Ina Steiner EcommerceBytes Blog
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by Ina Steiner, Editor of EcommerceBytes.com
Sun Sept 16 2012 21:24:17

Point Counterpoint - Ending eBay Auctions Early

By: Ina Steiner

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Do you think it is fair for a seller to end an eBay auction early once a bid has been placed? That's a question we posed to our readers, and the results are in: 56% said it's okay, while 44% said it's not okay to end eBay auctions early.

This is a timely debate, as beginning October 1st, eBay will start charging sellers a fee to end auction listings early if they have received a bid. (If the listing has a reserve price, the bid must be at or above the reserve price.) eBay will charge a fee equal to the amount of the Final Value Fee it would have collected had the listing ended naturally and sold for the highest bid received when the seller ended the listing.

eBay acknowledged there are times when sellers need to end listings early - in its advice for sellers under "Best Practices," the company suggested ways to minimize these situations. eBay will also allow sellers one chance to end a listing early without incurring a fee: "In rare situations, a seller may need to end a listing early, so the fee will be waived the first time a seller ends a listing early each calendar year."

Many readers said it was up to the seller to decide whether to end a listing early with no penalty from eBay. "The fact is that until the item sells, it belongs to the seller and nobody should be able to dictate what the seller can or can't do with their item," wrote one reader. "I'm sure eBay is paranoid that they might miss a nickel on items that are sold off eBay, but there's only so much of our lives that they should be allowed to control."

Some sellers mentioned family emergencies or weather-related events outside their control - "Last year, we had a major snowstorm, in October, which knocked power (and most cell service) out for a week. Luckily I was able to find a little spot of service, cancelled all bids and listings - and I did contact ALL bidders including the under-bidders. When I re-listed those items, I put a little note on each listing mostly to explain to the previous "watchers". It was a lot of work but worth it. In cases such as extreme regional weather Ebay should waive those fees or at least post an announcement and not penalize the sellers."

Another reader wrote, "As a seller, I want the choice to end an auction, to be mine and if I do so, I understand and will accept the consequences from the bidder. To receive yet another form of retribution from eBay, adds insult to injury. Once again, one size does not fit all."

On the other hand, many readers recognized that ending auctions early led to disappointment on the buyers' behalf. "As longtime sellers we feel ending an auction early after a bid has been placed it detrimental for both the buyer and seller. It obviously is going to upset the buyer (who after searching eBay to find the right deal for them) is forced into starting from scratch - waste of time. For the seller it lowers their credibility - why place a bid on their auctions only to have the auction cancelled - poor business!"

Another wrote, "A bid should be legally binding, for the seller as well as the bidder. If I make a bid on something I'm agreeing to purchase the item at whatever my highest bid is. If the listing disappears before the auction is set to end, it's very unfair. Seller should be held to the same expectations that the bidders are. The item will go to the highest bidder at the end of the auction. Period."

One reader felt that eBay must be seeing a higher incidence of sellers ending auctions early - "If eBay sees certain sellers ending a high proportion of auctions early, there is probably "something" going on."

We selected sellers with differing opinions and asked them to expand on their comments in the survey outlining their experience with offering free shipping. In Monday's newsletter, we run the two articles.

In the first article ("Point"), two sellers explain why it's okay for sellers to end eBay auctions early even after a bid has been placed. In the second article ("Counterpoint"), two other sellers explain why they believe it's not okay for sellers to end auctions early. Thanks to all four sellers for participating!

Now have your say - do you think it is fair for a seller to end an eBay auction early once a bid has been placed? Does the risk of disappointing auction bidders outweigh sellers right to decide for themselves if they wish to end auctions early?




Comments (34) | Leave Comment | Permalink

Readers Comments

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This user has validated their user name. by: Basset

Sun Sep 16 23:01:12 2012

Hmmmm.... I sell very little on the auction format - mostly fixed price here.

I'm trying to think of a live auction situation where an auctioneer is holding up an item in the ring & bidding is going on. Never have seen a seller run up and grab the item out of their hands, turn to the bidders & say ''never mind''. One might get whooped over a stunt like that. At the very least it would be frowned upon.  

 

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by: Henry This user has validated their user name.

Sun Sep 16 23:10:47 2012

I think it depends on why the auction is being ended early.  Maybe the item got broken or damaged.  It is possible the item was lost or stolen.

Having said that I don't believe an auction should be ended early just because the bidding did not reach an acceptable level for the seller. Start the item at a higher price or put a reserve on it.

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

Sun Sep 16 23:14:30 2012

Yes, if the item goes to the highest bidder at that time.

No, if the item is withdrawn from sale, unless there are compelling reasons for that.  Too low a bid is not enough of a reason.  Starting bid should be one that seller is comfortable with.

