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The BEST ebay insider file on the Web

Last updated July 2018.

One of ebay's early users. I began selling there September 1, 1996.

eBay's Structure and business model may be the best on the internet for investors, but only so-so for users. Its banking partner, PayPal, can be a poisonous snake in your bed.

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 is a 2018 update that began as the first-ever blog about ebay, back in the 1990s. It gave Wall Street investors the inside information they relied on to make ebay's initial public stock offering one of the first Internet blockbusters. It opened at $18 and closed that day 163% higher. I never bought any, so what's here comes from the head, not the wallet.

There's a lot about ebay I don't know. I can only put here what I do. It's probably more than most people because I've been on the site more than 8,000 days.

eBay is the People's Auction Site where granny in her kitchen - and the most knowledgeable antique specialist - and businesses selling to businesses - 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 a platform for everyone in the world to hold his own on line auctions.

It changed from the way it began. For the first years Ebay ran a vast mall with eBay the landlord having an unlimited number of stalls to rent, each stall an auction run by a user. Some user held a few sales a year, some a few a week, and some have 5000 or more items listed every day on eBay.

Sellers ran the auctions; ebay ran the mall. But that changed. The mall pattern is history. Now ebay exerts control over the auctions, far more than setting ground rules to sell at the site.

For example, if you want to use ebay's software to print a shipping label, you are forced to buy a signature receipt. No option.

This is a con, of course. Every experienced mailer knows that 9 out of 10 "Signature required" parcels are delivered and never signed for.

Does ebay profit from this? We don't know details of any kickback from shipping companies but we know ebay charges a commission on the shipping bill, and that includes the worthless signature charge.

Each auction earns eBay a fee. They add up. And up. And fees go up and up. What began as a value-priced service run by people who cared about building ebay, went public and is run now by investors from Wall Street concerned only with increasing the percent of profit every quarter. Ebay is hugely profitable but investors punish stagnant profits no matter how large. Investors buy into greed is good.

So now the charges are what the traffic will bear.

The hand of the buyer-oriented founder, Pierre Omidyar, is still evident in what I call "The Omidyar Plan" for dealing with sellers vs. buyers. Ebay/Paypal has become famous for taking the word of a first-time buyer from anywhere in the world who says he was not sent his item, over the word of a long-time, reliable seller with an exemplary track record, who has proof he sent it.

Ebay/Paypal removes the money from the seller's account and sends it to the buyer, while still charging the seller a commission based on that amount. And it appears that the Staff is forbidden to deviate from this or investigate in any way.

There is a site called http://www.paypalsucks.com loaded with horror stories earning Paypal the description a snake in your bed. Since it isn't a chartered bank, it's not governed by banking laws and does what it pleases. Example: it's user policy asserts "... to the fullest extent permitted under applicable law, you waive your moral rights and promise not to assert such rights against the PayPal Group, its sublicensees or assignees."

Your legal rights were already waived and replaced by a commitment to arbitration which is shooting craps against loaded dice. Consider this inside information: the Better Business Bureau trained and licensed me as an arbitrator.

Paypal is a money handler, an intermediary, not an agent. Sites like Macys or Walmart let buyers pay them using Paypal. Their reputation in this is good. It's only when Paypal partners with ebay that life can become hell, such as all of a dealer's capital tied up for six months with no explanation except "you agreed to this when you signed up."

Ebay's partnership with PayPal is supposed to end in 2020.

Affecting all users of ebay is another intrusion of the pro-buyer, anti-seller Omidyar Plan. While SELLERS are feedback rated on every sale as Positive, Neutral, or Negative,

BUYERS must be rated Positive. There's no other choice for rating buyers: no Neutral, no Negative.

Since the reputation of a user is measured by his feedback score, the Omidyar Plan made Buyer ratings not merely pointless, but misleading. The most horrible buyers all have perfect ratings. Ebay urges sellers, but doesn't require them, to contribute to the deceit by leaving feedback for buyers.

For very large sellers the feedback program becomes sleight-of-hand mathematics. A seller with 100 or 200 negatives a week for selling mis-represented crap can have a higher rating than a small seller with a perfect sales record but two neutrals due to slow post office delivery. The magic comes from weighing total feedback numbers, not just the bad ones, to enable high volume sellers to hide poor performance. They are ebay's cash cows, and Wall Street wants them contented.

