Here’s something that makes me feel old: eBay informs me that I am a Member since: Feb-15-99 in United States. The girl who occasionally looks after my son in the evenings wasn’t yet born when I bid on my first online auction. I can’t remember what it was, but I’m reasonably certain it was a part for a BMX bike.
Three hundred and fifty-eight transactions later, including three serious disputes, a $42,000 car purchase that went perfectly, a $5,000 car purchase that went to Dispute Hell, a $51,000 car sale that originated on the site but completed elsewhere, and a considerable number of interactions with hugely unpleasant people later, I’m still here. I’ve seen the site go from fundamentally being the Wild West to being a seller’s paradise to being a buyer’s paradise to the current state of affairs, which completely and totally sucks.
The most important thing for you to realize about eBay and its management is this: eBay hates auctions. I know, it’s crazy, because they are nominally an auction site. However, from about 2002 forward they have been steadily and continuously pushing their sellers towards a fixed-price model. It started with “Buy It Now”, a concept we take for granted now but one which simply does not exist at a true auction. You can’t go to Christie’s and “buy it now”, but eBay will make that “feature” available to you for ten cents or so.
After that, we got “seller stores”, which can contain auction items but which are really meant to contain vast numbers of fixed-price items. Then eBay started raising the fees associated with reserve prices, along with many suggestions-via-email to the seller base to add “Buy It Now” to everything.
The reason for this is easy to understand: “Buy It Now” items incur far fewer calls to customer relations hotlines than auction items. eBay has made numerous steps to prevent shill bidding but it still happens, as I discovered when I hopped in on the bidding a few years ago on a Mercury Marquis coupe. There had been over ninety bids in the first three days. I put ten bucks on top of the highest bid so far… and all activity came to a sudden halt. Seven days later, I was an owner. I went through the trouble of investigating the bidders, a process which eBay has now made virtually impossible, and determined that there had been precisely two legitimate bids on the car: one for $1,000 and one for $1,050. The six bidders between $1,050 and $5,100 had put in dozens of bids, but none of the bidders were legit.
I refused to buy the car. The seller threatened to sue me. I told her I’d ask eBay to investigate it for shill bidding. She re-listed it with a note that “RE-LISTED DUE TO NON-PAYING BIDDER JACK BARUTH OF POWELL, OH.” I sent her my notes on the six bidders who had pumped up the price. She canceled the auction. She did, however, ask a question that I thought deserved an answer:
“Why do you care if the other bidders were legit, if you were okay with paying $5,000 for the car?”
“Because,” I responded, “I need to know that there’s somebody out there who might pay me $4,500 for it if I decide to sell.” That’s how you determine resale value in the auction world: the best losing bid from a motivated, legitimate bidder. In this case, it was $1,050. That was a nice by-product of the auction process back when eBay listed bidder information: you had a sense of the secondary market for whatever you’d just bought. In the end, eBay had to anonymize feedback and purchase information to protect the people who were buying pornography and sex toys and various other under-cover-of-darkness stuff. Or so they said. The fact is that eBay has never cared about your privacy. They can and will disclose everything from your home address to your bank account information to third parties. The purpose of anonymizing bidders was to ensure that if you resold your item, you’d do it through eBay.
Many subcultures use eBay as a means of communication, including a particularly vigorous group of people who photograph themselves nude in the reflections of common household items which are then listed for unrealistic prices. It’s virtually certain that people use auctions to discuss sensitive or private matters anonymously; I’ve seen plenty of photographs of random text inserted into auctions and/or odd characters in listings. eBay is a steganography paradise. It’s one of those rare sites that arouses no suspicion in anyone, since everybody goes there at one point or another, from quilting moms in Minnesota to oil oligarchs in Russia. A friend of mine who does “black bull service” for bored housewives has told me that eBay auctions for male underwear are often used to arrange liaisons, particularly of the pay-for-play variety.
There’s something hilarious and interesting about the way in which eBay and its sellers attempt to beat each other out of money. The listing fee for cars keeps increasing, because eBay knows perfectly well that many brokers and individuals just use eBay to get eyeballs. “CALL 1-800-555-0000 FOR A WALKTHROUGH ON THIS CAR” means “Call me to negotiate price and take eBay out the equation.” The same is true for high-end guitars: “CALL 1-800-555-0000 FOR AN IN HAND DESCRIPTION OF THIS GIBSON R9” means “Call me directly and let’s negotiate five percent discount for you and seven percent additional profit for me.” Any day now, eBay is going to put some kind of weird cap on listing high-value items in high-reserve auctions to prevent these shenanigans.
And the price keeps going up, with no end in sight. The max Final Value Fee for a lot of items is now $250. Once upon a time, the sale of a two-thousand-dollar guitar would cost you $100 or so plus 2.5% for the near-mandatory Paypal: $150. Today you’ll pay $256 minimum, plus a charge on shipping. For years, shipping was exempt from Final Value Fee, so sellers sold items for a dollar with $500,000 shipping charge. So eBay started charging a fee on shipping, which caused legitimate sellers to take a loss on shipping, so they started overcharging for shipping. This in turn retroactively justified eBay’s actions: see, everybody charges more than actual value on shipping!
Which takes us back to the image above. I bought two guitars for the basement collection. The golden one was a pretty fair price in the current market, and the shipping is about net fair since it costs $30 to ship most guitars around the country and eBay now takes their cut. The second one, the natural wood one, is the completely unloved X135NA, a total albatross in 1984 when it was new and in 2013 when it’s old. Nobody wants a single-pickup guitar in natural ash finish with an indifferently-constructed tremolo. Still, at $150 it was worth socking away somewhere, since it contains at least $150 in parts. The neck’s worth something, the pickup’s worth $75, the knobs could go on a restoration project for a better Electra guitar. Think of it as an unloved street Ferrari being used for a GTO restoration or something.
I was pretty sure it said “free shipping” when I checked the auction, but I was clearly wrong. What it must have said was “shipping calculated”. My failure to look at the auction clearly before “throwing away” $150 meant that the seller was free to juice me for an additional sixty-eight bucks. I guarantee you that this will show up light-packed in the smallest possible box for an actual shipping cost of maybe $22. So that’s $44 of profit because I didn’t check carefully and skip the auction, which I would have done.
So, I am the idiot here.
But on the other hand… this guy got $215. He paid $22 to ship it, so he’s down to $196. eBay charged him $22 Final Value, so he’s down to $171. Out of pique, I used a credit card linked to PayPal to pay him, so he’s out another seven bucks. $164 total. He’s not exactly cleaning up. If he’d put the same amount of effort into a Craiglist sale, he could have gotten $175 or even $200. Perhaps the answer is that we’re both idiots for dealing with eBay instead of working with a better auction site, or Craiglist, or something else. When it comes to eBay,
The only way to win…
…is not to play the game.