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The very first blog about ebay
updated July 20, 2015

eBay's Structure and business model may be the best on the internet for investors, but only so-so for users. It's bank - PayPal - is a poisonous snake in your pocket

Ebay stands alone as the world's biggest supply and demand bazaar. It allows anyone to buy and sell with the pros.

What's written below began as the first-ever blog about ebay, back in the 1990s. It gets updated from time to time.

eBay is the People's Auction Site where granny in her kitchen - and the most knowledgeable antique specialist - and business selling to business can hold auctions side-by-side and never know the others exist. And all can make respectable livings for themselves and for eBay.

eBay does not hold auctions itself. It provides an international platform for everyone in the world to hold his own auctions.

Think of it as a vast mall with eBay the landlord having an unlimited number of stalls to rent, each stall an auction house run by a tenant. Some hold a few sales a year, some a few a week, and some have 5000 or more items listed every day at their eBay stall.

One actually runs an astounding 10,000 auctions a week for art posters. Less than 1% of his auctions attract bids but he's there 52 weeks a year. That's his business model and it does what he needs.

Currently the site hosts tens of millions of simultaneous auctions run by millions of tenants. I'm one. While the site's Search function leaves much to be desired, you can find about half my auctions by searching ebay for useraccount2

Each auction earns eBay a fee. They add up. And up. And up. And fees GO up and up and up. What began as a value-priced service run by people who cared about ebay, went public and is run by directors from Wall Street who care only about maximizing profits.

So now the charges are what the traffic will bear.

Under Wall Street influence, the curse of investor control means ebay must add to its income in any way possible, including taking it from the pockets of users. Although it's hugely profitable, it regularly raises commission rates on sellers. To stay in business, sellers must raise their opening bids, contributing to inflation.

Even worse, and probably illegal in some states, ebay skims off a commission on what the buyer pays for shipping. If sellers don't over-charge buyers in response, or build an overcharge into the price on fixed price items, sellers lose money on shipping.

[But that's better than selling books on Amazon. Amazon not only skims the S&H fee, they also impose a ceiling on what the seller can charge for shipping. It's often less than the seller must pay the Post Office for Book Rate. Think $3.75 to ship a 10-volume set.]

In the beginning, eBay had a hands-off relation with sales, about what a mall landlord has regarding the stores it rents to. Customers deal with the tenant, not with the landlord. But eBay now interferes in ways mall landlords never do.

For example eBay forbids auctioneers from accepting checks in payment. Almost surely illegal, but they do it. It increases business at PayPal, ebay's bank, which skims the top off payments. That gives ebay its second skimming off the delivery charge.

Ebay sets a ceiling on the total value of what a seller can list in a month, and the total number of items. They nag sellers to lower their prices. Unless it sells, there's no commission. They couldn't care less if the seller loses money.

At some point, these intrusive reaches into how its tenants do business will convince some court that eBay is making decisions that rightfully belong to the auctioneer. That would move it from landlord to co-participant in the auctions, forcing ebay to take responsibility for business on the site.

They appear to be prepared for that, and can produce hours of testimony explaining what they do to protect sellers and buyers from predators. Not from PayPal; other predators.

In most respects the auction is between seller and buyer. Legally eBay has nothing to do with the truth of the item description, whether it's stolen goods, whether it's a cheap knock-off priced like the real thing, the method or timeliness of shipping, collection of payments, etc. eBay's business is ostensibly renting cyberspace. The tenants - individual auctioneers - are responsible for the auctions.

EBay tells courts that it's role in these sales is no more than the telephone company's role when we order a pizza, but through fees eBay gets a piece of the pie.

eBay is not an absentee landlord. They constantly prowl their site searching for auctions to close which violate their labyrinth of rules. Some rules are based on laws, some based on eBay's company culture, some based on VERO, the Verified Rights Owner Program. That's eBay's enforcement arm for claimants to abusive US copyright and trademark laws.

To eBay, a complainant who registers with their VERO program is NEVER wrong, even when they obviously are.

eBay is rife with political correctness. If the landlord doesn't approve of what you listed, your auction is cancelled and deleted. Period. The banned list grows and grows. I cannot find where anything ever came off the list.

