Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Nov 30 2017 09:02:57

Change Could Mean Buyers Pay eBay Instead of Sellers

By: Ina Steiner

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eBay struck a 5-year operating agreement with PayPal when the board broke up the companies in 2015, but a provision in the contract allows eBay more leeway beginning next year - and the biggest losers may be eBay sellers.

Speaking at a Wall Street conference on Tuesday, eBay Chief Financial Officer Scott Schenkel addressed a question about the provision which a Credit Suisse analyst described as giving eBay the ability to experiment with payments and become the merchant of record at the three-year mark, which would be July 2018.

Explaining the concept of merchant of record, he said, "eBay would start to be the seller and in doing so would aggregate that volume and be able to get lower PayPal or other payment operator rates."

Becoming the merchant of record has huge ramifications, as Etsy sellers found out when that marketplace forced Etsy Direct Checkout (now called Etsy Payments) on sellers. When a buyer pays for a seller's item through PayPal, the money goes to Etsy, not the seller.

Sellers didn't like it in principle - and it meant waiting longer to get their funds from Etsy. 

One can imagine how eBay sellers would feel about it if eBay became the intermediary for PayPal payments. Additional concerns would likely center around eBay's history of glitches and poor customer service.

Schenkel said eBay was considering its options. It would mean more revenue for eBay, but it would also entail more costs - and eBay would take on risk. And, he said, "We would have to do trust, we would have to have some degree of additional customer service, all of which PayPal does for us today."

It seems it wouldn't happen at once - eBay would be limited to 5%, and then could scale to 10% over the next 2 years. Currently PayPal is over 85% of its business, he said. "So we could start to use other payment providers, or have PayPal be the payment provider for (eBay being) the merchant of record."

"And you know, again, the lens we're going to take is, do sellers want alternatives? Do buyers want alternatives? Can we make it more frictionless? Can we make it a better user experience? And along the way who's the best payment provider partner? Today it's been PayPal and we certainly can and will open it up to others."

Knowing now that eBay may be planning to insert itself into payments between buyers and sellers, it seems it could be the reason for eBay's rush to roll out a new selling platform called Seller Hub.

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Readers Comments

Perminate Link for Change Could Mean Buyers Pay eBay Instead of Sellers   Change Could Mean Buyers Pay eBay Instead of Sellers

This user has validated their user name. by: toolguy

Thu Nov 30 22:20:05 2017

@Ming

I didn't miss the "point"

The point was eBay FAILED at Billpoint but in turn made a huge profit on Paypal!

It seems YOU missed MY point ~ LOL

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by: Studiolines This user has validated their user name.

Thu Nov 30 23:12:11 2017

Will check it out

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by: Chicago48 This user has validated their user name.

Fri Dec 1 07:57:03 2017

They should open payment up to other sources like Amazon pay.  I don't trust Ebay to run a payment system.  No way.

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by: eBay Shill Buster This user has validated their user name.

Fri Dec 1 10:02:44 2017

All of this is meaningless if eBay has no traffic growth which they don't due to the fact that all the traffic growth is going to Amazon and Walmart, with both of them being giant spenders with Google.

What eBay has is gross failure to deal with, Structured Data is a flop, Seller Hub is a flop, promoted listings is a criminal scheme, Devin's cross promotion of sponsored listings on sellers pages is an abomination, the catalog data eBay is forcing into sellers listings is a waste of buyers time, they have replaced the sellers description with a button so they can fit their catalog data into sellers listings with their sponsored ads.

Run a search on an iPad and look at the results of Devin's stupid Structured Data, then go to the listing and see his catalog data, you will be shocked at how inept eBay is under Devin.

Now when someone finds anything good in what Devin has done as CEO, please post it here.

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by: RL15 This user has validated their user name.

Fri Dec 1 11:44:50 2017

I am very glad I will not be selling on fleecebay much longer.

When my current listings end, I'm gone and very happy.

I sell a lot more on amazon, my fee's are less and no b.s. from scammers.

Never had any issues with buying and / or selling on amazon.

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This user has validated their user name. by: toolguy

Fri Dec 1 12:56:11 2017

eBay's DEMISE has been posted on this forum for no less then 10 years!

For some sellers Amazon's the place, for other sellers eBay's the place!

If you're selling used industrial items Amazon can't touch eBay!

My favorite eBay seller bidadoo_business sells over $1 million a week of USED items on eBay. . .

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by: mcposty This user has validated their user name.

Fri Dec 1 13:12:02 2017

God no

Once their paypal relationship is up, they should just allow more options. simple as that.

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by: I Must be Crazy This user has validated their user name.

Fri Dec 1 13:44:25 2017

@tool

You are correct, Paypal was worth a lot when they were spun off. However the article was written in 2002 so what it spun off for in 2015 is irrelevant.

I think this, along with the fact that eBay failed at growing Billpoint, is the point of the article. The take away from the Billpoint failure was for eBay to MANDATE all transactions go through Paypal. Thereby providing a guaranteed customer base for the relatively young company. I would expect that eBay would do the same with their own payment service. HOWEVER, unlike in 2002, eBay is no longer the only game in town. So buyers and sellers who do not wish to hassle with eBay's payment processing will take their merchandise and dollars elsewhere. Ebay is not in the dominant position it was in in 2002 and certainly the management is no better having gone from monkeys to morons.

