A Cautionary Tale About eBay

[Vigilante]

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.

 

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[Bigguns50]

Thank you for that info and your perspective @Vigilante .

Not surprised. I've been seeing more and more and more "From China" in listings. Damn shame but whatever.'
My Wife's Daughter purchase 5 items from China via Ebay. 1 never arrived, 2 were disappointing. Cheap shit.

 

[Vigilante]

There was an interesting series of posts in response to this at my facebook page :

https://www.facebook.com/mybusinesslive/

 

[devine]

Time to create a better selling platform.
And with so much of Chinese crap, does anyone feel that silky, expensive, high quality smell in the air?

 

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[RHL]

@Vigilante

If you want to get your account restored, take them to trial in the court of public opinion. This is exactly the kind of account that would go mega viral on Reddit... may actually be huge for your brand too, if you casually drop it in there in the beginning. I can easily see this being FP material, so 50,000 views minimum. They love to winge about big, faceless companies, and eBay is such shit that most people are coming into the discussion already fed up. Even casuals can't help but feel that their 14% selling fees are a rip off.

r/entrepreneur would love to hear about this if it was phrased in the right way. Possibly some other subs, your best bet would be niche subs for whatever you're selling (watches, etc.)

If you decide that you want to do this, shoot me a PM first before you post anything there.

 

[MJ DeMarco]

Thread marked NOTABLE -- thanks Vig for sharing as I hope you can get it straightened out and force the corporate bureaucrats to actually change something.

 

[Jon L]

I sold about 5-6000 orders about ten years ago over the course of 10 months or so...busiest month was 800 orders. Most shipped out of a contract warehouse. The pendulum started swinging against me at the end of that, and I quit rather than figure out how to ride it. Back then, sellers were up in arms, protesting, predicting the 'end of ebay.' Didn't happen. Ebay does what it wants, when it wants. I'm sure it has a big data analysis engine that tells it where to focus its efforts. If you don't fit their business model of the day, you're out, or seriously downsized. End of story.

 

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[Vigilante]

@Vigilante

If you want to get your account restored, take them to trial in the court of public opinion. This is exactly the kind of account that would go mega viral on Reddit... may actually be huge for your brand too, if you casually drop it in there in the beginning. I can easily see this being FP material, so 50,000 views minimum. They love to winge about big, faceless companies, and eBay is such shit that most people are coming into the discussion already fed up. Even casuals can't help but feel that their 14% selling fees are a rip off.

r/entrepreneur would love to hear about this if it was phrased in the right way. Possibly some other subs, your best bet would be niche subs for whatever you're selling (watches, etc.)

If you decide that you want to do this, shoot me a PM first before you post anything there.

Great post.

I likely won't blow it up any bigger than the Fastlane Forum for now. I also posted it to the Mind Your Business page on Facebook as I have kept up with the podcast listeners there. I really hope to get that podcast relaunched with Clear Channel Communications / iHeartMedia in 2017. It's on my TO DO list.

The main reason I posted it here was I always feel an obligation when I take a position on something here like "Go eBay" that when my BUY position changes to a SELL position (like "F*ck eBay") I feel an obligation to give you all an update lest it come up down the road and I had never corrected the record.

I am not convinced my story is at all unique, either. The internet is filled with a litany of horror stories that carry similar themes. Several different ways to get screwed when you lose the Fastlane commandment of Control.

Some people have lost their liveleyhoods at the hands of stupidity like this. Fortunately for us, it's more of a speedbump. Years ago, there were many millionaire eBay stories. Now, most of that business is gone, replaced by an intentional redesign by eBay.

They're able to do what ever they want with their business. That's their business decision. I just wanted to post the observation to hopefully spare anyone that followed any aspect of my lead. It's possible to insulate yourself to a degree as long as you understand the rules and the road mines.

There are several here that are building eCommerce vehicles externally of these third party venues. @Eskil and @AllenCrawley are a few of the more successful from my inner circle at building successful eCommerce businesses that have control. So, pay attention to what they are doing, and how they talk about their businesses. Ultimately, if you build a business that is not dependent on someone else's rule book, it's much harder for catastrophe to strike you.