A seller's 99% rating might hide 200 negs a week or even more because he has thousands of sales a week. Experienced buyers can examine feedback records to find out.

"The Omidyar Plan" penalizes sellers by filling your auction page with your competitors. Search for an item, land on a page selling it, and ebay adds pictures and links to competitors selling the same item. Ebay got that idea from Amazon.

Who won't see that? Sellers looking at their own listing. They won't see the competitors on their page but everyone else will. It's betraying sellers to favor buyers.

In an attempt to monetize everything, ebay is willing to cross lines others don't cross. They charge a commission on the cost of shipping, which might be illegal, but they do it. If sellers don't over-charge buyers to make up for it, or build an overcharge into the price on fixed price items, sellers lose money on shipping.

Ebay now interferes in ways mall landlords never do.

For example eBay tries to forbid auctioneers from accepting checks in payment. Almost surely illegal, but they try. It increases business at PayPal which skims the payments. That gives ebay its second skimming of the delivery charge.

EBay tells judges and juries that it's role in 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.

No longer true. Ebay is not the absentee landlord it was, and for the better. 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.

The word "commission" is no where on the site. Ebay calls commissions "final value fees." Why? In most states, an auctioneer's license or other recognized certificate is a requirement to earn a commission and ebay isn't licensed.

In the real world, a "Fee" is a set price, like the cost of a ticket to ride a roller coaster. A "Commission" is a percentage of the cost of the item. Courts have let ebay and other online auction sites term their variable charge a "Final Value Fee" to keep the online auction industry legitimate.

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 $5, 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, Walmart children's clothes for more than it sold for new, and then paying to ship it. It's either that or drive the family buckboard 75 miles to the nearest Walmart.

At the other end eBay offers million dollar paintings, $10,000 Tiffany lamp shades, multi-million dollar collector cars, real estate, and 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, $2 yard sale crockery 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 a trailer park in Ohio where it came from. Thousands of Americans flock to eBay for artless baked dirt 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 personal example: at auction I sold a stack of 10 Edison phonograph records from the teens. 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.

Ebay has folks building or dismantling collections of anything you can name, from expensive objects d'art that cost a fortune when new, to ten cent comic books and Omidyar's beloved Pez dispensers most people threw away - until ebay. Or counterfeits. There's plenty of old-fashioned fraud mixed with new-fashioned fraud.

Ebay's guarantees can help. Since foregoing the mall manager paradigm, ebay now guarantees items will match their descriptions.

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.

It's a fact that 90% of all sports autographs are fake. The FBI ran a sting in LA in partnership with CBS news and that's what they found: 90% of sports autograph sales are frauds.

Some auctioneers, like me, guarantee the authenticity of what they sell. If it's bought from me and ever found to be not authentic, I'll buy it back. So far that's been zero items.

There are swindlers leading lambs to the slaughter by offering new computers, costly software, and cruises to exotic places at prices too good to be true. When anything is too good to be true it's a swindler offering it. Because of ebay's guarantees we see less of this now. That's a big improvement.

There are 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, and a few do.

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

Ebay is international, and across the world today nearly every antique store is connected with the Internet, and buys and sells on ebay. eBay produces far more sales for them than foot traffic.

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, location, 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, for better and for worse.

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 because so many are selling it.

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. Demand was satisfied before supply was exhausted.

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 way 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 ebay can no longer move, like vintage LIFE magazines. They need to reach people NOT on eBay.

For some sellers the biggest problem isn't finding buyers but finding desirable merchandise. New techniques sprang up for that. Since eBay is awash with people who screw up listings, savvy buyers learned to search for misspelled or mis-described items. They get them for a bargain, then re-sell correctly 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, and some surprisingly worthwhile user-written guides.

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.

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, just a reasonable commission.

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 incomplete. 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.

eBay caters to high volume businesses but still serves individual amateur sellers. A sizable percentage of these people are disabled, retired, or isolated in rural areas 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 WalMart, an eBay transaction is with a real person, self-selected and untrained, making his own judgments. Real people are not always professional, polite, or considerate. Real people have computer breakdowns and are hospitalized and lose email and go on vacation and die, any of which can delay shipping.