Clearing their site of swindlers is an on-going problem. Ebay consistently evades responsibility for them. The courts hold that eBay isn't responsible for fraud on the site. For example, this precedent setting case on bootleg films sold on ebay.

Ebay was taking far fewer rights away from auctioneers in 2001 when that case was heard. It might be decided differently today, so ebay has instituted buyer and seller guarantees to minimize damage to users.

Putting site safety on a scale of 1 to 10, with 1 being none at all, I'd rate ebay a 4 in 2001 and a 9 today. IMO an incredible feat.

eBay's bottom end is people taking in each other's washing and making money doing it. They go to yard sales in the closing hours, buy all the leftovers for a $5 bill, and auction individual items, often with astounding results. Sounds unbelievable, but there is a huge market in the US of women buying used, year-old, K-Mart children's clothes for more than it sold for new, and then paying to mail it. It's that or drive the family clunker 75 miles to a K-Mart.

At the top end eBay offers a $195,000 Frederic Remington painting, $10,000 Tiffany lamp shades, million dollar collector cars, real estate, and multi-million dollar coin collections.

In-between are:

* People buying and selling the most astonishing array of white elephants the planet has ever seen in one place. For example, crockery selling for $2 at a yard sale can bring over $1000 on eBay. Never mind that it's thick in the ankles, lacks grace, is lumpy and often garish, finds the cheerless tint in every color, and is most at home in the trailer park in Ohio where it came from. Thousands of Americans flock to eBay for artless baked dirt pottery who wouldn't look twice at exquisite, delicate European or Japanese porcelain. Ebay mirrors America.

There are serious collectors here. For the accumulator of anything at all eBay is a dream come true. With all those auctions going at once, anyone can make scores of wonderful finds every time he searches the site.

One example: on auction I sold a stack of 10 Edison phonograph records from the teens and 20s. It included a recording of an early George Gershwin song - "The Life of a Rose" from George White's Scandals. Musicologists were aware of the song but believed it was never recorded. This one may be the only copy left. The high bidder got the stack of records for $50.10 plus $10.90 postage.

* There are folks building or dismantling superb collections of anything you can name, from expensive objects d'art that cost a fortune when new, to ten cent comic books and plastic candy dispensers nearly everyone threw away. Or counterfeits. There's plenty of old-fashioned fraud mixed with new-fashioned fraud. Ebay's guarantees can help.

There are:

* people making hay while the sun shines on fads like [remember these?] Beanie Babies, Furbys, and sports trading cards. eBay sells more "rare sports cards" every hour than were printed since the beginning of time but no one minds. Beauty is in the eye of the beer holder. So long as it looks to the pigeon like a preserved original that's what counts. Did you know that 90% of all sports autographs are bogus? The FBI does, and ran a sting in LA in partnership with CBS news to demonstrate;

* swindlers lead lambs to the slaughter by offering new computers, costly software, and cruises to exotic places at prices too good to be true. When it's too good to be true it's a swindler offering it. Because of ebay's guarantees we see less of this now.

* folks selling things they don't own. (Look for auctions with generic illustrations or catalog photos.) They ship weeks after you pay because they use your money to purchase the item they pre-sold to you. eBay demands they explain this in clear and readable type in the auction. Many do, many don't. See below.

* there are entire communities mobilized to cheat gullible eBay users, for example, Dragasani, Romania

Use eBay's Feedback system as a guide. I'll say that again: Use eBay's Feedback as a guide. Buying from a seller who has more than 2 negative feedbacks per 100 transactions is asking for trouble. This is for sellers only, because ebay shields crooked buyers. No crooked buyer gets a Negative or Neutral feedback, only Positive. That's ebay's rule.

Would it be different if ebay's designer, Pierre Omidyar, had been a seller rather than buyer?

The modern ebay is nothing like the original, thanks to pre-selling. Pre-selling allows anyone to sit at a desk, even in a jail cell, and run auctions for anything at all that's available new. When the auction closes and he gets paid, he buys the item from a wholesale source and has it shipped to the buyer. Anyone can be a big time ebay auctioneer running a cash flow business with zero start-up cost.