 

[KLaw]

Why did you refuse to sell to those 5?

 

[SethTavis]

Why did you refuse to sell to those 5?

Does it matter?

There are a ton of scammers out there :sour:

Edit: Sorry I read that as "what did you refuse to sell to those 5"

 

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[KLaw]

Does it matter?

Absolutely. Could be a teaching moment for others. To not make the same mistake.

 

[biophase]

Absolutely. Could be a teaching moment for others. To not make the same mistake.

We cancel orders that send off red flags.
1) multiple tries with different credit card numbers
2) overnight shipping, billing and shipping address don't match + throw away email address or obvious fake email address
3) gut feelings + bad phone number
4) large orders to foreign countries + paypal + weird email address + no answer on the phone
5) sometimes the order just doesn't feel right

 

[Raoul Duke]

Why did you refuse to sell to those 5?

I am curious, as to why the fine folks here at the fastlane forum need to hone your bullshit meter for you?

 

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[jon.a]

I am curious, as to why the fine folks here at the fastlane forum need to hone your bullshit meter for you?

Because we learn from one another?

 

[Raoul Duke]

Because we learn from one another?

I agree... to an extinct.

If that were true. Would he not have "learned" by now?

 

[jon.a]

I agree... to an extinct.

If that were true. Would he not have "learned" by now?

Some of us are slower than others.
or
Many things get asked and answered over and over.

It's one of the natures of this beast that MJ created.

Sometimes when we see something come up again and again we get exasperated. Most of us just let it go and let a newer person answer this time.

In my own case, I rarely pick on someone whose been here for awhile, unless they're really being a dick.

 

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[Azure]

I don't have substantial seller exp on eBay but it has always seemed a little wishy washy in terms of process and that has thrown me off. When I think of potential product venues eBay ranks near last, down with Craigslist and kijiji

 

[RHL]

When I think of potential product venues eBay ranks near last, down with Craigslist

If a free, hugely popular listing service that takes 0% of the final sale price is at the bottom of your list, and you don't live in Alaska, you need to re-evaluate your life choices. Consider that every $7000 I make on CL I pick up an extra grand vs eBay. And no refunds or charge-backs. No PayPal holds on my wallet. If you can figure out a system that works well for CL, it's the best thing going. I might be biased though, because I live in the NY metro, so I have MILLIONS of potential buyers within a half hour of me.

 

[Azure]

If a free, hugely popular listing service that takes 0% of the final sale price is at the bottom of your list, and you don't live in Alaska, you need to re-evaluate your life choices. Consider that every $7000 I make on CL I pick up an extra grand vs eBay. And no refunds or charge-backs. No PayPal holds on my wallet. If you can figure out a system that works well for CL, it's the best thing going. I might be biased though, because I live in the NY metro, so I have MILLIONS of potential buyers within a half hour of me.

I live in a slightly smaller metro area(Toronto). Craigslist definitely has its own merits, and certain products will obviously perform very well there. However it isn't a great medium for a lot of products.

 

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[Vigilante]

Here's a link to the show we did with the eBay spokesperson when I was in their camp.

http://twincitiesnewstalk.iheart.co...4/mind-your-business-all-about-ebay-12998633/

 

[Vigilante]

As a result of this thread, I was contacted by eBay's executive team and sent them a relatively direct, detailed response. I don't anticipate any significant change as it's not easy to alter the course of the Titanic (pardon the analogy) but you never know. If they have an interest of seeing things through the eyes of their customers (and their vendors ARE their customers, whether they recognize that or not --- Amazon now recognizes that) they'll take this under advisement.

Meanwhile, Amazon, Sears.com, Walmart.com and Rakuten (and perhaps Jet) are happy to take up the slack of the revenue eBay is leaving on the table.

 

[devine]

Here's a link to the show we did with the eBay spokesperson when I was in their camp.

http://twincitiesnewstalk.iheart.co...4/mind-your-business-all-about-ebay-12998633/

This podcast could be so much bigger than it was...