In 2002, then-CEO Meg Whitman told my Voices 7 focus group that these ordinary life events account for at least 80% of the 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. Beyond 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 a buyer's 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 actual feedback of the seller, and there is only a slim chance you will not be a happy camper.

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

Not everyone in the 10 problem-prone categories is a thief or a bimbo, but so many are you take a greater risk when buying these: used clothing, sports memorabilia, and mass-produced stuffed animals. Clothing is often in poorer condition than described. Sports memorabilia is awash with fakes. Mass-produced stuffed animals will have one simpleton in the deal.

Computer categories require extra care. Broken PCs and peripherals aren't always described as broken, ebay rules notwithstanding. Shipping can be two, four, six, ten times the actual cost. Avoid price gougers; go with sellers who treat you right.

Remember the rule for happy transactions: buy from sellers with very few Negative/Neutral feedbacks. Don't go by the seller's high feedback rating. It could be masking thousands of bad deals.

Who to Trust?

Psychologists point out that we apply our personal 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 spelling out everything bad buyers might do, and threatening us. That seller is revealing himself. He's saying "This is me."

In all categories be wary of those who flaunt religion. Any mention of God or Jesus is a red flag 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.

Boilerplate -- 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 can place a secret limit on what they will pay for an item, then let ebay software bid for them. 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 bid. All auctions expire at a fixed time. Last second bids do not give the auction extended life.

Sophisticated bidders will watch an auction's last few minutes and enter their top limit toward the close, often in the last 5 seconds. I wouldn't bid any other way. 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 protection against sniping is setting a proxy limit that really is your maximum. If you lose, it's because the bidding went higher than you were willing to pay.

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 pay more, not tech issues.

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 late 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 live 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 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 unless they make a habit of it. Sellers can put bidders on their Bidder Block list if they can find it and understand how to use it. Pro-buyer Ebay buries this function.

To succeed on eBay Sellers need only describe their items honestly, respond to email, pack with care, and ship promptly when they get paid. Creator Omidyar found the way for anyone -- from world-class salesman to dunce-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 search of SOLD items is the world's best source of market value. It's far better than all the appraisal guides in the world. It's a report of actual prices realized in a competitive venue with pictures and a description of condition. And does it ever unmask those inflated appraisals on PBS's Antiques Roadshow!

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 representing only the investors. The focus moved from pleasing users to pleasing stockholders.

Founders have heads and hearts; boards have wallets. The founder was concerned with eBay as an auction venue. The board is concerned with eBay as cash cow. They put eBay's thumb 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 stalker Doubleclick. Make 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."

To its credit, ebay has never been accused of the gross privacy transgressions that underlie Facebook's business plan.

eBay has an on-line auction presence in many countries and they are finally integrated. International selling may not require buyer and seller to share a common language. Ebay translates automatically. I regularly sell vintage LPs to buyers in Japan and my knowledge of Japanese is zero.

eBay USA is available in English 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 6 billion or more can't read to bid without ebay translations.

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 live auctions when absentee bidders win, some sellers 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 gone. 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 one fourth 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 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, due to its company culture favoring buyers, once tried to force Escrow on sellers. eBay's boilerplate might still suggest using Escrow at a certain escrow providing site that probably kicks back. Whoever itches for Escrow is ripe for plucking.

Auction shilling is always a threat. Shilling is when the seller or his agents bids to get the price up. It's "forbidden," but a seller with multiple eBay accounts can bid up his own auctions with little chance of being caught.

Can you tell when an auction is being shilled? For one thing, the seller usually pays extra for ebay to highlight or feature it. For another, it breaks the bidding pattern. Most ebay 7-day auctions attract bids in the last two days of bidding, three at most. Shilled auctions begin getting bids right away.

At one time that activity would raise a flag, back when 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 on the excuse "that's our job." There is zero user oversight now.

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 close to impossible.

The message is clear; they don't want to know. Why? Investors again. The higher the final bid, the higher the commission, the more wealth flows to eBay and the happier the stockholders.

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. It reflects our American heritage that the white collar crook is tolerated in society so long as he knows his place and rocks only small boats.

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.

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 a saints and sinners business, saw fit to boost the stock price 197% the first day until it simmered down to close up 163%.