For a time, this made ebay a magnet for folks who take the money and run. Crime prevention cleared up most of that, and allowed ebay to become one of the world's largest retail sources for new products from all over the globe. An 18-year-old in Hong Kong can be responsible for auctioning 30,000 items a week shipped from a warehouse the size of a laptop.

That kind of big-time auctioneering was undreamed of when ebay was born. Not a whisper of that can be found in business plans ebay filed with the SEC when it went public.

Across America today nearly every antique store is connected with the Internet, and has an ebay store. Often eBay is far more responsible for sales than foot traffic.

As well it should be. The smallest hole-in-the-wall shop in the most backwater hamlet can post an item for sale that in an hour can be seen by more customers than drive by the store in a lifetime.

Geography, foot traffic, cleanliness no longer matter. Musty back alley shops can move their most valuable items (and their junk) in seven days rather than months or years, and for higher prices.

Ebay brought the world's largest supply and the world largest demand together. Doing so changed the collecting world, mostly for the better but there are downsides.

What was once so rarely found that a collector would pay dearly to own it, now might be bought for a few dollars, or go begging for lack of bidders.

Example: A pristine, as-new copy of LIFE Magazine's 1969 special edition, To The Moon And Back, with the best photos of Neil Armstrong's moon walk, used to be worth $30 or more if you could find one. Today most eBay auctions for it won't bring an opening bid of 99 cents no matter how good the condition. Everyone who bought it in 1969 saved it and is selling it on eBay. The demand was crushed by over-supply.

After eBay grew to 10 million registered accounts, antique and junk shop owners began closing their stores and operating their business on-line from home. You can't beat free rent and zero paid staff.

Now eBay has more than 100 million registered accounts and the on-line demand for many items has been met. Result? Some dealers went back to the malls and rustic storefronts to sell goods that online auctions can no longer move. They need to reach people NOT on eBay! That's when ebay began advertising itself on TV.

For some sellers the biggest problem isn't finding buyers but finding desirable merchandise. New techniques have sprung up for that. Since eBay is awash with the uneducated who screw up listings, dealers learned to search for misspelled or mis-described items that shoppers won't come across. They get them for a bargain, then re-sell correctly named at better prices. The cyberspace version of "We buy junk; we sell antiques".

In response Ebay now provides sellers a spell checker when writing an auction description.

It's also commonplace for today's vast antique malls to be stocked with things bought on eBay. A $20 asking price isn't unreasonable for that 1969 LIFE Magazine if the customer doesn't know eBay has it for 99 cents plus postage.

Business-2-Business sellers come to eBay when their channels are choked with unsold goods. Sell the slow movers by the hundreds or thousands to the highest bidder for instant payment, and move on. eBay has ten thousand times more customers than any other auction service, and there's no advertising cost.

To impress Wall Street, publicly-traded B2B companies issue press releases announcing they sell on eBay.

Many states use eBay to hold their government "as is, where is" surplus sales. These are risky since the item is often not working or not complete. Bidders can't ask "Does it work?" because no one knows. States take no returns, make no refunds. The trade-off is rock bottom price.

Today eBay caters to businesses selling to individuals, but it still serves the individual, amateur seller. A sizable percentage of these people are disabled, retired, or isolated in rural farms, mountain hollows, or islands.

Isolated? Disabled? Retired? None of those things means what it did before eBay came along. The personal stories of eBay changing lives can fill a library.

eBayers are too busy to read them, as the site found out when it published "eBay Magazine" one of whose regular features was the story of a life changed by eBay. Despite being professional and useful the magazine lasted only a year.

Unlike dealing with Wal-Mart, an eBay transaction is with a real person, self-selected and untrained, making his own judgments. Real people are not always professional, polite, considerate, or remember to sign their check or tell you the address to ship to. Real people have computer breakdowns and are hospitalized and lose email and go on vacation and die, any of which can delay shipping.

Those factors account for at least 80% of the small percentage of sales that don't go like clockwork. The overwhelming majority of sales are enjoyable, problem-free transactions. 'Twas not always thus, but is now.