 

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[Vigilante]

This podcast could be so much bigger than it was...

We were a little early. We're going to come back to it some time in the course of the next year or so. Monetization is still in it's infancy for that as an advertising medium, although on demand content is absolutely the future of media.

It takes a surprising amount of work to create content worth people listening to. It was fun, and definitely something I want to re-ignite. I have the right media partners to back it and produce it and house it, I just want to make sure that it creates a positive return on investment of time.

We've also toyed with making it a Saturday morning radio show, as most of that time is garbage time on major metro market radio stations - time in which they sell it for peanuts to local service advertisers like real estate agents, financial planners, etc... and we might be able to bring real advertising dollars into a show we specifically want anchored on Saturdays.

Anyway... I will keep you informed here at the forum as we look at 2017.

 

[Vigilante]

MJ and I were talking about expectations this afternoon, and how having extremely low expectations of others means usually they can meet the low bar you set. My expectations of eBay's response, compared to eBay's response thus far, have been par for the course. It's very seldom that a single customer perspective does anything to alter the position of a huge organization. That's likely to be the case here also, although it has been somewhat cathartic to vent it to an executive level audience (who likely doesn't give a shit anyway).

Again though, my primary reason for positing this narrative was to correct the record for you here at the forum, not to hopefully change them. I hold out no expectations that they have any interest in changing anything. They set this all in motion. This is their design.

The nice part though is that YOU get to decide where the best return on your investment of time is. Business is a degree of investment, risk and reward. You get to decide where that balance is the best fit. When the scale tips favorably in your direction, you make money. When the scale tips unfavorably against you, you have the option to get out and find a better venue.

I received something today in the mail I bought on eBay. I needed a specific power transformer for my irrigation system. They didn't have the brand name version from the original manufacturer, but they did have a cheap Chinese version that specked out the same. So that's what I bought. It was pretty cheap. Showed up, with no UL approval. Figures. eBay. Ironic. If eBay were paying more attention to how the market was changing, they would have both --- but all they had was the knockoff one I bought. I would have paid 3x more for the real one. I'll return this one and buy the real one somewhere else.

 

[Vigilante]

I just realized that the whole time eBay has been repressing my search listings, they have been charging me a subscription fee for an eBay store.

 

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[OldFaithful]

Thank you for the education on ebay's operation!

 

[Vigilante]

The "customer care associate" from eBay that was assigned to not help me recommended if I didn't like paying a store subscription to eBay while they repressed the service I was paying them for, that I cancel my subscription.

Which I did.

Along with all my listings. And my auctions. Everything.

After 66 months.

Great job, "Jessica." You get an F in customer service. At eBay, that might get you promoted.

F*ck 'em.

Once upon a time, KMart was bigger than Walmart. Walmart studied everything Kmart did, and replicated the good parts without repeating their mistakes. The rest is history. Walmart went on to overtake them en route to being the largest retailer in the world. KMart filed for bankruptcy in 2002.

History repeats itself.

There was a day where eBay could be a bully. That day is over. I get to decide where my best selling products in the United States will be sold. Several of their competitors are aggressive about business expansion. eBay will eventually have to change or die. The market requires it. They can pretend for a while that they're still Kmart, but Walmart is knocking at their door (figuratively and literally).

For today, I have decided eBay is unfit as a channel partner. My customers will have to find my products elsewhere, but fortunately that is a google search away. Nobody else will be selling my products on eBay either.

Good job, eBay. You won the battle but you are losing the war. I did my best to help you, then and now. Thanks for nothing, eBay.

 

[devine]

The "customer care associate" from eBay that was assigned to not help me recommended if I didn't like paying a store subscription to eBay while they repressed the service I was paying them for, that I cancel my subscription.

Which I did.

Along with all my listings. And my auctions. Everything.

After 66 months.

F*ck 'em.

Once upon a time, KMart was bigger than Walmart. Walmart studied everything Kmart did, and replicated the good parts without repeating their mistakes. The rest is history. Walmart went on to overtake them en route to being the largest retailer in the world. KMart filed for bankruptcy in 2002.

History repeats itself.

