EBay’s Real Problem – An Erosion of Trust Between Buyer and Seller

25 Jul

You’ll have to excuse the following rant.  I know I promised not to do this, but it’s just so fun I can’t always help myself.  I intended to write about how to return an eBay item and that is my next planned article, but I think the following will form a solid foundation for exactly what I’ll be talking about.

The biggest problem with eBay is inherent in its construction.  It has always existed.  It will always exist. The problem isn’t Paypal, it isn’t CEO John Donahoe, it isn’t Ex-CEO-Never-Gonna-Happen-For-Governor Meg Whitman, and it isn’t whatever new policy is currently being touted as “the worst ever.”  The problem with eBay is that it’s impossible to trust whoever it is that you’re conducting business with.  When I say “impossible,” what I mean is that you shouldn’t trust whoever it is you’re dealing with on eBay.  I’ve had the following conversation with people at least five or six times:

josh@auctioncope.com: “My suggestion is to never buy anything on eBay.”

Person 2: “Why?  Isn’t that what you do?”

josh@auctioncope.com: “Imagine the person you trust least in this world.  Now imagine you don’t know them, they live 1,500 miles away, and you just sent them $700 with a service you can’t even begin to understand.  That’s eBay in a nutshell.”

I think eBay is beginning to realize that people don’t trust eBay.  I don’t mean sellers can’t trust eBay or eBay is an evil company.  What I mean is that people don’t believe eBay.com is a safe place to go to spend their money.  This is why eBay has been bringing in Buy.com, General Motors, and offering those “Daily Deals” every non-featured seller hates so much.  EBay is trying to boost confidence and regain people’s trust by offering products from companies and sellers that it knows will deliver the item as advertised.

To further my point about trust, two weeks ago eBay tried a new stunt.  They put a huge “flash sale” banner on the eBay homepage and an icon on the navigation bar with a link to an eBay store run by “ideeli,” who only had 22 feedback at the time.  Many sellers were up in arms over what they considered to be gross preferential treatment and hypocrisy.  After all, how could a seller with 25 transactions be featured on the eBay homepage while sellers with 50,000 feedback are buried in “Best Match” search?  Read the full story at Auctionbytes . The bottom line is that eBay checked out and trusted ideeli to follow through with their promise to supply buyers with low prices, offer free shipping, and provide great customer service.   In fact, I’m sure there was a lengthy contract signed by ideeli that this is exactly the service they would provide.   This is, after all, precisely how eBay wants every seller to behave.  The unfortunate reality is that low prices, free shipping, and great customer service are rarely achieved in any business environment, let alone a relatively anonymous auction website.

EBay’s answer to the “trust problem” has been an increase in eBay suspensions and Paypal limitations.  If anything, these suspensions and limitations cause sellers to go “underground,” registering with fake information and resorting to shadier selling practices.  Once a seller loses their account and is forced to reregister under an alias or family member’s name, there is much less at stake for the seller.  With relatively little to lose, the motivation for doing a good job decreases as sellers become less interested in providing services they once were proud of.  Furthermore, many sellers (and buyers) on eBay operate numerous UserIDs.  It is not uncommon for a seller to operate a dozen or more accounts at the same time.  I recommend registering multiple IDs in a number of my guides because if something happens to one account – like a negative feedback or unauthorized listing removal – it is easy to switch to another account without those problems.  Although this might be good for the seller in the short term, it certainly doesn’t make the eBay marketplace any safer.  Imagine if Enron could have just switched their name and continued going about doing business in the same exact fashion without anyone knowing they were the same company.  In essence, this is exactly what eBay is allowing sellers to do every day of the week.

How Can eBay Regain the Trust of Buyers and Sellers?

Luckily, this isn’t my problem and it would be a waste of time to go on about all the changes I think eBay should make.  Plus, being negative all the time is a lot more fun than trying to help people or provide any answers to problems.

Until next time,

Josh

3 Responses to “EBay’s Real Problem – An Erosion of Trust Between Buyer and Seller”

  1. laurie 29. Aug, 2009 at 11:35 pm #

    wow Josh this is really good. Buyers can bid on your product and not pay for it and we can’t warn other sellers. Your reasoning sounds true. Now if Ebay had started out like Amazon selling books (a product) they have a name to back up their product. What about the auctions that is produced with amazon? I wonder if it is a psychological question — Amazon already branded and viewed as a “storefront” Ebay isn’t a storefront but has small & large businesses selling anything from used to new stuff — and all the “big name” people who started out small and grew their business have left and started new ventures…so you’re always having new people coming on board it’s like a revolving door. That’s why they’re bringing big names and brands on board — those companies people know and can trust. Ebay is not an amazon. So how can the small mom and pop businesses make it on Ebay? They can’t really. My mom did ebay to supplement her income but when the prices got too high for her to list her profit margin was decreased and she couldn’t make it on ebay anymore. Interesting Analogy. So do you think a person is better off starting their own website and advertising and building their business thus their branding?

  2. Melissa 19. Aug, 2010 at 9:48 am #

    I agree, trusting Ebay is a risk that I’ve taken 3 times in the past year and get this, I got burnt each time. I’m a buyer. I’ve tried to purchase from Ebay sellers..I feel I cover the bases, check their ratings, ensure there’s buyer protection, etc. and I still get burnt. I have had products not arrive with claim that they did, I have had products relisted without an explanation, and I was not granted a refund when a product never arrived in the mail. I always pay immediately on Paypal to ensure that I’m an easy customer to deal with but it has not served well. I’m a Canadian resident so unfortunatley many of the items I’m interested in are only available from Ebay sellers as US stores will often not ship to Canada or charge too much. If this wasn’t the case, I would stop using them completely. There has to be a lot more around buyer protection. Everything I run into is about seller protection…what a joke.

  3. terri 02. Nov, 2010 at 11:06 am #

    Seller protection is a joke. I had a buyer lilylotus52 buy software from me … and she said in her neg. rating she liked most of the software but had problems playing some of the videos … and ebay did not allow me to fix the problem they just gave her a refund … so I am out $120 … well ebay is … I closed all my accounts they have no access to my funds so collections it is … geez … I am so SICK of ebay … no seller protection BTW I had 530 feedback of 100% since 1999 this buyer had 46 with 1 negative …. good call ebay.

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