Ina Steiner EcommerceBytes Blog
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by Ina Steiner, Editor of EcommerceBytes.com
Sun May 13 2018 11:06:00

eBay Throttles Sales to Deter Amazon Arbitrage?

By: Ina Steiner

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eBay reportedly admitted to throttling sales of certain sellers beginning in April, according to a company in Israel. SaleFreaks, which provides software to help eBay sellers source goods from other marketplaces, claims eBay deliberately set out to throttle sales of certain types of companies in Best Match search, which resulted in a decline in sales for those sellers, though it isn't clear how SaleFreaks made that determination.

SaleFreaks claims that after being unsuccessful in talks with eBay about problems its clients were having, it joined with large clients to initiate a legal case against eBay and met with the company before an Israeli judge on May 10th.

In a post on Facebook, SaleFreaks CEO Adi Reiss wrote, "EBay admitted that they indeed manipulated the "best match" search results against "dropshippers" relative to sellers not "dropshipping" from online sites in order to "preserve eBay's integrity" and "protect purchasers."

It also wrote, "Ebay's lawyer focused their argument on "dropshipping" practices that are problematic such as, manipulations of seller metrics in their favour such as falsely using the "cancellation at the buyer's request" option and "frustrated buyers" who bought items at too high a price. He also called dropshippers "crooks"."

We reached out to eBay on Friday to ask about the allegations. It has not responded. 

If you aren't familiar with SaleFreaks, you might wonder why eBay would penalize "drop shippers," but its sellers aren't using the traditional drop-ship model. The company caters to sellers who copy listings from sites like Amazon and post them to eBay at higher prices - on the SaleFreaks home page, it calls its service an "all-in-one retail online Amazon to eBay arbitrage tool." 

In the US, eBay has given its blessing to drop-shipping practices. But it describes the *traditional* drop shipping method, not *arbitrage* drop shipping: "Drop shipping is typically used by sellers who buy stock in bulk from their supplier. After the seller receives an eBay order, they work with the supplier to have the item sent directly to the buyer," eBay writes.

In 2012, EcommerceBytes reported on the practice of Amazon eBay arbitrage. We purchased a sampling of items from one seller to learn more about the arbitrage model; we found the prices of the items we ordered were between 15% and 37% higher on eBay than on Amazon.com, which included free 2-day shipping to the eBay buyer. Another appeal to arbitrage sellers: little risk and virtually no upfront costs since they don't procure inventory, nor must they store inventory or ship orders themselves.

Since then, the process has become far more easy thanks to automated software. Paul J Lipsky, who runs webinars about "eBay drop shipping," published a video where he explains the concept and walks viewers through the process with live examples from a software program he uses.

Regular sellers may be astounded as he demonstrates how easy it is to copy an entire Amazon product offer to eBay - including title, description, images, and product attributes - directly into his eBay Store. And when the item sells, he has the software automatically order it from Amazon, providing Amazon with the eBay buyer's shipping address.

In November, a seller who lists unique items on both Amazon and eBay complained about the practice of sellers who use eBay drop-shipping software to copy his items from Amazon and mark them up at higher prices on eBay without his permission. "Ebay support tells me it is an acceptable ecommerce selling method. Ebay won't remove the listings even though they clearly violate the listing policy using images and text without consent. Vero program is not removing them."

He said the practice makes him appear as though he is "scamming my own customers," and notes that eBay buyers who receive such an order via Amazon will receive a packing slip showing the lower Amazon price.

eBay drop shipping aside, the idea of eBay "throttling" the sales of some sellers sounds egregious. However, many marketplaces and search engine companies employ algorithms that use various factors to determine the default sort order of search results. 

In its User Agreement under "Listing Conditions," eBay states that the appearance or placement of listings in search and browse results will depend on a variety of factors. Included in its list of criteria: "seller's history, including listing practices, Detailed Seller Ratings, eBay policy compliance, Feedback, and defect rate."

eBay doesn't even have to show your listing at all, according to the following provision in its User Agreement: "To drive a positive user experience, a listing may not appear in some search and browse results regardless of the sort order chosen by the buyer."