From the article Ming referenced:

''Meanwhile, Billpoint had something else going against it: its association with eBay. While some analysts saw that as an asset, many sellers worried about eBay extending its dominance in auctions to online payments as well. Many were reluctant to rely even more on eBay than they already did and rejected eBay's more heavy-handed attempts to promote the service, such as last fall when it required sellers to use Billpoint in its Auction for America charity effort.''

Funny how history has a way of repeating itself.

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by: eBay Shill Buster This user has validated their user name.

Fri Dec 1 13:51:27 2017

You're right, if is funny, eBay is the best comedy show on the net, you don't have to pay Netflix to watch it either, just wait for the next punchline from Devin like the one he told at eBay open about how 'important seller hub is to the future of eBay'.

Talk about belly laughs, this dude provides more comedy than Drew Carey reruns ever did.

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by: ebayout This user has validated their user name.

Fri Dec 1 16:37:01 2017

@tool

Yes, the demise has been a poor forecast.
How about stagnation?...whence the growth going forward?
Amazon...WalMart...Alibaba...Rakuten...there's just so much to go around.
ebay is left sucking hind teat...unless you need aviation tools.
Structured Data will NOT attract new customers...it'll just send them elsewhere.

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by: Beth This user has validated their user name.

Fri Dec 1 19:27:02 2017

This would be the absolute last straw for me.  Paypal had me in tears this week. I hate them already.  I will not tolerate ebay getting, holding or distributing my money.  NOT one dang time.

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This user has validated their user name. by: bitbybit

Fri Dec 1 20:13:13 2017

This needs to be changed up a bit to reality:
"eBay (NASDAQ: EBAY) (USE TO BE) the worlds most vibrant marketplace for discovering great value and unique selection. eBay (USE TO) connect millions of buyers and sellers around the globe, empowering people and creating opportunity through Connected Commerce. Our vision for commerce (WAS) one that (USE TO) enable  people, powered by technology and open to everyone. We (USE TO) partner but never compete with our sellers and create stronger connections between buyers and sellers with product experiences that are fast, mobile and secure."

The rest is eBay's sales pitch to those gullible:
" eBay is passionately committed to re-inventing commerce and making it simpler, more accessible and more rewarding. To do this, eBay is developing innovative experiences aimed at simplifying shopping thanks to structured data."  

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This user has validated their user name. by: toolguy

Fri Dec 1 20:54:10 2017

Structured data only works for new items and most new items are made in china!

As for used industrial items no website can beat eBay!

And if you're in doubt go look at this weeks sales by bidadoo_business on eBay.

They sell over $1 million a week, week after week after week. . .

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by: wackymacs This user has validated their user name.

Fri Dec 1 21:37:28 2017

Let's get something straight, unless a 12 year old is printing one out as a lark, THERE ARE NO COUNTERFEIT USPS MONEY ORDERS! eBay used to use that falsehood as an argument when they foisted their PayPal payment service on their sellers. USPS money orders have several 'verifiers' built in to each money order. To actually believe that a counterfeiter would have their name and address on the money order, not to mention that a seller would readily have the buyer's contact info, as still believe he can defraud a seller, is beyond credibilty .And, of course, remember the penalties for faking a USPS money order. Sitting in prison is hardly a good trade-off for trying to get a few dollars worth of goods from some seller.

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by: Scott98 This user has validated their user name.

Fri Dec 1 22:38:21 2017

Question about etsy.

Can you post or give the buyer your 1) website url, 2) email address and/or 3) phone number?

Or is it like eBay?

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This user has validated their user name. by: iheartjacksparrow

Fri Dec 1 23:00:29 2017

@wackymacs - If, as you say, there are no counterfeit USPS money orders, how is it that every time I take one to be cashed, the clerk always carefully checks a sheet to see if the number on my money order matches any number on her list? Why is it that at each register in my post office there are photocopies of fake money orders taped to the walls dividing the stations? And I clearly remember a few years ago that sellers were warned about a rash of counterfeit USPS money orders being used to pay for online sales.  

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by: thriftyone This user has validated their user name.

Fri Dec 1 23:45:03 2017

Scotty for now you can. You have to have an active store with items for sale. On your about me page, you can say something like, "to see more of our collection please visit our website/ store and provide a url. I think with all of the changes they are making there, that this will disappear in the near future. After all, Josh, was a former Ebay exec.....

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by: eBay Shill Buster This user has validated their user name.

Sat Dec 2 18:28:57 2017

Devin is selling his Sturctured Data and AI as the processes that will 'turn around' eBay but he is really selling smoke and mirrors to investors.

 https://techcrunch.com/2017/01/10/ai-powered-is-techs-meaningles
s-equivalent-of-all-natural/

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by: Jester This user has validated their user name.

Mon Dec 4 00:02:34 2017

I am on my way out and I am trying to liquidate most of my stock by May when I will cancel my premium store subscriptions. I still may sell a few items on my existing 4 accounts but I will only pay FVF's and use the free listings. I recently transferred my new products that I was trying to sell on eBay for quite a while to Amazon where they sold quickly and for much more then I had priced them on eBay. Sad I have been selling there since 2008.

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by: BackInBlack This user has validated their user name.

Mon Dec 4 00:34:15 2017

@ iheartjacksparrow - You took the words right out of my keyboard, right down to the multi-page list of counterfeit postal money orders and photocopies at each clerk's station!

Hard to imagine someone could actually believe there are no counterfeit postal money orders when there is counterfeit U.S. currency, coin, and everything else!

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