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by: Steevo This user has validated their user name.

Mon Sep 17 00:24:28 2012

Ending auctions early is done because of the overcharging for reserves.

Let me tell you how it is on live auctions:  If the seller is not happy with the sale the auctioneer is directed to pass that item by. The auction company works for the seller. Make no mistake about that.  

The seller is the seller and no sellers wants to sell things for ridiculously low prices, only on ebay does that go on, which is why I rarely do auctions anymore.

It's not right for ebay to have raised the price of reserves as much as they did 8 or 10 years ago, but I understand why they did it, some sellers were taking advantage.  

They were listing a $12,000 Cisco unit for 99 cents with a $14,000 reserve and a toll free number in the listing.  So when a buyer called they could sell it for $4000 and they weren't troubled by any high ebay fees.

As a countermeasure ebay started overcharging for reserves, it changed the face of ebay auctions at that time.

It was the wrong approach then and it's still wrong. Reserves serve a valuable function, a reality check. Without reserves, you get auctions full of junk! Ebay did it because then like now, they are very naive as a company and they don't understand how business really works.

Now that is over they should return reserves to use and charge 25 cents, then reality can set in for buyers again.  No more free rides.

It makes no sense at all having only ''absolute auctions'' on ebay, that never goes on in the real world except in the case of bankruptcy court involvement.

Ebay is very stupid forcing that. Monumentally stupid, and ebay is chock full of junk because of it.

Have you ever been to a live auction?  Reserves are standard.  A 13% or more buyers premium is standard.  If those were not there that auction would not be being held that day!  It's just reality.

As an auction buyer you should be glad the economics support having that auction that day! You will be able to buy things!  

No one is going to take a $3000 item and sell it for $13 because no valid bidders saw it or were able to bid, or worse there was collusion, which I have witnessed myself.  

Only on ebay does that go on. Valuable items are always protected on live auctions.  ALWAYS! The seller would not pay the auctioneer if he didn't protect the valuable items.

Ebay should try to mirror live auctions as much as possible in this area.  And anyone who actually expects to get a $3000 item for $13 should just turn off their computer.  Go take a walk or something.

If this were all done there would be very interesting and valuable items on ebay for sale. Instead of the Chinese junk there is now.  

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by: comet This user has validated their user name.

Mon Sep 17 00:25:18 2012

I have seen items that a consignor at a brick and mortar auctions has placed for sale be "withdrawn" during the sale  IF the item did not reach a price--even IF the item had NO RESERVE.  IT doesn't happen often but it DOES happen.  


And altho I expect that the bidder would NOT be happy with the decision I don't really know what they could do about it.  They could  choose to not return to that venue tho.  

But I agree that unless there are compelling reasons--like the item got damaged--that could be proven with a photo --that MOST auctions should run their course.  If the seller suddenly realized that their  "reserve" was way low well then they might have to bite their tongue and pay the cancel fee and re-list with the proper reserve.  

I see ALL THE TIME on Motors that car and motorcycle sellers "Reserve the right to sell locally" and end auctions early---are THEY going to be penalized????

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This user has validated their user name. by: bitbybit

Mon Sep 17 00:47:46 2012

Since 2008 JD has been doing everything to make auctions disappear. With that being said, most auctions seem to end with either no bids or the opening bid. The pressure is on the sellers to start the auctions with higher and higher starting bids AND free shipping. Now eBay is going to end ''Time ending soonest'' in best match. Do you see where this is going? Either the seller has to start with pretty much a opening bid comparable to what a seller would want for a fixed price or take a chance with a low opening bid hoping multiple buyers will find the auction.

Take for example an auction starting at $9.99 for 7 days. Few views, watchers and zero bids with the auction ending within a day. Now the seller is hoping and praying for signs that their item will get a flurry of last minute bids. However the reality is the item will be pretty much be given away at the $9.99.

Of course, it does depend on the item but ebay (little b now) will make a killing on fees for auctions ending early. They are betting on this since they have already bled sellers of every other fee. So ebay benefits either with a higher GMV (making them look good on paper) or with even more fees ripped from sellers. Always a lose proposition and a gamble for sellers trying to stay alive by having auctions.

What it really boils down to if your auctions are being seen. Rolling blackouts, punishing DSRs, ebay search manipulation etc. Add on, as previously stated, weather conditions, personal events beyond a sellers control, ebay glitches etc. Also ebay has updated their user's agreement to make the seller FULLY accountable and ebay completely blameless in any and all situations.

So the buyer may be disappointed in an auction ending early. Too bad, so sad. But the seller's loss is immeasurable in comparison.

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This user has validated their user name. by: Philip Cohen
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Mon Sep 17 02:02:27 2012

I agree with “A bid [above any set reserve] should be legally binding, for the seller as well as the bidder. If I make a bid on something I'm agreeing to purchase the item at whatever my highest bid is.”