We compiled statistics years ago showing that most problems occur in a mere 10 product categories, 10 out of hundreds. Aside from those categories, nearly all the remaining problems are caused by a failure to communicate - send email, receive it, respond to it, understand it.

Failure to respond to email is the reason most cited for giving Negative feedback. It's ignoring responsibility and everyone knows it. Failing to respond to email is inexcusable.

Success on eBay is easy: avoid the 10 problem categories, send and respond to email, and telephone the other party if you don't make email contact after the sale. Follow that, read the auction description carefully, check the feedback of the seller, and there is only the slimmest chance you will not be a happy camper.

And keep up with the news. Remember that widely reported CBS/FBI sting proving that more than 90% of sports autographs are fake everywhere including eBay. You're expected to know that.

Because not everyone in the 10 problem-prone categories is a thief or bimbo I won't list the categories. Instead remember that the rule for happy transactions is to deal with sellers with very few Negative feedbacks. Unlike crooked buyers, a seller will have no more Positives than he earns.

Psychologists point out that we apply our own scruples to our business practices. If we are trustworthy, we tend to trust others. So read the auction fine print. Some sellers make a point of threatening bidders. It's wise to interpret that as saying "Don't trust me!"

A few problem categories are exceptions to that and run a lower happiness rate than the norm, generating more complaints from buyers and sellers who discover their trading partner is a jerk.

Clothing, sports memorabilia, and mass-produced stuffed animals require extra care. Clothing is commonly in poorer condition than described. Sports memorabilia is awash with fakes and fraudsters. Mass-produced stuffed animals will involve at least one simpleton in the deal.

Computer categories require extra care. Broken PCs and peripherals aren't always described as broken. Shipping is commonly two to four times the actual cost, and insurance often four times what the carrier charges. Avoid the price gougers; go with sellers who treat you right.

In all categories be wary of those who flaunt religion. ANY mention of God or Jesus is a red flag when you see it on an auction page or business email. As wise old Missouri Baptist Harry Truman put it, "When you can hear them praying, it's time to check the lock on the barn." Harry knew piety is the favored camouflage of a scoundrel, often while he waves your nation's flag.

How does eBay work?

Each item is sold to the highest bidder in a "silent auction." A large percentage of the items offered at eBay result in sales, including those that have a Reserve minimum. In almost all cases sellers get their money and buyers get their treasure.

Bidders have the option of placing a secret limit on what they will pay for an item. An automatic Proxy System will tender their bid step-by-step to the lowest amount needed to keep them top bidder. If their top limit is exceeded by someone else, that person becomes top bidder unless the earlier bidder returns to the auction page and places a new, higher limit. Auctions expire at a fixed time.

Sophisticated bidders will watch an auction's last few minutes and enter their top limit toward the close, often in the last 5 seconds. Bidders who lose call that "sniping" and grouse about it, until they understand that any bid during the life of an auction is as good as any other. Age of a bid doesn't matter.

The sniper's winning bid will always be the lowest amount necessary to win, frequently just $1 above the loser. In fact his top limit was probably far higher but the proxy system never bids more than the one increment required to be on top.

Ebay's Proxy System is the same one used by Sotheby's for their absentee bidders.

The Proxy System is totally automated and no one - not seller, other bidders, or eBay - can tamper with it. So far as anyone knows it's 100% safe and reliable.

If the Internet is slow or blocked, or eBay is having technical difficulties, these delays can prevent timely bidding from our computer. That's easily circumvented by entering your maximum proxy bid when you first come across the auction. If you lose, it can only be to someone willing to bid more, not net lag.

An experienced sniper will make his first appearance in an auction in the last 10 seconds. Two or three good snipers going head-to-head with proxy bidding can drive a bid up by hundreds of dollars, even thousands, in a flash, totally automated, yet none will have bid a penny more than what the item was worth to him.

The greatest thrill for a seller is watching this happen to his auction.

One time I put on eBay a rare light bulb I bought at a gallery auction for $55. For the entire week there was one bid, the opening minimum of $4.99. With eight seconds left, three snipers entered proxy bids. The winning bid was $263. The winning bidder thought it went cheap. He said his proxy limit was over $400.

