably aren’t quite as important as many others, but I do believe they count. So, for example, if it’s closer to Christmas, and someone types in “drinking glasses”, and you have a listing for “etched Christmas drinking glasses”, your listing will probably appear higher around Christmas.

Previous search history is probably a factor too. Like Google, I believe that eBay “remembers” your past few searches, in order to get a better understanding of what the searcher is looking for. So, if you as a searcher typed in “Christmas drinking glasses” in your previous search, and then typed in “Christmas drinking cups” in your current search, eBay now has a pretty good idea of what you’re looking for. So, it very well may bring up your listing this time, if you have “Santa Claus glasses” in your listing. This may not be the best example, but you probably get the idea. So, how do you take this knowledge and make it actionable? Simple – write great listings, with great titles, and great descriptions. Use the available Item Specifics fields that eBay provides – they’re very important in search too. But if eBay is using multiple user searches to figure out what a customer is really looking for, having detailed item titles and descriptions is one way to say to ebay: “Hey, our item might be what this person is trying to find!”

Stuff we haven’t thought of yet.  Remember, eBay’s search algorithm is a unpublished secret. What we know to be true comes from years of reading, experimenting, talking to others, and listening closely to eBay’s employees when they talk about it. So every time you create a listing, ask yourself this: If I were eBay, how would I evaluate this little piece of data, or omission of this information, in order to maximize their customers’ search relevancy, increase clickthrough rates, increase conversion rates, and maximize eBay’s commissions? Even if you’re not sure, try it. Here’s an example. eBay has a charitable program called “eBay Giving Works”. I don’t know if it’s part of the algorithm or not, but suspect that it is. I do know that in some experiments I’ve done, items I’ve put into that program seem to sell just a little better. It’s not cheap to participate – a minimum of 10% of the sales price goes to the charity – so if you have razor-thin margins, this isn’t really an option for you. There may be other even more surprising factors that go into the algorithm. But, if you’re a true pro – a company that provides Exceptional Customer Service (ECS), writes great listings, and has great quality products at excellent prices – you can run a profitable, competitive eBay store.

© 2013 Rick Wingender Marketplace Consulting