Copyright © 2014 SYDNEY SCHUSTER – All Rights Reserved
Do you sell your book (or anything else) on eBay? If you’ve had more than zero sales, consider yourself lucky.
eBay sellers have seen catastrophic drop-offs in sales this year, while eBay steals scads of their dough. WTF happened?
The easy blame is the glitch-plagued search engine eBay rolled out last year (it’s called Cassini) at the same time sales started flatlining. Naturally everyone assumed a connection. And there is one, but the real answer is more complex.
In fact, eBay started doing other things that are way more awful than Cassini:
● eBay gives preferential treatment to foreign mass marketers, pushing aside smaller domestic sellers.
● eBay started selling postage to sellers, for which it gets a fat cut from carrier services (a whopping 58% from USPS).
● eBay launched its Global Shipping Program and forced sellers to use it. Sellers mail their international packages to a domestic distribution center run by Pitney Bowes, who removes their packing materials to save money on postage and then ships broken purchases, often to the wrong place, with exorbitant export fees due to buyers (typically 33% of item value) that apparently eBay keeps.
● eBay deliberately hides many listings.
● eBay’s October 1 update to its mobile app rendered it virtually useless.
● eBay interlards the listings you pay for with links to competing listings, typically 31 per page (not including advertising from external retailers and eBay product promotions).
● eBay tasks its programmers with screwing sellers instead of improving security, resulting in broad downtime outages and the hacking in May by cyberthieves who stole the private data of many, if not all, of eBay’s 128 million users. As a direct result, many buyers abandoned the venue.
● eBay sellers suffered massive cutbacks in their listings on Google Shopping search after Google made the service pay-to-play and eBay didn’t want to so much. And Google’s new search algorithm (Panda 4.0) uses bid-based priority ranking that ignores cheap-ass clients like eBay. eBay has since moved its Internet ad business to Bing, used by no one.
● eBay pirated YouTube tutorials, further antagonizing Google (who owns YouTube).
● Google minimized the presence of low-quality and/or thin content promotions, like eBay’s poorly thought out AdWords campaign.
● eBay’s unwillingness to upgrade its staff or infrastructure is a big mess of stupid, best exemplified by a market launch on October 9. eBay began hosting live auctions for a consortium of major art auction houses, a highly publicized event that crashed eBay’s American servers the first day and its European ones the next. eBay shut down other marketing operations and/or transferred their databases to foreign servers to free up bandwidth and server space for the live auctions. US sellers found their stores had become Russian or Chinese ones, their PayPal accounts were German, and their auctions had vanished. Some members could only access their accounts by logging in via eBay Canada. US buyers were blocked from making purchases from US sellers because, eBay insisted, one party wasn’t in the US.
Fun Fact: the buyer’s premium on eBay’s live auctions ranges up to 30% of price realized. Ha — bite that, screwed eBay Mom & Pop Store!
The upshot: eBay sales have tanked because eBay willfully thwarts sellers in pursuit of various ends, none of which benefits you. eBay revenues nosedived this year (including a $200 million loss due to the Google debacle alone). And, apparently, eBay recruits programmers from the local bus station. Not for nothing, but eBay has had 16 worldwide site crashes in 2014 alone, plus the bonus site hacks resulting from inadequate security.
Fun Fact: eBay started out 2014 blaming its spring/summer sales slump on the May data breach. eBay is ending 2014 — after partnering with bottomfeeder mega-retailers like Wal-Mart and Sears — by blaming its fall/winter sales slump on food stamp reductions.
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Anyway, here’s how and why eBay limits visibility of (your) listings:
● Rolling blackouts (aka throttling, tap-on-tap-off, rotating exposure). eBay’s file management system herds what it considers less-desirable listings (ie, yours) into dead zones. It assigns server locations and listing numbers based on criteria like category and seller volume, allocated regionally, which eBay can manipulate discreetly. So like, if eBay needs you to step off because they got boxcarloads of bad art and Korean Rolexes to fence and you’re sucking up their precious bandwidth with your dumb book, they just turn off your whole server and the whole Midwest (or wherever) goes dark.
