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

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

Thu Nov 30 09:19:46 2017

This is funny because eBay is already involved in the sellers pocket as far as 'inserting itself' into the payment process, because they are already doing automatic returns and can remove money from your PayPal account at any time for virtually any reason including fraud.

This has more implications because eBay is planning on becoming a product distributor in the future, they will be shipping their own inventory soon, Devin has destroyed the marketplace for 3P sellers, so this is the only way they can show growth now.

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

by: twatson This user has validated their user name.

Thu Nov 30 09:44:57 2017

HORRIBLE HORRIBLE idea....ebay upper management is all about GREED.  I have had the same account buying and selling on ebay for over 18 years.  The small to medium sellers are being pushed out for all the sellers from China.  Items listed from China and Hong Kong are coming up first in all search types and other items are not even seen anymore.  Ebay was a great place to buy and sell and ebay upper management is absolutely going to destroy it.  Items are not owned by ebay and ebay should only be a servicing company and they should not be even thinking of holding sellers money.  They just keep increasing fees, lowering discounts and now wanting to hold our money while giving TOP search features to China companies.  GREED by upper management will be ebay's downfall if they don't start being fair to everyone.

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 10:03:43 2017

Everyone's eBay model is different!

When I search eBay I find VERY FEW chinese items but that's because the items I'm searching for are mostly made in the USA

I have no problem finding items in search as most of the items have fewer then 1 or 2 pages.

Selling my items are also not that difficult as my buyers only have to look at 1 or 2 pages of results.

I have problems with eBay but they are few and far apart.

I will be happy once I can accept US Postal Money Orders again.

New eBayers with little feedback concern me when they buy items over $100, if I had control I would make new buyers pay with a USPS Money Order where I know I can't be ripped off.

As far as eBay being the money processor I DON'T like the idea, it's just another hoop to jump thru and it would slow down the money process which I can't afford.

We shall see where the USS eBay takes us in 2018. . .

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

by: dans parts This user has validated their user name.

Thu Nov 30 10:26:19 2017

@Tool -

I've seen counterfeit USPS money orders - we had a flood of them in our area about 2 years ago.

Few and far between?  Yes, but still out there.

That said, I'd also jump at money orders for payment again, too, although I think all my customers are now lazy and don't want to do anything other than PayPal.  Every time I offer something to someone and ask for a money order for payment (yes, Virginia, these are - horror of horrors - off eBay sales), I hear nothing further from them, and the item still sits here.  Even reminding them I'm 100% Feedback 18,000+ strong doesn't have any effect.

eBay has changed the Buyers' behavior for the worst - gotta have it NOW - no I won't expend any effort other than clicking to get it...etc, etc.

Three more years til I'm 70, and I'll have a big onsite "real" auction and tell eBay to "kiss my grits."

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 10:37:30 2017

@dans parts

If you get a counterfeit USPS Money Order the Post Office will refuse to take it.

No item will be shipped!

If the post office cashes it the item ships out. . .

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

by: Geetar This user has validated their user name.

Thu Nov 30 10:47:11 2017

Oh Please! this will be another way for ebay to suck more funds out of sellers pockets in one way or another. Ebay no longer does anything to dive traffic, it just finds new and improved ways to charge sellers more.

Sellers complain about the fee's, but as long as the traffic is coming, and sales are good they are happy. This is no longer happening. They put commercials on tv, when nobody watches tv anymore. They bypass google, and dont do what they need to do to get in the search results. After years of this, it is finally showing. Traffic is bypassing ebay, and going to amazon, and a handfull of others.

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This user has validated their user name. by: iheartjacksparrow

Thu Nov 30 11:02:39 2017

eBay being the "go-between" in the payment process would be the death knell for small sellers. First, the seller wouldn't have access to the money for however long eBay decides to hold the funds, and then the seller would have to spend time making sure eBay didn't accidentally on purpose  "forget" to transfer all the money the seller was due. Coupled with all the famous eBay glitches, which they seem to have no desire to resolve unless it's costing eBay money, and I can foresee a complete disaster when money isn't paid out on time or in the correct amount.

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

by: b86fiero This user has validated their user name.

Thu Nov 30 11:09:02 2017

If ebay wants to buy my entire inventory, warehouse it, sell it, ship it and deal with returns - then send me a bank deposit once a month - ebay can handle the financials.  
Otherwise, it's my merchandise, my financial investment, my sales - MY business - and they can keep their greedy paws out.

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: RKTOYS

Thu Nov 30 11:20:08 2017

I hate this idea because it makes tracking individual transactions harder.  I actually keep track of everything business related in a database (not Excel or Access, real SQL Server).  When eCrater can't manage to break down my fees, it creates work for me.  When my suppliers can't/couldn't deliver discrete orders in a single shipment, it creates work for me.  With how much is broken at eBay, from HTML-only e-mails I can't read in my mail client to missing fields from File Exchange and "oops try again" when they "accidentally" disconnect PayPal/bank accounts, I have no faith in eBay providing a fee breakdown, let alone an accurate one.  That's on top of the already mentioned likelihood of them dragging their feet on disbursing funds that are increasingly critical due to their traffic manipulation and the reduced volume that has resulted.