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 monetized this by charging a commission on shipping fees, harming good sellers and all the buyers just so they can collect fees from cheaters. They could easily use bots to find and cancel cheater sales, but that isn't lucrative.

eBay bought the popular online payment scheme, PayPal. Paypal allows sellers to take credit and debit card payments without having a merchant account. The fee for using PayPal is based on the total bid + S&H. These aren't nickels and dimes. eBay paid $1.5 billion for PayPal when it became available, lest Microsoft or Google or Bank of America snap it up. They would have been the spider in eBay's bed. Last I heard, 44% of ebay's income came from PayPal.

Later ebay spun PayPal off and it had an IPO bringing $46.6 billion. More stockholders to please. In 2018 ebay announced that it was creating a successor to Paypal by 2020 when contracts expire.

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 continue to hold auctions, you pay your monthly bill.

eBay's charge to use it rises steadily to meet the demands of investors. They are obesely profitable but investors demand profit growth quarter after quarter. The greed tainting capitalism. If they don't meet stockholder goals, executives are replaced.

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 commissions.

eBay segregated its motor vehicles into a satellite auction site called "eBay Motors" and gave it a different look.

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 rusted out 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 and hope his food truck acquires ptomaine.

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 despite auction photos showing them not on. 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 have 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 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 the American way. They punished everyone. They closed online help and replaced it with telephone support and discussion boards.

On-line discussion boards and forums are manned by experienced users with staff as silent observers. These are a great resource, and the only way to let ebay know they have an in-house problem. Telephone support has no instruction sheet for this that I found.

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

Once upon a time they offered email support but it was incompetent beyond belief. They used bots to find a cue word and send a stock response. To answer that put you in the Internet Help Desk LOP - loop of frustration.

[You have spent a LOT of time reading this essay. Not many will. From this point I'm probably writing just for you.]

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 proposed 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 2002 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 disciplining users. 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's gone.

There are more than 100 other auction sites on the Internet but eBay has no serious competition as a generalist, although there are specialist auction sites that are every bit as good as ebay in their limited field. For example, GunBroker.com for firearms, a category ebay will not allow to be sold. Etsy for cottage industries, now a healthy rival. But ebay is the whale swimming with minnows. eBay has more sales per hour than other auction sites have in a year.

This can be demonstrated. Do a google search for any item. See where most sales are found. If the item is allowed on eBay, eBay will dominate the search results. It will also dominate the search results no matter what you search for. Try Googling flounder. "Find great deals on eBay for flounder and flounder costume. Shop with confidence." Ebay has a deal with Google to return faux finds on nearly everything.

Everyone who tries on-line auctions learns that for variety of items, ebay stands alone. For layer upon layer of potential buyers, ebay stands alone. For Internet auction dominance, ebay stands alone.

Choosing one of my categories, if you want a vacuum tube Zenith Trans-Oceanic shortwave radio (and who doesn't) go to Ebay. All 780,346 of them were manufactured before 1966 but on any given day in 2018 there will be a dozen or more for sale on ebay. Using the SOLD function, ebay reports today that 78 of these 29 lb luggables were sold over the last few months.

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

Another exception to alternative sites is Teletrade where coins are auctioned. Teletrade is a veteran auction site for professional 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. But for slabbed coins, the ones sealed in plastic and graded by professional services, ebay shares the honors.

There are also auction sites for items not allowed on eBay. eBay lists 36 forbidden or controlled categories, such as firearms, lock-picking devices, postage meters, "adult" things, etc. Some perfectly legal items like show dogs are forbidden because eBay culture objected to them. There are online auction sites for those categories.

Using Amazon AND Ebay to best advantage as a shopper

Dad's birthday is coming up and he 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 without exception is crap.

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

But keep reading Amazon reviews. Eventually you will read a bunch of "Gee I wish I had my old one" and it will give name and model. If you're lucky, and 9 times out of 10 you will be, someone will be selling the best popcorn popper of all time on ebay for half the cost of Pacific Grim. That's how I got mine.

Amazon doesn't do vintage so don't waste your time. This is ebay territory.

On any given day ebay will have over 5,000 popcorn poppers for sale, 1000 of them used. Of the used ones, 10 to 50 will be the one you're looking for. 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 of all. 30 bucks including shipping.

Warts and all, I do love ebay.

As a reward for your reading endurance, here's a parody of famous ebay acronyms and descriptions from my award-winning Acronym page.

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