● eBay restricts visibility of listings to small, distant areas. eBay doesn’t want you selling locally, where buyers can — horrors — pick up for free! By forcing you to sell far away, eBay gets a bigger postage commission. Plus it keeps you from competing in desirable markets against eBay’s mass-market darlings, except when eBay’s had a real slow quarter and its financial report to investors is due and shazam! just watch those floodgates open. Fun Fact: ebay plans to force indie sellers to let their customers pick up purchases at partner retail outlets like Target, Best Buy, and Home Depot.
● eBay physically turns off listings without notification (including ending auctions early, often within one minute of the end, to block snipe bidding because it overtaxes eBay’s inadequate infrastructure and bandwidth; eBay uses other means to block sniping, too).
I have on numerous occasions checked my own eBay listings, only to see this:
I now invite you to share my horror upon discovering that “a positive user experience” means my eBay listings are visible ONLY in Texas, Louisiana, Mississippi and South Carolina. They’re not big readers of cutting-edge literature there, so I gave up selling my novel Dead Spot on eBay.
Still don’t believe eBay controls which listings are visible? Okay. See the listing below? Put it on your watch list … and watch it disappear!
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What eBay doesn’t tell you is that eBay is jettisoning small and mid-sized sellers, in ways it hopes aren’t obvious enough to start an avalanche of class actions. Reports vary, but eBay admitted to (translation: probably grossly understated) 54,000 seller suspensions over two days in 2013. In addition, sales limitations were placed on an undisclosed number of sellers. After a tsunami of bad publicity, eBay clammed up about whatever it’s doing.
In the meantime, if you haven’t been booted yet, eBay doesn’t care if your listings never sell.
Why? Fees. When buyers can’t see listings, sellers relist perpetually, paying a fee per listing of 50 cents to $2. (By way of example, eBay collects $7.20 in basic fees for one unsold $10 item relisted for two years, compared with $3.63 if it sells once.) If a seller ends an auction early and there were bids on it, there’s a penalty fee. Do you prefer 30-day fixed-price listings? Don’t worry — eBay will convert them to Good Til Canceled without notice (no, you can’t change them back) and bill you monthly in perpetuity. If you do manage to actually “sell” something but the buyer doesn’t pay or returns it, you ain’t getting your fees back. Multiply all that by millions of unsold listings to get the big picture.
Fun Fact: For books, eBay limits the shipping fee you can charge to $5 or $6 and then steals 13% of that in fees (10% to eBay + 3% to PayPal). Selling coffee table books? Good luck with that!
Plus also, there’s this:
● In 2013 eBay settled a class action for $4.75 million after failing to provide visibility upgrades to sellers who paid for the service.
● eBay unlawfully inflated the price of its stock (down this year by more than 4%) by planting acquisition/spinoff rumors in the media. (Google to buy eBay! Carl Icahn to buy eBay! eBay to sell off PayPal!) Board members and top execs sold their shares high, then bought them back low (or didn’t, if they grabbed the cash and bailed).
● If you call eBay customer service and the CS rep doesn’t like your attitude after you’ve been on hold for hours, watch out for damaging retribution.
Fun Fact: eBay CS reps, who are mostly in the Philippines, are paid $5 per day plus a sandwich.
● eBay secretly allows high-volume sellers to buy their way out of negative feedback (one reported payment: $150).
● eBay forces sellers to start auctions at 99 cents to attract buyers to the site, then shuts off the auctions from views and late bidding, forcing a sale at the opening bid (or a relist).
● Bill Me Later, a PayPal program (eBay owns PayPal), was investigated in 2013 by the federal Consumer Financial Protection Bureau for predatory lending.
● Since it soon won’t have PayPal to suck the life out of (latest alleged spinoff date: mid-2015), eBay now offers eBay MasterCards, with a variable purchase APR of 19.99% or 23.99%.
Fun Fact: PayPal now places 21-day holds on seller funds. Why? Because it can. The problem (besides the obvious): The length of time a money transmitter can hold funds is regulated by states, and most allow a maximum hold of 10 business days. PayPal hopes you don’t know this.
