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Is Reseller Ratings a Rip-off?

While most of this newsletter’s readers provide physical products or services out of brick-and-mortar companies, some might do e-business either entirely or as a complementary aspect to their in-person business.

For those of you who specialize in e-commerce, we wanted to bring to your attention a controversy regarding the e-commerce site ResellerRatings.

The service actually launched all the way back in 1996, but it’s become far more popular in recent years. ResellerRatings essentially solicits consumer reviews of online retailers. While being listed is free, businesses benefit far more substantially when they enter a “Merchant Membership” with the ResellerRatings.

This allows the merchant far more latitude in controlling reviews that are posted, lets them gather information about reviewer (for research and potential leads), gather reviews from current customers through a ResellerRatings mechanism, and much more. Good online reviews can have a massively positive effect on a site’s SEO, making the ResellerRatings program very beneficial.

However, many of the businesses that used ResellerRatings felt blindsided when they were hit with massive price increases with what they considered virtually no warning.

Notices about price increases were buried at the end of marketing emails, and the increases were substantial: Businesses paying $99 per month for the service found themselves being charged as much as $499 a month. One retailer learned that ResellerRatings planned to increase his monthly cost from $29 per month to an astonishing $899.

When some retailers canceled their agreements with ResellerRatings, the agreement wasn’t the only thing that disappeared. So did many of their best reviews, leading to their sites plummeting in Google search results.

Responding to a considerable online outcry, ResellerRatings has agreed that as of January 2013, any retailer who cancels a subscription will retain all reviews to that point. However, the way the company has handled its business to date raises several red flags.

We’d recommend that a company give great thought to the pros and cons of ResellerRatings before entering into a subscription. It’s also important to consider that there are free alternatives such as PriceGrabber and BizRate, each of which can be beneficial in the e-commerce review world.

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