There was a day where eBay could be a bully. That day is over. I get to decide where my best selling products in the United States will be sold. Several of their competitors are aggressive about business expansion. eBay will eventually have to change or die. The market requires it. They can pretend for a while that they're still Kmart, but Walmart is knocking at their door (figuratively and literally).

For today, I have decided eBay is unfit as a channel partner. My customers will have to find my products elsewhere, but fortunately that is a google search away. Nobody else will be selling my products on eBay either.

Good job, eBay. You won the battle but you are losing the war.

As far as I know, ebay changed your life once already?
Well, now they do it for the second time.

And no, they won't change. They have zero people on board who know how ecommerce works in 2016+. They have zero connections with anyone who knows how to help them, because they continuously chased profits and saved on everything to make more, instead of working with specialists who actually know what is good for a business in a long run.
This is a sinking ship and those who escape now will have a solid business within 3-4 years. Those who don't... won't have a business within 3-4 years.

 

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[Xavier X]

@Vigilante

I feel your pain (although at a fraction - in comparison).

I sold (not very actively) on ebay from 2007 to 2013. Just a few hundred hundred sales transactions. Although, each in the $100 - $300 range.

All my items shipped promptly in perfect condition, so I had great metrics and feedback.
In 2013 I had to increase shipping time on a specific item, so I reduced the price to compensate for this.
I hammered on this fact in the listing, and emphasized the new lower price was a direct result of the longer ship time.
So ONLY buy this item if the shipping time works perfectly for you.

This worked well for that item for almost a year, until some Einstein gave a 3 or 4 rating on its shipping.
Under normal circumstances, this would be expected. However, not with the trade-off I spelled out in the listing.

Even though this incident only dropped my shipping metric slightly below 5, I had my seller account restricted for it.
All efforts and hours wasted talking with their seller account specialists far away in India proved abortive.

I found it mildly frustrating, but had to move right on. I can imagine it is significantly more frustrating for you.

 

[Vigilante]

@Vigilante

I feel your pain (although at a fraction - in comparison).

I sold (not very actively) on ebay from 2007 to 2013. Just a few hundred hundred sales transactions. Although, each in the $100 - $300 range.

All my items shipped promptly in perfect condition, so I had great metrics and feedback.
In 2013 I had to increase shipping time on a specific item, so I reduced the price to compensate for this.
I hammered on this fact in the listing, and emphasized the new lower price was a direct result of the longer ship time.
So ONLY buy this item if the shipping time works perfectly for you.

This worked well for that item for almost a year, until some Einstein gave a 3 or 4 rating on its shipping.
Under normal circumstances, this would be expected. However, not with the trade-off I spelled out in the listing.

Even though this incident only dropped my shipping metric slightly below 5, I had my seller account restricted for it.
All efforts and hours wasted talking with their seller account specialists far away in India proved abortive.

I found it mildly frustrating, but had to move right on. I can imagine it is significantly more frustrating for you.

The good news is we are well insulated, so this is a minor speed bump. For me, it's more about ego and betrayal than it is loss of revenue. We did have great plans for eBay as one of our channel partners in 2017, but no matter. We'll hit the revenue numbers without them. The biggest loser is the eBay customer who doesn't get to participate in what we have planned unless they find us elsewhere.

Better I figure this out now than deep in 2017 when we would have committed some major resources towards their success.

However, your story has echoes all over the internet. That's part of how they have redesigned their site and vendors over the years. I will admit I don't understand the full methodology or strategy, but I do know that the internet is littered with disenfranchised old sellers. Your story is not unique. You don't meet the profile of who they want selling on eBay, seemingly.

Oh well. Shake the dust off your sandals and move on (as you have already).

Retailers come and go. In the United States,

Montgomery Wards
Daytons/Hudson
Circuit City
Hyland Superstores
and hundreds of others. When they lose sight of fundamentals, they lose. None of them are too big to fail, including eBay. Hopefully eBay is around for years to come, but they need to change some things.

Go back to the Millionaire Fastlane rule/commandment of Control. When your business is dependent on other people's platforms, you have given up an element of Control.