There's plenty to digest in this post, including the issue of eBay search throttling; the practice of "Amazon to eBay arbitrage"; the practice of wholesale copying other sellers' listings; and of course the quality of the buyer experience. And some sellers may wonder if they were inadvertently caught in the net of eBay's alleged crackdown.

The battle of wits between marketplaces, sellers, and those seeking to exploit systems for easy gain is likely to increase, especially as artificial intelligence, machine learning, and behavioral targeting technologies become more accessible.

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Readers Comments

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: debranator This user has validated their user name.

Mon May 14 01:05:21 2018

Good for Ebay.
[wow! I said that? lol}
It is about time they caught on to these crooks instead of encouraging them.
What they WERE doing was taking down any negative feedback from buyers who mentioned feeling ripped off by getting amazon boxes with cheaper packing slips.
They removed hundreds a day from these Israeli based companies.
And this IS against amazon rules. if any of us mom and pops tried this on amazon we would be out on our ear.
The customer service of these ebay sellers was non existent and basically told you to get lost if you complained as they were doing enormous volume.
I am just surprised ebay is finally doing something and not amazon.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: margo This user has validated their user name.

Mon May 14 01:20:28 2018

I don't understand. If I am selling on Amazon why should I care if someone buys from me and sells on Ebay? AngelaTC says a Amazon seller was selling a lot of orders to a Ebay dropshipper so they raised their price so the Ebay seller could not make a profit. So the Amazon seller raised the item from $49.99 to $200.00. Now how long is that $200 item going to sit. If I put my item on Amazon for $49.99 I would be expecting to make a profit and if I started getting alot of orders Id be happy. So am I missing something here?

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

This user has validated their user name. by: Ming the Merciless

Mon May 14 01:28:18 2018

@extinctbay

Your comment that failure to fulfill merits severe punishment from ebay fails to consider that a percentage of these are caused not from seller or drop shipper negligence but for ebafia's admitted relisting of alreayd sold items and their chronic double listings one OOAK items both unknown to the seller.

It seems to me that Amazon's recent Prime increase could be partially due to ebay sellers. Amazon needs to halt this practice. Virtually every ebafia item that arrives in Amazon packaging is a "gift" paid for by MY Prime membership.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: bb6 This user has validated their user name.

Mon May 14 01:38:41 2018

It literally blows my mind that there are sellers out there that still don't believe Ebay throttles sales. WAKE UP PEOPLE!

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: EvilCorpBay This user has validated their user name.

Mon May 14 01:41:48 2018

For once I COMPLETELY agree with eBay....cant believe I said it, I am in disbelief.

I have expressed why the Amazon to eBay drop ship thing is hurting every eBay seller ( besides the "crooks" mentioned in the article)  a couple of times here with very little kind words or like minded responses ( I think some of the guilty parties exposed themselves just short of admitting to the practice). If you cant figure it out for yourself why its hurting your business ( hint..throttling, black outs, hiding listings, algorithms, AI, sponsored listings, etc) then your not going to listen to me anyhow!

Yes I am the tin foil hat wearing person who a couple of years ago was preaching about all the current problems ( throttling, black outs, hiding listings, algorithms, etc.) facing almost every non fortune 500 USA based seller.

I was right even though most of you said I was nuts, paranoid, etc. It wasn't real until It happened to you, and oh boy it did happen to you and its very real isn't it?

Here is the proof that the Amazon to eBay drop shipping is costing you......IF EBAY THINKS ITS AN ISSUE ITS COSTING THEM MONEY AND GRIEF TOO. eBay never fixes or improves any seller issue unless its COSTING EBAY MONEY.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: Pangie777 This user has validated their user name.

Mon May 14 02:19:02 2018

I am glad that eBay is standing its ground and finally doing something about this. I am tired of sellers from Israel, copying many of my Amazon adverts onto eBay and inflating them to outrageous prices!

