Content Matters

As more and more sites allowing transactions between individuals, buyer and seller reputations become a valuable currency.  Your reputation on sites like eBay or Craigslist, is critical if you want strangers to trust you enough to do business.

Those buyer and seller histories are one of the stronger assets of auction and classified sites.  It also becomes a huge switching cost for those who might want to move to a different platform.  If I have a strong eBay rating, I would be unlikely to switch to a different auction site, where I would have to start building that reputation again.

This concept, of “transactional trust” was the focus of a recent study, commissioned by Rapleaf, developer of a portable reputation system.  The survey was developed and run by Scott Allen, author of the Virtual Handshake, and focused on how transactional trust is developed between strangers in virtual markets.

The survey included both online buyers and sellers and focused on what factors each used to assess the trustworthiness of potential sellers or buyers.

Not surprisingly, buyers indicated that the posted ratings of the seller were the top criteria in determining trustworthiness.  Second was “reputation of the site or publication”, followed by “payment method you are using”.

For sellers, the number one criteria was payment method.  Paypal and credit card users are considered fairly safe by most.  Sellers indicated that “posted ratings of buyers” was second, perhaps surprising as these are often less comprehensive than ratings for sellers.  Other criteria with a strong showing were the reputation of the site, intuition and email or phone interaction with the buyer.

The survey makes it clear that both buyers and sellers are still struggling to assess trustworthiness of those whom they buy, sell or trade with. 

Rapleaf, sponsor of the survey, has developed a portable reputation system for e-commerce transactions.  Rapleaf’s aim is to become the independent database of transactional reputation. 

The concept of portable reputation is compelling.  The challenge for a company like Rapleaf is that it will be difficult to develop a large enough database to make it a trusted source.  Ratings are the crown jewels of e-commerce companies like eBay and Amazon and they make it easy for buyers and sellers to rate their counterparts and will surely resist efforts by outsiders to play in their space.