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As many of you know, I have been a fan of eBay for years. I have been active on the eBay marketplace for over a decade both as a seller, and as a buyer. For those of you who follow(ed) our Mind Your Business podcast, we even had the eBay spokesman come on last Fall to talk about becoming an eBay vendor.
Well, a lot has changed on eBay. Over the years, the pendulum has swung back and forth between favoring sellers to favoring customers at the expense of sellers. Now seemingly they've gone full circle towards favoring large conglomerate sellers (read: Chinese importers) and the platform is geared towards low margin, low cost, high volume shit sellers.
Our account with eBay has nearly flawless consumer ratings and over a decade of exceeding customer expectations, one transaction at a time. That account is now restricted by eBay. Why? We cancelled one too many orders in the course of a year. How many orders did we cancel?
Five. Out of several hundred.
But five is eBay's magic number. That's their magical determination that you're a risky seller. Never mind that 100% of the risk is on your side when dealing with unscrupulous scamming buyers that eBay has taught how to work the interplay between them and their sister spin-off Paypal. That's YOUR cost of doing business. You assume the risk. That's acceptable.
The reason for this post is to throw a cautionary flag out there to anyone that has followed my work, specifically the podcast where I endorsed them as a viable revenue channel, or the INSIDERS thread that interweaves eBay through the passive income business model.
eBay is now volatile.
I am not saying "don't sell on eBay." I would say "don't build a business on eBay." They pendulum there has swung against the smaller sellers (>$1,000,000 in revenue on eBay) and the policies in place now force you to make decisions regarding customers and risk that you might not make in your own sandbox. You can either make 100% of eBay customers happy with each transaction, or risk business suspension or expulsion over nominal infractions.
So what does it look like for us?
First, we didn't count on them too much for revenue. So on an impact scale, it hurts us almost zero (other than perhaps pride... for recommending them).
Here's what cancelling 5 suspicious transactions in a year did for us, as far as punitive penalties from eBay:
1. Our search results were suppressed
2. We were kicked out of their global shipment program
3. We were restricted with regard to how many items we could list on eBay at any one moment in time
4. We were restricted with regard to how much we could sell in $$ on eBay in any given month
So they tied our hands in those four ways, and then told us to IMPROVE OUR METRICS. Throttled sales by 90%, and with the few scraps left, told us we had a limited time to improve our metrics. LOL
We'll be one of the few companies that can survive the eBay inflicted death spiral and not lose our eBay account completely. Their rigged system is not set up for you to survive this. It's set up simply to wind things down with the promise of reinstatement in exchange for not walking away from the rest of your customers that bought things on eBay. We'll be reinstated within the next 30 days, after the previous 90 days in the eBay penalty box. I don't know if I care. I don't know if we will re-engage. Most companies when faced with what eBay did to our account LOSE their account because eBay makes it almost impossible to reverse the metrics during the restriction, and then they close your account for not improving your metrics.
So what could we have done to avoid this?
1. Sell more. eBay is now less for the dabbling seller, and more for the professional sellers. Sadly for eBay customers who like what we sell, we are the ONLY source. In our absence, eBay customers are left picking through the bones of the Chinese importers who sell inferior products.
2. Deliver every order, without question. Count on eBay and Paypal seller protections, and don't put your own safeguards in place. Drink the kool-aid.
3. Anticipate 100% compliance with making sure every eBay customer is 100% satisfied, by taking your customer service contingency accrual from the normal 1% of sales to around 5% of sales.
If we resume our activities on eBay, we will do all of the three above. eBay still claims to have 100m customers, and the customers are a different demographic than the Amazons and the Walmarts of the world.
Don't spend a ton on money building an eBay business, and don't ever build a business that is eBay centric. Use them for what they are worth, but always keep in mind like any venue, you are subject to the whims and winds that blow. It's not your sandbox, so you don't make the rules.
If you have any questions, re-read from the Millionaire Fastlane book the chapters and concepts on the commandment of CONTROL.
p.s. if any of you eBay execs read this when it comes across your Google Alerts, how about you apply some common sense to not being assholes towards your sellers? There was a day when sellers were considered customers. And a special THANK YOU to the eBay executives that I promoted FREE on the radio to thousands of entrepreneurs, who when I simply needed someone to look at this from a rational standpoint chose instead to kick me in the nuts. I seemingly misjudged eBay and your leadership team.