That is what an unreserved (or mortgagee sale) auction is all about, sans a very good reason for a withdrawal; if you don’t like it then sell BIN, or set a reserve (if allowable) or start your auction at the minimum you are prepared to accept …

eBay does not want sellers to set a reserve, hence the fee; they want your stuff to sell, regardless of the price, because they desperately need the maximum fee they can extract from every listing; it’s bad enough that many auctions now roll over with not even one bid …

Steevo says eBay should revert to a 25c fee for setting a reserve; you’ve got to be kidding; nothing would ever sell then, and eBay would be collecting only 25c on the majority of auction listings.

Why do you think eBay is applying the FVF to cancellations? Because (a) they desperately need the revenue, and (b) too many unscrupulous sellers are cancelling their (fee-avoiding) nominal start auctions after failing to achieve, or shill a genuine bidder up to, an acceptable price.

Yes, an auctioneer will sometimes refuse to sell an item of some value at a too low bid, but the bidders don’t actually know whether or not a reserve has been set; and a bidder can always then negotiate afterwards …

Don’t kid yourself, Donahoe has literally “stuffed” eBay, and if you don’t believe me, take a look at the completed listings of two eBay-favoured sellers, “toysrus” (BIN) and “eforcity” (BIN/auctions); both are barely afloat in oceans of “red” unsold listings; the sell though rates are abysmal …

Auction sellers should take some lessons from Corri McFadden at “eDropOff”; she knows how to get hordes of bidders and sell, sell, sell, and eBay just loves it; they are totally unconcerned that the great majority of the bidding on eDropOff’s auctions is shill bidding; to eBay, at this desperate stage, a sale is a sale, regardless of whether it is real or faux …

eBay / PayPal / Donahoe: Dead Men Walking

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by: xcergy This user has validated their user name.
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Mon Sep 17 02:17:20 2012

What BS.  I can't tell you the times I offer an item at an underpriced opening bid yet sells w less then 5 page views, and sells wo a bidding war.  A deal is a deal.  The CUSTOMER gets the same quality service whither I make a profit or not.  The non-paying buyer has nothing to do w this equation.  Reserves?  As a buyer, I never bid on them, and those that choose to use that option deserve to loose the insertion fees for that option.  Never list an item for a lower amount unless you are willing to play that game.

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by: xcergy This user has validated their user name.

Mon Sep 17 02:23:02 2012

DUH!!!  What part of LOSS LEADER do sellers not understand?  Raise your opening bid prices if your are afraid of not getting the price expected.  It's called bite the bullet and lesson learned for future sales, but the buyer should never be expected to learn from your mistakes from a poor sale.

eBay has a deaf ear to whining, and rightly so on this issue.

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This user has validated their user name. by: Philip Cohen
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Mon Sep 17 02:23:32 2012

Bob says "eBay has taken away the seller's ability to manage buyers' experiences as they see fit and is another step in the wrong direction."

Not so. Sellers can still do whatever they like. All eBay is saying is that if you do cancel early they now want their fee based upon the highest extant bid ...

For once, I see nothing unreasonable about that situation—what am I saying!

eBay / PayPal / Donahoe: Dead Men Walking

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This user has validated their user name. by: bitbybit

Mon Sep 17 02:55:24 2012

Unless as a seller you have been burned by selling a valuable item at a great loss, you won't understand. Starting a honest, no reserve auction for $9.99 and letting it run its course, and then experiencing ebay glitches, lost in search issues and now with auctions not showing as time ending soon in best match. So yes you can start higher but then have no one look at your auctions because the price isn't .99 cents or 9.99. Let me ask you..how does an auction work with no time ending soonest? Unless a buyer knows how to change the default with the drop down menu, then there will be even fewer buyers bidding on auctions. Doesn't anybody see that this is a big ebay setup for dismantling of even more sellers especially those who sell in the auction format?  

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This user has validated their user name. by: Philip Cohen
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Mon Sep 17 02:56:26 2012

Karen says “Bid retractions are tracked by eBay and, if excessive, then they take steps with the buyer.”

In you dreams, eBay “takes steps with the buyer”. I’ve watched ~20 shill bidding IDs on eDropOff’s auctions each with literally hundreds of bid retractions, one with currently 347 retractions in the past six months … eBay could not care less about such shenanigans …

There is one commercially supplied shill bidder on eDropOff’s auction #251098661420 that had made 10849 bids on 5668 auctions in the then past 30 days with 97 retractions in the past six months; those stats have been allowed to roll off and it is now showing only 264 bids on 233 auctions with 98 retractions … not a peep from eBay …

You are all seriously deluding yourselves if you think eBay cares about anything except their bottom line; not even the US Criminal Code is allowed to get in the way …

eBay / PayPal / Donahoe: Dead Men Walking

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This user has validated their user name. by: Basset

Mon Sep 17 07:57:54 2012

I went to fixed price because too many of my auction format items were selling for starting bid (started at $9.99). I tried raising the starting bid to a price I would be happy with, but it seemed like ''Fixed Price'' items at the same price sold better. Who knows, maybe people were searching by ''fixed price''. But depending on your category, setting a fixed price is not always that easy.