After the sale, sellers get an automated email telling them the auction ended, the winning bid, and how to contact the high bidder. The winning bidder also gets an email telling him how much he owes for the item and S&H. Should the winner fail to pay, the seller can complain to ebay and get his commission back while the buyer is free to go on screwing up auctions. Sellers can put bidders on their Bidder Block list if they can find it and understand how to use it. Ebay buries this function.

To succeed on eBay Sellers need only describe their items honestly, respond promptly to email, pack with care, and ship when they get paid. Creator Omidyar found the way for anyone -- from world-class salesman to under-class moron -- to quit his job or quit loafing and make a good living on the Internet.

Minimum intelligence is required to put an auction on eBay. None is required to be a bidder.

Even knowing how to use a computer isn't required for eBay success. A seller of collector magazines once asked on a chat board how to copy and paste in Windows. Despite having had over 1000 eBay sales, he admitted he knew nothing about computers.

There are successful sellers with beautiful auction pages carefully crafted showing excellent photos of the item, with descriptions reflecting hours of research and years developing expertise in the subject.

There are successful sellers with abysmal page design, no description, blurry photos or none, and total ignorance of their items or the English language.

One knowledgeable, professional seller of upscale estate silver never uses pictures and (over) charges for shipping based on the selling price, not the cost to ship. Still, he's successful, though his sales are about one-fifth those of his competitors who use pictures and honest shipping charges.

One successful husband and wife team may have the ugliest pages at eBay. They violate every guideline. Black backgrounds with poorly contrasting colors, a display format too wide for the monitor, a moving marquee of trashy blurb, 400 words of fine print disclaiming responsibility, pathetic out-of-focus pictures, and virtually no description of the item because they don't know anything about what they are listing.

They buy crap at government auctions no one else wants, usually for the opening bid, and re-sell it on eBay.

Result? They could be eBay's poster child. This team with a knowledge level approaching zip and no selling skill earned the right to use the "Power Seller" logo which requires a minimum of $2,000 in sales every month. (Sales - not profits.)

All they have to do is post the auctions on eBay and play fair. Millions of shoppers do the rest.

The year 2000 saw eBay reach its first transition. After 4 years, it became apparent that demand for collectibles was not limitless. Collectors are a finite number. When most of them are on eBay buying and selling, the term "rare item" takes on a new meaning.

Before eBay "rare" meant something a collector seldom ran across. Since eBay, rare means just a few were up for sale this month.

An item that's "scarce" is usually available from 2 or 3 sellers a week. Common collectibles are available from hundreds of sellers all the time.

The result is that an eBay a SEARCH of SOLD sales is the world's best source of market value. It's far better than an appraisal; it's a report of actual prices realized with a description of condition.

[This may be outdated] eBay archives every iota of data it ever got, and for years some of us begged eBay to make their inventory of completed sales records available for online search. Finally they did, by subscription, but it only goes back 90 days. They have the material to publish the world's best price guides but have shown no interest in it.

eBay is not someone's hobby, though it began that way. When it became a public company on September 24, 1998, the power to control eBay was transferred from founder Pierre Omidyar to a board of directors. The focus moved from pleasing users to pleasing investors.

Founders have heads and hearts; board have only heads. The founder was concerned with eBay as an auction venue. The board is concerned with eBay the profit maker. eBay now has fingers in many pies.

eBay hasn't turned its back on small users. There are too many million of them for that. But the emphasis has changed. Rules are looser for large clients, for Power Sellers, for its ever-growing list of "partners" some of whom make our Internet lives annoying, even dangerous.

How many partners? We'll never know, but when I last checked, an eBay login sets 30 cookies, the most of any site on the web. A simple SEARCH sets 13 more eBay cookies plus 2 by the dreaded Doubleclick. Make it a search for completed auctions and eBay sets 23 more cookies, and 2 more Doubleclicks. If any firm wants to buy tracking info, eBay has it all. They analyze every move you make. "Forget privacy, ye who enter here."

eBay owns on-line auction services in most major e-commerce countries but they are not integrated. International selling can still involve knowing the language. And if a problem arises with a sale you made through ebay Germany, for example, ebay USA will insist it cannot help.