An example is a Gothic skull. I sell it on Amazon (and eBay) for £15.00. Four sellers (all from Israel) have copied the advert in its entirety but almost doubled the price. They have copied my photos (which are copyrighted to me) and all the text that took me a long time to write.

Although you would think that customers would go for the cheaper item, that is not always the case. This is because my items do not always show up in the searches on eBay.

So, the customer purchases the item from the seller from Israel. When the customer gets the item (which I have shipped), they become disappointed because it is simply not worth the money they have paid. Two things happen, after this:

1. I get a return request from the Israeli 'seller'. So, I lose that sale. Also, the item may be returned in a damaged box (which I have to stand the cost of).

2. Many of my items are purchased because of repeat sales. When some of those customers are disappointed, no more repeat sales. I lose out.

Since all these Israeli sellers appeared, my sales have plummeted. I have a 'Top-rated' seller status and I have earned it, whilst they have just piggybacked onto my hard work.

I have written to those copying my advert but they simply ignore me. I have complained to eBay but they also have ignored me. So much for being part of the vero scheme.

Another very strange phenomena is that the disgruntled customers of the Israeli accounts have have given these 'sellers' an astonishing amount of negative feedback (because customers realise what is going on and feel duped that they have purchased something at almost twice the cost that they could have paid). But, the strange thing is that many of the Israeli seller accounts are showing as 100% positive. How is that possible? I asked eBay about it and they were stumped. Yet, they did nothing to investigate. It all seems rather suspicious. If I didn't know better, I would say that these 'sellers' have somehow managed to manipulate the negative feedback to 100% (despite having, say, 100+ negative comments).

So, it pleased me no end that eBay have finally realised this whole scheme is giving eBay a bad name. Buyers are getting duped and their 'positive buyer experience' (which eBay try to encourage) is being tarnished.

It is no wonder that Israel are taking eBay to court over this. They must realise that a lot of their 'sellers' will lose out big-time.

I look forward to the day when eBay make it a rule that sellers must hold the stock themselves and these kind of sellers cannot dropship at the expesive of the  genuine seller.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: comments This user has validated their user name.

Mon May 14 03:41:07 2018

Hats off to ebay this time. BIG step in the right direction. Ebay deserves a real pat on the back and my sincere thanks! Ebay drop ship sellers are the number 1 thing that makes me buy elsewhere. I absolutely HATE when sellers buy items in my name from a 3rd party site, or misrepresents or buys the wrong item forcing me to return the item directly to the 3rd party retailer. It also makes me feel ripped off and stupid when I get my item sent from walmart/samsclub/amazon when I could have just cut the middle man and shopped there in the 1st place.

I am still hesitant to buy on ebay because of the drop ship problems, but hopefully as ebay gets these dropshippers off the site I will be able to resume buying on ebay as my first choice.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: geoffreymason This user has validated their user name.

Mon May 14 08:18:44 2018

bb6:  I think that the throttling has become more severe and will probably escalate progressively. My sales last week were dismal, but I finally had a pretty good day on Sunday -- exactly two days prior to the end of my ebay billing cycle. All of the orders were from New York City and southern California.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: Snapped This user has validated their user name.

Mon May 14 08:27:04 2018

"I have written to those copying my advert but they simply ignore me. I have complained to eBay but they also have ignored me. So much for being part of the vero scheme."

Sellers who have copywrited material purloined by others need to avail themselves of the DMCA process one can research via a Google search.  VERO members use the same process, but they do not 'work' for eBay as a general snitch, their focus is on specfic rghts holder's products.  If a seller (and most don't) doesn't have a VERO watchdog, they need to be prepared to protect themselves.  It is not a difficult process to transmit a takedown notice to eBay.  And eBay can not ignore it, like they do for such 'complaints' that are not or may not be otherwise more immediately compelled by legal doctrine.  

As for buyers always flocking to the cheap seats, which is the justification for almost every eBay sel-serving 'enhancement' they'e disruptively injected over the last decade, well....pffffft to that.  Else this whole issue would be moot.  

