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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This user has validated their user name. by: LasVagueness

Mon Dec 4 00:41:15 2017

This is how Tradesy works. The sellers pay Tradesy and Tradesy then pays their sellers usually two weeks later. I put up with it because 1) Tradesy only offer a 4-day return window 2) Tradesy takes care of all returns and 3) my merchandise is marketed far better on Google.  

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by: Moonwishes This user has validated their user name.
Web Site

Mon Dec 4 00:56:45 2017

I find it interesting as I have read posts about the changes at ebay for years now on ecommercebytes and see people saying now that Devin has ruined ebay. A few years ago it was Don Ho that had ruined ebay. And before that it was Meg. Meg was in power and ruined ebay completely which was why I left. Ebay has had years of CEOs that seem to be doing everything possible to destroy this once great company. It isn't one CEO, it was all of them and the stupid rules that they are jamming down seller's throats. I tried a couple of free auctions over the last 3 months. I sold two things and nothing else as I had no reason to give things away for pennies on the dollar, thank you very much.

Time to find an ebay CEO that is more concerned with sellers making money and being happy, since none of them  seemingly are doing that now. If that CEO only understood that when you make your customers (sellers) happy, then you are making money as well.

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by: Steevo This user has validated their user name.

Mon Dec 4 01:26:41 2017

Ebay is going to try to buy their own Chinese crap and sell it themselves. Third party sellers can stay but I doubt many will want to. Ebay as a venue is quite a bit overripe.

BTW, that Bidadoo place someone mentioned. They are charging administrative fees, packaging fees, and more. Heh. Ebay either doesn't know or doesn't care. If anyone smaller tried doing that ebay would slap them down hard, because ebay is not getting their vig on those other fees. heh.

   This item will ship via flatbed truck  
   Click here for a shipping estimate
   This item is located in Kent, WA 98032
   Preview of this item is available 8:30am to 4:00pm
   Preview and pickup location: 1001 3rd Ave S Kent, WA 98032
   Please submit a request for a shipping estimate prior to your bid using the links in the auction
   Buyers will be assessed a $96.20 administrative and handling fee
   Pickup and loading assistance is available 8:30am to 4:00pm
   If required, a packaging and handling fee may be applied for any buyers that arrange 3rd party shipping

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by: sickandtired This user has validated their user name.

Mon Dec 4 10:39:03 2017

1st - concerning USPS money orders -  for the last couple of years that ebay allowed sellers to accept them, I, as a Canadian seller, had to put in my listings that I could no longer accept domestic USPS money orders - buyer had to send an international one.

This was not my choice - banks here were directed to no longer accept the domestic variety and the reasons I was given were that there was a problem with both counterfeit and stolen MO's and our banks did not want to have to eat the duds.

I envy those sellers of new goods who can make a success of a personal website or have found sales on some of the other platforms out there, but for me and many other sellers of antiques, collectables etc ebay is still the way to go......and believe me, I hate that fact.

I have a very small number of repeat customers - most of my sales are one offs.  Tried my own website but it cost more than it generated. Etsy and Bonanza were both duds - the odd sale but certainly not worth the effort.

Periodically I ask customers how they found the item they bought from me and if they ever search other sites for antiques/collectables.  The vast majority come directly to the ebay site and search for the piece they are looking for.  Most say they have never heard of or used Ruby Lane, Etsy, Bonanza, etc.  They don't google first either - just hop on ebay directly.

That tells me that ebay still has a pretty captive audience for the very section of the market that they are trying to eliminate from the platform. The site was built on antiques, hard to find, oddities and the like and  now turns its back on us to promote dollar store crap and knockoffs. We could once again be a huge generator of profit and  customer retention if ebay would stop pretending we don't exist.  If a buyer is already on the site looking for a piece for their collection, an addition to their  flatware or china or a used widget, chances are they will browse around for other things as well.......that proved to be true back in the day and could be once again.

Auction format may be useless for new goods, but could once again rule the 2nd hand market if we weren't relegated to the basement. Instead of the constant fiddling with search and the insidious  intrusion into the buyer/seller relationship, it is time to go back to what made the site a success. BE A VENUE - that is what ebay is, so embrace it and act in ways to promote that - you are not Amazon, Walmart or whatever. It is too late for such a little dog to try to compete with the big dogs.

My absolute biggest wish is that ebay would move in a totally different direction - do what many of us begged them to do years ago.....split the site into NEW and OLD....... embrace being a venue .....get out of our way and let sellers run their own business. I truly believe that would boost real revenue for ebay and bring back 10's of thousands of users to the site - both sellers and buyers.

ON TOPIC..... if ebay becomes "the seller of record" what are the real implications of that? Are we then sub-contractors or employees or agents etc etc? Are there tax implications to that? If ebay is the seller, then do they eat the returns and partial refunds? After all, as it is now, the seller is on the hook for that - not the manufacturer, the auction/yard sale/fleamarket/private person that we source our goods from? Ebay preaches to us that liar buyers, box of rocks returns and the rest of the nonsense we deal with is just a cost of doing business.......we'll see if they are willing to assume that cost of doing business!

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by: Whatever This user has validated their user name.