Erasing that bar carries enormous potential. eBay US is available planet-wide on the Internet but only about 12% of the world's population knows enough English to participate. That's 770 million. The other 5.6 billion can't read to bid.

Just about everything at the site creates income to eBay. eBay keeps the auction entry fees even if things go bad between buyer and seller. There is a commission refund policy sellers can use if a sale falls through, but it's a grain of sand lost from the beach of eBay income.

The vast majority of users have no problems. Miscreants target easy victims where easy victims are the rule rather than the exception.

Beyond the fraud-rife areas the main risks are the same as they are for absentee bidders in a live auction: inaccurate item descriptions, shill bidding, and people interpreting terms like "excellent condition" differently. And as in a live auction, when absentee bidders win, some auction galleries inflate shipping charges.

If there's any doubt about the cost of S&H or the condition of an item, eBayers email sellers before bidding and ask specific questions. The wise customer never bids until a satisfactory answer comes. While it's possible to withdraw a bid before an auction closes (never after,) it's bad form and users can be suspended for over-doing it.

One safety net that sounded good in theory turned out to fail in practice so it's been dropped. Called Escrow, it's a service that after the auction closes, allows the buyer to examine and approve the merchandise before his money is sent to the seller.

Escrow leaves sellers wide open to swindlers so it's seldom used. Here's an example.

A seller offers a rare $2000 vase in perfect condition. Someone sees it who also owns that vase, but hers has a crack so it's worth only half as much. She buys the good vase using Escrow, tells the Escrow company the vase is cracked, keeps the good vase and ships the seller the cracked one. Escrow returns her money to her.

The seller can begin a long, time-wasting legal process but he will only throw good money after bad. If he gets to court he will not be able to prove he shipped the perfect vase he pictured in his auction. It's impossible to prove he didn't own two and shipped the cracked one. End of case. Seller loses his $2000 vase due to Escrow.

eBay once tried to force Escrow on its sellers. It's an illustration of eBay company culture: they make decisions if someone likes the idea. eBay's boilerplate still suggests using Escrow, a specific one they like, as if that mattered. Whoever itches for Escrow can't grasp how it fails.

Auction shilling is a constant problem. A seller with multiple eBay accounts can bid up his own auctions with little chance of being caught. It used to be that users looking for shillers were an important source of eBay crime detection. In one notable investigation by an eBay user, one seller was found to have more than 400 bidding accounts to shill with.

Ebay's reaction? The tool for users to find shill accounts was removed from the site.

The next year shillers got two more breaks. It became grounds for suspension to reveal a shilled auction on an eBay chat board. And to report shilling to eBay became an intricate multi-step process.

The message is clear; they don't want to know. Despite its "No shilling" rule, eBay loves shillers. Why not. The higher the final bid, the higher the commission, the more wealth flows to eBay and the happier the investors.

Also the happier the sellers. Ebay does nothing to prevent a store clerk from shilling the bosses auctions and vice versa, so long as they log on to eBay with separate accounts.

Far and away the reason hanky-panky goes on is the failure to verify and authenticate registration information. I suppose it reflects our American heritage that the white collar crook has a place in society so long as he keeps to it and rocks only small boats.

Shill bidding means higher eBay commissions. Swindlers and con artists pay their monthly eBay bill like anyone else, until the month they vanish or get too ambitious and some DA indicts them. It happens occasionally.

It's that business model - saints and sinners alike boosting the bottom line - that made eBay the hottest IPO of 1998 and required the services of 4 brokerage houses to bring the stock to market. Wall Street, itself the poster child of the saints and sinners business model, saw fit to boost the stock price 197% the first day.

What "pilferage" eBay has is mostly sellers who cheat by pricing items at close to nothing to avoid commissions, and charge whopping shipping fees instead. One seller sold carpets for $1 and charged $150 and up to ship them. So ebay charges a commission on shipping fees now, harming the 90%+ good sellers and all the buyers so they can collect fees from the cheaters.