@Steevo - usually the auctioneer would announce if an item was a ''reserve item'' at the midwest farm & estate live auctions I attended. That I understand. But how would a seller stop an auction once bidding started? I never saw that happen - do they have a hand signal for the auctioneer? Do they bid on it themselves? Let one of the ring guys know? I just never saw that happen, I can't imagine the auction company would like stopping an auction in the middle of bidding. Just curious on how this is done.  

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This user has validated their user name. by: Rexford

Mon Sep 17 07:59:17 2012

These days many small sellers feel that they get little or no visibility on eBay.  Searches on eBay using IE, Firefox, and Chrome can yield different results.

Due to this fact, I would never even start an auction at a price that I was not willing to live with.  So many auctions are ending with one bid these days.

I don't know if there are any laws in the US that are related to how auctions should be conducted, but my guess is that if there is, eBay is totally ignoring them.

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This user has validated their user name. by: Basset

Mon Sep 17 08:02:20 2012

@ Steevo  - my question in the second paragraph is about stopping ''non-reserve'' live auction items. Thought I'd better clarify:)

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This user has validated their user name. by: Philip Cohen
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Mon Sep 17 08:40:30 2012

Until the auctioneer's hammer falls, the auctioneer is under no obligation to sell to anyone ...

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by: Bethofvt This user has validated their user name.

Mon Sep 17 09:13:01 2012

I have many times had so many questions about an item listed, that i found it was mandatory to make changes, correct errors, etc in a listing that already has bids. The only way to do that is to end it early and relist with corrections and additions.

I often list things and later get valuable information about them from others who email me. A few times I have been notified that I have an incorrect picture in a listing. Ending the auction is sometimes necessary and the only right thing to do.

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by: JoJo This user has validated their user name.

Mon Sep 17 10:42:01 2012

The time when you could list a cool item for $.99 with no reserve and be reasonably assured it would close at a fair market value is so far gone in the past that it's just a distant memory.  Whatever the reasons for losing that ability, ebay fees, ebay mismanagement, changing marketplace, dwindling buyer traffic, poor search results, or whatever, it's just not a safe move for a seller anymore.

Those who still use the auction format should list at a starting price that is the minimum they would accept for that item and let it go from there.

There are plenty of valid reasons to end an auction early, but not getting your price isn't one of them, not in online auctions.  Real world auctions have a different set of rules.

However, ebay punishing people for doing so... Whatever.  They're definitely becoming more and more controlling and certainly harder to deal with.  You won't catch me listing on ebay anymore anyway.  I just list my nifty things at the price I want on Etsy and leave it at that.  

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by: Steevo This user has validated their user name.

Mon Sep 17 11:40:05 2012

Basset,
One auctioneer told me he'd ''sell it to the wall''.  They have a bidder number for this purpose.  You'd never see it.

Live auctions are confusing to watch, and that's intentional. This isn't an IRS sale, the seller is trying to make money here, and the auctioneer works for the seller.

I hired an auctioneer to conduct an auction, all my industrial stuff.  I gave him guidelines and minimums on some items, I should have done that on all of them because he ended up selling lots for $5 to cheap guys who went to all his auctions for that type stuff.  He sold 100 lots that way.  

If I did it again I would set a minimum to prevent that. That's what sophisticated sellers do.

Those guys wouldn't have liked it but they'd have paid, or left empty handed.  But heck, I didn't need the few hundred dollars I got for that 100 lots either.

The funny part is some of these guys are now trying to sell that stuff on ebay.  One has listed the same items on 30 day listings with best offer 7 or 8 times. I know because I specialize in unusual industrial items, I can recognize that stuff on ebay.

I could have told them, I do this for a living, if those could have been sold on ebay I'd have sold them. In most cases I tried. Heh.  

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by: FREDDY This user has validated their user name.

Mon Sep 17 11:56:54 2012

IT'S OKAY TO HAVE REASONABLE CHARGE. I THINK THE ONES UPSET MAY HAVE THE SAME ITEM LISTED IN 5 DIFFERENT SITES. IF IT GETS SOLD IN ONE THEN CANCEL THE OTHERS.  YOU GET FREE LISTING IN AUCTION? THEN PULL IT- YES THERE SHOULD BE A CHARGE OF SOME TYPE.

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