The changing World of eBay – by Cliff Ennico (01 Nov 08)

Book coverPosted by permission of Cliff Ennico – author of The eBay Seller’s Tax and Legal Answer Book – Get your copy at www.TaxandLegalBook.com

 

THE CHANGING WORLD OF EBAY

“I’ve been selling on eBay the past several years, but frankly I’m thinking of quitting.  It’s just getting too hard to sell on the site, eBay keeps changing the rules every few weeks, and these rule changes seem to favor the big retailers over the little people who made eBay what it is today.  Other sellers I know have shifted to Amazon and other sites, but I’m afraid I will be ‘lost in the crowd’ if I start listing there.  Is there a way that small online retailers can continue to be successful on eBay?”

It’s no secret.  It’s getting harder and harder to build a successful eBay selling business.  Not only is the competition greater than ever before (between 700,000 and 800,000 sellers in the United States alone), but eBay itself is making it tougher for sellers to succeed by “raising the bar” for people it will allow to sell on the site.

To understand the changes that have rocked the eBay community in recent years, it helps to understand the fundamental difference between “amateur” and “professional” retailers.

When eBay was first launched in the mid-1990s, it developed a reputation (rightly or wrongly), as “the world’s flea market”.  Anyone with twenty-five cents to spend and a few spare hours to create an eBay auction listing could sell anything on eBay to anyone in the world.  They did not have to be a “regular vendor”: they did not have to follow rules of business etiquette, they did not have to keep careful books and records, they did not have to be disciplined about how they conducted their businesses or how they interacted with customers. 

That was the great charm of eBay in the “good old days” of the late 1990s.  It was more than just “online commerce”.  It was a community of buyers and sellers interacting with each other on the site, and you never knew what would happen when you bid on something for sale there.  You might make a friend for life.  You might meet a world authority on a certain type of antique or collectible.  You might even meet your future spouse or life partner on eBay.

Often you were buying from people who knew less about their merchandise than you did, and you picked up some amazing bargains that way because “these people on eBay don’t know what they’ve got”.

But eBay’s charm was also its greatest handicap.  Many times when bidding on eBay you found yourself dealing with the seller from Hell – somebody who was trying to pass off fake antiques as genuine, somebody who was ripping you off on shipping and handling fees, somebody who shipped you an article different than the one you ordered (and wouldn’t give you your money back), or somebody whose sole goal in life was to steal your personal identity online.

eBay, in short, developed a reputation as the “Wild West” of online commerce – a place where anything could happen, and often did.

In recent years, eBay has taken some dramatic steps to move away from its “Wild West” image and become more respectable as an online commerce venue for serious sellers and buyers – steps that, in some cases, have alienated large sectors of their selling community.  Among some of the more recent changes:

O         the development of Detailed Seller Ratings (or DSRs) that enable buyers to rate sellers on a variety of different aspects of the sale experience (for example, shipping speed, quality of merchandise, communications) rather than an “overall” rating;

O         eliminating sellers’ ability to leave “negative feedback” on buyers, while allowing buyers greater leverage to leave “negative feedback” on sellers;

O         requiring eBay sellers to use an “online payment system” such as PayPal for all transactions, and prohibiting them from accepting checks, money orders and other paper-based forms of payment; and

O         eliminating certain benefits (such as eBay’s coveted “PowerSeller” status) for sellers whose DSRs fall below certain percentage levels.

Many sellers complain that, because of these changes, “eBay isn’t as much fun as it used to be,” and numerous newspaper and magazine articles and online “blogs” have accused eBay of trying to eliminate “Mom and Pop” sellers from the site in favor of large corporate retailers.

But the truth, as always, is a bit more complex than that.  eBay has, and probably always will, welcome the small “Mom and Pop” retailer on the site, especially in the “antiques and collectibles” and used/secondhand merchandise categories where eBay still reigns supreme in the e-commerce world.  Because the site is so easy to use, and because of the extensive support sellers receive on the site, eBay will probably for some time continue to be the first place small businesses go to “cut their teeth” when venturing into e-commerce.

What will clearly no longer be tolerated on eBay, however, are “amateur” sellers – people who don’t run their businesses in a professional, customer-friendly and, well, “businesslike” manner.

You can be small and thrive on eBay, but from now on, you gotta be good.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series ‘Money Hunt’.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  DISTRIBUTED BY CREATORS SYNDICATE, INC.

 

 

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