Of course aiming for the guilty and harming everyone is how the US always solves its problems.

eBay bought the popular online payment scheme, PayPal. Paypal allows any seller to take credit and debit card payments without having a merchant account. The fee for using PayPal is based on the total amount bid + S&H. These aren't nickels and dimes. eBay paid $1.5 billion for PayPal when it became available, lest Microsoft snap it up. Microsoft owning PayPal would have been a spider in eBay's bed.

eBay doesn't reveal its collection rate but its structure makes it pretty tight. They post bills electronically to the auctioneer's credit card, and the majority of sellers pay that way. If you want to hold auctions in the future you make sure the monthly bill is paid.

eBay's charge to use it rises steadily to meet the demands of investors. They are obesely profitable but investors demand profit growth year after year after year. That's capitalism's curse. If this years growth in profit isn't obscenely high, the stock price falls and eBay executives are replaced.

eBay doesn't use the term "commission" anyplace on the site. They call commissions "Final Value Fee." Most states have laws requiring a license to collect auction commissions. To avoid clashing with the law, the word "commission" doesn't exist at eBay.

eBay has a flat fee for cars, trucks, RVs, motorcycles, and similar conveyances. The vehicle business requires a license, eBay doesn't have one, so they can't charge a commission based on value.

eBay segregated its motor vehicles into a satellite auction site called "eBay Motors" and gave it a completely different look. A smart idea, the car business being what it is. They even paint black bands across the top and bottom of the screen, a suggestion of armbands used in mourning perhaps.

I'm partial to eBay Motors. I bought a vintage Mercedes 450SL there sight unseen, and eight years later sold it there. Great car, good price both times.

I also bought the worst turkey of my life there, a beautiful Isuzu Trooper RS with a totally rotted frame. Nothing could be done. The bastard who didn't reveal the car's condition was in Milwaukee and I'm in Virginia. So I stick pins in a VooDoo doll named Terry Swagger.

Another time, a car I was high bidder on was mis-represented. When I went to get it, the Check Engine and Check Transmission lights were on when I'd been told they weren't. I canceled the sale and came home. You can do that on ebay, cancel car sales. It's part of the contract.

Like automobiles, real estate also has state licensing issues, so there is only a flat fee to list realty. The law prevents them from charging a commission for real estate no matter what euphemism for commission they use. But watch out. eBay has acquired realty brokerage licenses in 43 states. [Could be more since I checked.] What's up? I smell plans to create a national Multiple Listing Service with fees based on the property asking price.

As a retired real estate broker I see that as exciting marketing, especially if they had a listing category for 1031 tax free exchanges.

One victim of eBay's blow-out early growth was their on-line Help desk. eBay had to close down the best online Support system in cyberspace due to endless horrid people venting complaints with no self-control. Some folks, grannies included, go ballistic and abusive behind an alias.

It's important to realize that eBay has a number of borderline dysfunctional users unable to understand everyday concepts and unable to cope with disappointment. That's a downside of easy access.

"A bidder on my auction emailed me a question. What should I do?" was an actual query to live help from someone unable to conclude he should answer the question. And perhaps unable to read? In 4 or 5 places eBay takes pains to tell users to ask sellers any questions they have before bidding. This cretin couldn't make the connection.

I checked his feedback. He was not a newcomer. He had participated in more than 200 eBay auctions. As Pierre designed it, utter stupidity is no bar to buying and selling on eBay, or making a living.

eBay's original live help forum was designed with that in mind. No matter how inane the question, no matter how angrily it was expressed, no matter the same question was answered 5 times in the previous 10 minutes, the response was polite and respectful.

It didn't work. Too many jerks. A core of callous, shallow, inconsiderate, immature, and deliberately cruel users pummeled the support staff into tears in January and February of 1999 and killed the live help desk. It's useful to remember those users are still on eBay buying and selling.

eBay paid the jerks back in the usual American way. To punish the bad, they punished the good. They created the most useless on-line HELP in cyberspace. Enter a query and back will come dozen after dozen topics having nothing to do with the query. The only thing as useless as this is Amazon Search, but at least the first page of responses on Amazon relate to your search. Not on eBay.

On-line help now comes from discussion and chat boards manned by experienced users, and forums hosted by staffers. These are a great resource. No other online auction site has this interactive community. It sets eBay apart.