But don't be lookin' for any eBay comment on that particular oxymoronic hypocricy either.  

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by: Chicago48 This user has validated their user name.

Mon May 14 08:42:08 2018

From what I read of you all -- the drop shippers are sending their inventory from AMZ warehouses to Ebay customers?  Yeh, that's just dead WRONG, and I wonder if Ebay has written that in their agreement?  In fact, AMZ should know and be advised  what's going on and stop it.

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by: Barbbie This user has validated their user name.

Mon May 14 08:44:14 2018

@toolguy -Good Idea!
"Sold and shipped by an eBay seller, it WON'T come in an Amazon box! "

I tend to buy from the same sellers so rarely have this issue, but a few months ago I had to order bubble wrap from a different seller and yuck! It came covered in filthy amazon warehouse dirt. It was disgusting and dirty, and this to wrap clean items in. Gross, not buying from there again.

Amazon has the opposite going on there, the same type companies list entire inventories to Amazon from ebay. Now on Amazon, it is a bit easier, when they did it to me I just found all my listings and made them at a reasonable price and the ones that were not appropriate for amazon I did not piggyback on and eventually that person was ousted from Amazon because all he sold were those items that were either out of stock or the photo was, for example, a variation main photo, instead of one of the item so the amazon buyer thinks they are getting 4 items and they get 1.

Ebay should make some kind of rule against this, most of the other venues have rules that you cannot ship to anyone in another companies box or you can be suspended or your account cancelled. Walmart specifically states you cannot use a competitors or amazon box and you cannot fulfill from amazon.

However, I would think that giving price more weight than other best match issues, that should put these drop shippers closer to the bottom, but not always. As for how they are getting negatives eliminated, I think the answer to that is someone on the inside who works for sale freaks and ebay should root that out as well, or it could just be that they are an anchor or enterprise seller and just easy to get them removed.

Ebay has to do something to put themselves in a better light, being known for higher prices and ripoffs is not good for anyone should that become the case.  But I would like to see them change the throttling as that is not good either, if all sellers were shown, it is doubtful these people would flourish on ebay. But ebay thus far as made it so that they can.

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This user has validated their user name. by: VV

Mon May 14 09:06:30 2018

Amazon IS wholesale.

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This user has validated their user name. by: epuise

Mon May 14 09:24:57 2018

LOL... 15-37% higher price on eBay than Amazon... well... DUH... there's TWO Seller Fees... one to AZ, one to E... and, buyers... unless you find that item for $1.00 at a yard sale... someplace is ALWAYS going to be 'cheaper'... that's the way it goes... for EVERYTHING we buy... since when should 'found cheaper' be a 'reason' to return... NEXT TIME... don't buy, until you spend HOURS researching... EARN that 'savings'... but, no... eBay lets a Buyer buy... THEN... shoves in their face... L@@K... this one was CHEAPER... if you buy on eBay... you get eBay bucks... coupons... THAT can & DOES reduce the AZ drop ship cost... these whiny buyers don't MENTION that... maybe they used a Daily Deal Coupon & never actually PAID what the AZ cost was ? - Such BS... this is what you GET... coddling buyers... bottom feeders who whine over a dollar or two... and, eBay... YOU demote small Sellers w/ single ooak listings... for these DROP SHIPPERS w/ 100's of the SAME item... eBay... your chickens have come home to roost...  

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: Whatever This user has validated their user name.

Mon May 14 09:54:26 2018

Well they've been throttling me for a week now ever since they gave me back my TRP - ok I get it - you lost 10% ebay - please remove my status back to moron so I can start selling again

I still waiting for Paypal to start their own venue - then watch the exodus

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: pace306 This user has validated their user name.