Well, a lot has changed on eBay. Over the years, the pendulum has swung back and forth between favoring sellers to favoring customers at the expense of sellers. Now seemingly they've gone full circle towards favoring large conglomerate sellers (read: Chinese importers) and the platform is geared towards low margin, low cost, high volume shit sellers.
Our account with eBay has nearly flawless consumer ratings and over a decade of exceeding customer expectations, one transaction at a time. That account is now restricted by eBay. Why? We cancelled one too many orders in the course of a year. How many orders did we cancel?
Five. Out of several hundred.
But five is eBay's magic number. That's their magical determination that you're a risky seller. Never mind that 100% of the risk is on your side when dealing with unscrupulous scamming buyers that eBay has taught how to work the interplay between them and their sister spin-off Paypal. That's YOUR cost of doing business. You assume the risk. That's acceptable.
The reason for this post is to throw a cautionary flag out there to anyone that has followed my work, specifically the podcast where I endorsed them as a viable revenue channel, or the INSIDERS thread that interweaves eBay through the passive income business model.
eBay is now volatile.
I am not saying "don't sell on eBay." I would say "don't build a business on eBay." They pendulum there has swung against the smaller sellers (>$1,000,000 in revenue on eBay) and the policies in place now force you to make decisions regarding customers and risk that you might not make in your own sandbox. You can either make 100% of eBay customers happy with each transaction, or risk business suspension or expulsion over nominal infractions.
So what does it look like for us?
First, we didn't count on them too much for revenue. So on an impact scale, it hurts us almost zero (other than perhaps pride... for recommending them).
Here's what cancelling 5 suspicious transactions in a year did for us, as far as punitive penalties from eBay:
1. Our search results were suppressed
2. We were kicked out of their global shipment program
3. We were restricted with regard to how many items we could list on eBay at any one moment in time
4. We were restricted with regard to how much we could sell in $$ on eBay in any given month
So they tied our hands in those four ways, and then told us to IMPROVE OUR METRICS. Throttled sales by 90%, and with the few scraps left, told us we had a limited time to improve our metrics. LOL
We'll be one of the few companies that can survive the eBay inflicted death spiral and not lose our eBay account completely. Their rigged system is not set up for you to survive this. It's set up simply to wind things down with the promise of reinstatement in exchange for not walking away from the rest of your customers that bought things on eBay. We'll be reinstated within the next 30 days, after the previous 90 days in the eBay penalty box. I don't know if I care. I don't know if we will re-engage. Most companies when faced with what eBay did to our account LOSE their account because eBay makes it almost impossible to reverse the metrics during the restriction, and then they close your account for not improving your metrics.
So what could we have done to avoid this?
1. Sell more. eBay is now less for the dabbling seller, and more for the professional sellers. Sadly for eBay customers who like what we sell, we are the ONLY source. In our absence, eBay customers are left picking through the bones of the Chinese importers who sell inferior products.
2. Deliver every order, without question. Count on eBay and Paypal seller protections, and don't put your own safeguards in place. Drink the kool-aid.
3. Anticipate 100% compliance with making sure every eBay customer is 100% satisfied, by taking your customer service contingency accrual from the normal 1% of sales to around 5% of sales.
If we resume our activities on eBay, we will do all of the three above. eBay still claims to have 100m customers, and the customers are a different demographic than the Amazons and the Walmarts of the world.
Don't spend a ton on money building an eBay business, and don't ever build a business that is eBay centric. Use them for what they are worth, but always keep in mind like any venue, you are subject to the whims and winds that blow. It's not your sandbox, so you don't make the rules.
If you have any questions, re-read from the Millionaire Fastlane book the chapters and concepts on the commandment of CONTROL.
p.s. if any of you eBay execs read this when it comes across your Google Alerts, how about you apply some common sense to not being assholes towards your sellers? There was a day when sellers were considered customers. And a special THANK YOU to the eBay executives that I promoted FREE on the radio to thousands of entrepreneurs, who when I simply needed someone to look at this from a rational standpoint chose instead to kick me in the nuts. I seemingly misjudged eBay and your leadership team.
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