Mon Dec 4 10:57:25 2017

Judge Judy says "the item doesn't leave this hand until the money is in the other hand" Pretty simple - if ebay wants to hold the money a few extra days fine - make the buyer wait - that will make them happy right? If they don't want to allow me to sell there because I hold the shipment till paid - well that's fine also.  I'm currently working on re-inventing myself one more time. Trust me I'll figure out how to earn a living. Necessity is the mother of invention.

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by: IFindBugs This user has validated their user name.

Mon Dec 4 11:25:01 2017

I gave up selling on eBay years ago due to all the problems with high eBay fees, constant changes by eBay, problems with bad or careless buyers, etc. However, *IF* I was still selling on eBay and they changed it so that eBay was the merchant of record, that would certainly force me to quit eBay.

However, I am a buyer on eBay. (I buy a certain specialized type of material that I reselll in my full-time business with four full-time employees.)  If eBay were to become the merchant/seller of record, then AS A BUYER I can identify at least three situations in the last year where it would have become much harder to get the sellers to ship the items I had already paid for.  (Unfortunately, some of the sellers of what I buy have great stuff that I can buy really, really, really cheaply but the sellers are slobs who don't pay attention to or reply to messages, so I have had to use the PayPal complaint process when the sellers don't ship the items I have paid for.)  So... I would be much less likely to buy in those cases and that would be sad because I make a lot of money on the stuff I buy from those types of sellers.

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by: uppercutknives This user has validated their user name.

Mon Dec 4 12:49:47 2017

Ebay can't do a decent job of running their own business and I certainly won't allow them to take my money for a sale and try to run mine.

As soon as this happens I'm done. 20 years as a professional seller on ebay.

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This user has validated their user name. by: Don Wagner

Mon Dec 4 13:19:32 2017

Sounds like the greatest idea since eBay's we-listened-to-you adulterated Search Results - ha ha ha ha ha ha ha  ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha !!!!!!!!!!!!!!!!!!! (my heart! - ugh! - Thud! ......)

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by: Paul W This user has validated their user name.

Mon Dec 4 14:12:56 2017

EBay seems to be trying it's best to move collectibles sellers to eCRATER, and while that site has a long way to go to generate eBay-like sales, for me it has been slowly been getting better.  An influx of better items from more sellers would certainly help.  All the other sites folks have mentioned have not performed nearly as well for me as eCRATER, on which I have made 1955 sales as of today (versus about 6000 on eBay this year alone).  Stores are free on eCRATER and fees are 0 to 2% on sales.

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by: mindelec This user has validated their user name.

Mon Dec 4 14:39:45 2017

@tool

"As for used industrial items no website can beat eBay!"

i am sure this is true and if ebay actually encouraged the listing of items that no other website could beat them at they would do great.  amazon has gated DVDs, Blu-Rays, Records, CDs and at christmas time toys.  amazon is a lousy place to sell collectibles or antiques of any sort.  these are the sellers that ebay should be trying to make happy, they are ebays roots.  

instead they choose to focus on new items and items made in the past 40 years which have a upc or isbn.

@Moonwishes

my personal belief is that the downhill spiral started when the company went public and the focus changed from keeping the sellers happy and making the website work, to increasing stock value.

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by: SenseiSez This user has validated their user name.

Mon Dec 4 18:55:51 2017

There is absolutely no way that an eBay seller could get scammed accepting a ''fake'' USPS money order  -  period! Upon receipt of a postal money order you can take it to any post office to cash. The clerk there would immediately verify if it was a ''good'' one or not. If not real, the post office would give you a receipt for it.  They would, within a day, set their postal inspector(s) to deal with the crook that attempted to pay you using it. The guy's name and address are plainly printed on the fake one. After all, he did want to scam a buyer and receive goods for nothing.  The photos in each post office are there to educate  the public in spotting fakes. All of the security features built into a USPS money order are spotlighted. The list that your post office clerk checks upon you going there to ''cash'' a money order, is a listing of USPS money orders claimed by their buyers as 'lost'.  The list is updated regularly and, I believe, still can be summoned online. The USPS refunds buyers of lost money orders upon presentation of the money order's receipt tab.  How, in Heaven's name, could it be possible for anyone to get scammed by a bad USPS money order is beyond me.   All of this discussion about fake USPS money orders is one of those talking points that eBay mouthed, and had parroted by others, while promoting their introduction of PayPal. As we all know, it's a hundred times easier to get actually robbed by a buyer filing a PayPal claim on a perfectly good and fairly-represented item that you put up for sale. Yup, that's something to which a lot of sellers can easily relate!  

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This user has validated their user name. by: cfrphoto

Mon Dec 4 20:43:52 2017

If eBay becomes the seller of record, would it be forced to collect sales tax in every state where it has an office? What buyers be forced to pay sales tax where none is due now?

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by: val2525 This user has validated their user name.

Tue Dec 5 13:29:16 2017

Two words:

Hell.  No.

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This user has validated their user name. by: LasVagueness

Tue Dec 5 16:18:08 2017

I meant to say *buyers* pay Tradesy and Tradesy pays sellers approximately 2-weeks later.  

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