Mon May 14 10:31:44 2018

While my fellow posters argue about the pros & cons of drop shipping - it seems odd that the take aways from this article should be"

1) EBay admitted that they indeed manipulated the “best match” search results

- that ALONE is a crime against ALL sellers -

2)  eBay Israel worked closely with SF and other sellers, fully aware of the work method in use and even gave SF and the other sellers “prizes” for outstanding results

- eBay said it was OK until they decided it wasnt (therefore any mention of it being against its TOS holds no water) -

- As an aside, its illegal for eBay to try an implement a ban on drop shipping since the action its self is %100 legal - as long as you put where its shipping from

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This user has validated their user name. by: The End

Mon May 14 10:59:51 2018

I don't like being lied to, telling me the merch is in California, when in fact it's being dropshipped from another country.
Not Kool.

Perminate Link for eBay Throttles Sales to Deter Amazon Arbitrage?   eBay Throttles Sales to Deter Amazon Arbitrage?

by: Ms DCeb This user has validated their user name.

Mon May 14 11:19:27 2018

I noticed there are THREE important facts that are wrong and missing in this article.
1) eBay USA "dropship" and non-dropship Top-rated Power Sellers on a widespread scale, in fact, have been throttled, reducing sales, almost to a screeching halt. Not affecting just eBay Israel.
2) No practice of throttling sales of those dropshipping from Chinese Suppliers, such as Aliexpress.
3) No warning, flimsy eBay Agent excuses saying "Its normal for sales to drop during tax season." with a series of flimsy reasons while in fact on April 3rd, eBay conveniently slipped in a seller policy roughly stating that item locations must match shipped locations.
After more than a month after sales suddenly stopped eBay decided to admit throttling widespread USA as well as Israel Top-Rated Power Sellers, using this new policy to circumvent its dropshipping policy, yet no action was taken against those dropshipping from Chinese suppliers.
It doesn't take a genius, if you pay attention to the direction eBay is moving with promotions to have LOCAL 'brick n mortar" Retail Stores across the nation with "special packages" offering no insertion fees, no store costs and assigned eBay Support Team to begin offering Local pickup copying from Walmart's Selling Platform.
Combine this new direction and Target leaving the eBay Platform due to inadequate traffic to support sales and their Q1 Revenue Report, it's clear eBay lost its standing and traffic share from confusing search for a buyer to easily find what they want to purchase.
It's not difficult to see through eBay's manipulation using their throttling applications to spread out their thin line of buyer traffic to appease sellers of their choice that fits into future growth plans.
Of course, this doesn't even take in consideration the raised Store fees, mostly paid in advance came at the same time when eBay knowingly accepted as they were throttling applications against their accounts.
Sounds to me like eBay is just continuing in a desperate approach to appease stockholders Q2 Revenue Report, anything to avoid their LOW TRAFFIC of buyers by Wenig's own self-inflicted painstaking buyer search functions and failed copying attempts from Amazon's Platform.  

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by: pace306 This user has validated their user name.

Mon May 14 11:42:19 2018

what she said {Ms DCeb}  =)

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by: dander This user has validated their user name.

Mon May 14 11:50:56 2018

Tool
Amazon pickers do not know who the seller is or if the buyer is buying it off ebay.
Amazon goes to great lengths to ensure that the buyers information is confidential. An order is filled placed in a box and sent to a machine that places shipping label on the box. Also Amazon prohibits its sellers from using FBA to fullfill orders from other sites. People game the system all the time, but they do get caught.
For the rest of you lawsuit happy sellers, read the user agreements. You consent to a ton of things when you sell on these venues, including class action lawsuits. Life isn't fair and we can bitch or we can adapt

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by: wilburnet This user has validated their user name.

Mon May 14 12:09:55 2018

Interesting article and confirms that Ebay does limit selling listings in search

Its not just in the USA but the UK is the same, Im in a Ebay UK facebook group and there are a lot of posts from dropshippers experiencing a huge drop in sales and listings removed and once they contact Ebay DS about it they are told because your a dropshipper. The upside is a lot of those Israeli sellers with Ebay UK accounts either have closed the account or Ebay removed all their listings. Most likely because they were not VAT registered.

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