So caveat emptor, dogs. eBay is no longer a venue for indie sellers. It’s just that eBay isn’t copping to that because they’re too greedy to blow off that much free dough.
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Sellers are already lining up to sue the crap out of eBay, if Icahn (who owns 46 million shares and the BOD’s balls) doesn’t rip it to shreds first. Three state attorneys general have started investigations, just as PayPal spinoff claims are surfacing again (coincidentally, just as eBay’s share price took a nosedive again). The SEC frowns on pump & dump and insider trading, and the FTC doesn’t look kindly upon theft of service.
The most plausible reasons why eBay has dodged greater regulatory scrutiny should make you think, and squirm:
1) Icahn makes generous political contributions to Mitch McConnell, John Boehner, Mitt Romney, Orrin Hatch, John McCain, and other cash-before-Constitution carpetbaggers who endlessly block cabinet appointments and kill meaningful regulatory legislation; plus, he has successfully evaded SEC investigations himself;
2) eBay is likely used by the government to spy on … well, everybody, the same way it uses Facebook and Google. eBay saves searches and purchase histories of users, and maintains a proprietary email system for them. Connect the dots, yo.
Fun Fact: According to eBay’s 2014 Q3 report, the company had $749 million net profit from 128 million users. Really? That’s $1.95 monthly profit per user. Who needs massive infrastructure for that? Bums make more money selling soda cans.
Fun Fact: eBay openly admits hiding money in Switzerland and Luxembourg.
As for the seller purge that’s destroying millions of small businesses, scuttlebutt is rampant in eBay forums and elsewhere concerning the real intent behind it. Pick your fave:
1) reduce payouts from upcoming lawsuits;
2) minimize claimants from a rumored bankruptcy filing;
3) easier reincorporation of eBay in the UK, where the company paid a paltry £620,000 income tax for 2013 sales of over £1.3 billion (eBay US paid $6.1 million on $2.86 billion net revenues the same year — and would’ve paid 80% less in the UK);
4) prep eBay for sale to Alibaba and PayPal to Apple, Google or Icahn. On October 1, eBay assumed $7.5 billion of PayPal’s debt (ie, all of PayPal’s debt; PayPal constitutes 45% of eBay’s value). Assume from that what you will.
It’s not much of a surprise that top eBay executives are fleeing, most recently CTO Mark Carges, VP of merchant development Michael Jones, board director and Netscape co-founder Marc Andreessen, and PayPal president David Marcus. On September 30 eBay announced the imminent departure of its much-despised CEO John Donahoe and CFO Bob Swan, accompanied by — wait for it — a PayPal spin-off announcement. Wow, what a coincidence — on September 30 Donahoe just happened to own 660,748 eBay shares that he no longer needed, the value of which shot up immediately by 7.5%. (And predictably sank 20% after eBay’s Q3 report in October, after it was downgraded by analysts who consider a clusterfuck a bad investment.) Spoiler alert: Donahoe dumped 485,665 of his shares on November 18 for $26,672,721.80.
Few NASDAQ companies need to be investigated more than eBay does. In the meantime, eBay still laughably promises sellers better visibility in exchange for sellers providing 24-hour turnaround, free shipping, generous return policies, and of course lots of fees. But in reality seller compliance doesn’t buy blackout immunity, and eBay penalizes sellers for things they can’t control. eBay forums are clogged with complaints from cooperative sellers whose stuff is still deadweight at the ass end of Best Match search results (when it’s visible at all) behind thousands of duplicate listings for Chinese counterfeits that don’t even have the search terms in the titles. And if you relied on buyers finding your listings via Google Shopping to pick up the slack, you can kiss that goodbye.
In other words, eBay’s current business model is you giving eBay money for nothing, not you selling stuff on eBay.
My advice: Don’t bother selling your book (or anything else) on eBay. Short of worldwide famine or collision with a comet, eBay is your worst nightmare.
Copyright © 2014 SYDNEY SCHUSTER – All Rights Reserved
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