When you have a particular problem, Ebay will arrange to phone you from some place far, far away. But they are well-trained, and nearly always available.

They used to have email support but it was pay-back for the way jerks treated them. Incompetent beyond belief. It's like the staff was instructed: "Don't read the message, just find the first key word and send a macro in reply. Meet your quota." Or maybe AI, Moron Grade?

Something else that set early eBay apart was the use of focus groups to discuss ideas. Called "Voices," the groups served as a sounding board on site performance, new ideas, and coming changes.

Periodically a dozen or so active users were flown to San Jose to be wined and dined and have a full day or more meeting with eBay staff including the CEO. In September of 2000 my wife and I were part of Voices 7. PBS filmed that Voices group and all of us were on national TV.

eBay loses no sleep over discipline. At the point when eBay must crack a whip it's handled by email. At that time users learn eBay isn't their mother. A decision is made, action is taken, and you learn of it afterwards in a no-nonsense email.

If an auction is entered that's against the rules, eBay closes it and tells you why. If a user sends unsolicited commercial email qualifying as spam, he's warned not to do it again. If someone makes a pest of himself on the chat boards, he loses access.

There are more than 100 other auction sites on the Internet but eBay has no serious competition. They are a whale swimming with minnows. eBay has more sales per hour than most auction sites have in a year.

This can be demonstrated. There are on-line services that search through all the on-line auction sites for an item you're looking for. Try any item and see where most are found. If the item is allowed on eBay, eBay will dominate the search results.

Auctions A - Z
Auction Watch
Internet Auction List

Everyone who tries on-line auctions reports that if they want buyers, they have to be on eBay. If they're looking for tens of thousands of individual sellers eBay is the only place to find them. If they want to find a collectible, only eBay is where they can choose among, for example, 10 or more vintage Zenith Trans-Oceanic tube radios every week, week after week.

There's nowhere else on the planet to find that range of items. In all categories it allows, eBay has a lock on lookers, sellers, and bidders.

One exception to alternative sites is Teletrade where coins are auctioned. Teletrade is a veteran auction site for coin dealers that opened to the public. It's safer than eBay because items are examined by Teletrade staff before they're allowed to be graded and auctioned, and Teletrade does the shipping, not the seller.

There are also auction sites for items not allowed on eBay. eBay lists 30 forbidden categories, such as guns, lock-picking devices, postage meters, etc. and scores of "questionable" categories. Some perfectly legal items like show dogs are forbidden because eBay culture objected to them. There are excellent auction sites on the web for most of those categories.

eBay has tough competition for book auctions from Amazon. In some ways Amazon is a clone of eBay but a 2nd generation clone. They copied much that makes eBay easy to use, and added powerful listing enhancement features eBay doesn't have.

These include a half-dozen low cost ways to promote an auction. These are effective for sellers and lucrative for Amazon. If eBay tried to copy this, its army of cretins would go ballistic over yet another feature they can't understand.

Amazon book auctions don't have as high a success rate as eBay's, but an unusual book that didn't sell or bring its Reserve on eBay will sometimes sell on Amazon because of the target audience. Amazon is also a good place to sell the just average books and videos rather than get embroiled in half.com, eBay's mismanaged stepchild.

Using Amazon AND Ebay to best advantage as a shopper

There's a family birthday coming up and someone wants a popcorn popper. You go to Amazon where every popcorn machine coming off an assembly line anywhere on earth is offered for sale. You read the reviews from past buyers and discover that each popper - every one - is crap.

They all suffer from the same flaw. No matter the brand, no matter the price, they are all Pacific Grim.

But keep reading reviews. Eventually you will have a list of "Gee I wish I had my old one" that names names and models. If you're lucky, and 9 times out of 10 you will be, maybe a half-dozen people will have cited the same machine of 30 years ago as the best that ever was.

On any given day ebay US will have over 5,000 popcorn poppers for sale, 1000 of them used ones. Of the used ones, 10 to 50 will be that one called the best that ever was. Several of these will be only slightly used. You might even find what I did, a NOS in the box Wear-Ever Popcorn Pumper 73000, the best air-blow popcorn popper that ever was. 30 bucks included shipping.

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