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

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

Thu Nov 30 11:27:08 2017

Devin is a disgraceful idiot, he has ruined eBay as a venue and is going to convert the marketplace into eBay distrbution with them fulfilling their own inventory.

This is why you see this when you search for: air compressor

Welcome to the new eBay shopping experience

If you prefer, just view search results.

eBay Deals and all the rest of the BS, GD, price matching is just part of the strategy to convert eBay into a direct seller.

The marketplace has been ruined already for 3rd party sellers, Google knows it, so do the sellers.

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: eXtinctBay

Thu Nov 30 11:31:29 2017

NO WAY buyers will go back to paying by money order- people are not going to make a special trip to a store, bank, or post office (and spend money) just to buy something on eBay.

When PayPal was free, they were able to to make their money because of the ''float'', or amount of time they held onto a sellers money before it was transferred to a bank account. The interest from the millions of dollars of transactions daily was all the income they needed.

If eBay is able to keep money from its sellers, there is definite profit from this. And if they receive a discount rate with a payment processor, of course the savings will go into their pockets. Much like they already do with shipping labels- eBay purchases them at a ''Commercial Plus'' or other negotiated price. Then we are charged higher ''Commercial'' rates from eBay Shipping.

And, of course, having eBay hold onto money a seller has earned cannot be a good thing. There is a potential for many problems here. Imagine what they could do if they have control of your funds- forced 60 day free returns comes to mind. Or even other silly anti-seller rules. Don't like it? The option would be not to sell on eBay. It seems that this (if enacted) would be another method to rid themselves of small sellers.

This would leave the door wide open for sellers to offer their wares on Facebook, other sites, or just start their own websites. Do not think eBay can afford to suffer the same fate as Etsy- a mass exodus of vendors would greatly hurt the value of the marketplace.

This needs to be thought through carefully by eBay before they decide to keep money from its sellers for any period of time. May be a true ''make or break'' moment for the future of the site.
.

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

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

Thu Nov 30 11:47:34 2017

Devin is a moron, first he wants 'Brands' to sell on eBay when the entire concept of his marketplace is to create a race to the bottom with his casino cross promoted sponsored ads on sellers listing pages.

No brand wants to sell on this basis, so I'm sure Devin in his great deceit will find a way to not cross promote on their pages like he does on his small sellers pages.

When eBay starts selling their own inventory you can bet your life that no cross promotion will exist on those pages.

Devin has made an abomination out of eBay and eBay strategy could be illustrated by a chicken with it's head cut off.

This CEO of confusion has to be forcibly removed from eBay HQ by security or the Titanic is sunk.

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

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

Thu Nov 30 12:01:41 2017

See the comments on Down Detector for a dose of reality on Devin's master plan and how it is working out for sellers.

http://downdetector.com/status/ebay

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: eXtinctBay

Thu Nov 30 12:11:20 2017

@ESB

You state that eBay is planning to fulfill orders themselves. What evidence do you have of this?

They are not going to spend the money to lease warehouses, buy equipment, and hire the necessary personnel to make it work. And ''FBE'' cannot be a reality without at least a small percentage of 3P sellers participating. Would you trust sending your merchandise to eBay?? No, and not many other folks would either.

What eBay is wishing for is to be an intermediary for brands- they handle the transaction, and the manufacturers ship the goods. But wouldn't it be simple enough for a company to just start their own website, and do everything themselves?

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

Thu Nov 30 12:12:11 2017

NO NO NO

If I want to wait to be paid, I will go back to the corporate world where I will make more money, get insurance, and have paid sick leave and vacation. With the fluctuations in sales caused by visibility issues, endless glitches, and the string of limits placed on sellers, it's difficult enough to keep my cash flow straight. A change such as this would make eBay an even bigger headache than it is now.

If Ebay goes down this path it will no longer be a primary income source for me. It will likely be the end for many sellers and curtail activities of a good deal more.

They need to consider all of the ramifications of such a decision. Not just the daily float and fees they will generate.

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

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

Thu Nov 30 12:14:21 2017

eXtinctBay

This is the reasoning for the change in payment, and Ina has already wrote articles on eBay selling their own inventory.

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 12:31:16 2017

@ESB

You think eBay has problems look at Amazon!

http://downdetector.com/status/amazon

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by: thriftyone This user has validated their user name.

Thu Nov 30 12:31:32 2017

Here is the full transcript from seeking alpha:

https://seekingalpha.com/article/4128245-ebay-ebay-prese
nts-credit-suisse-21st-annual-technology-media-and-telecom-conference

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

by: pace306 This user has validated their user name.

Thu Nov 30 12:37:50 2017

Theres more to "all of that" besides what the article speaks about.

Items not mentioned

1) how does being merchant of record effect who pays the %3 vig to Paypal?

LEGALLY (and eBay is well known to love doing these kinds of illegalities) at this moment in time the SELLER is the merchant of record - its just that eBay inserts itself into the process and assumes control. By all normal reasons/methods - when an issue arises even on an eBay related purchase, Paypal should listen to the seller and NOT eBay - since they are "the merchant". But of course this doesnt happen.

Any change in this indicates that eBay is nervous about the apparent issues arising from its making up its own laws and removing legal ersponsibilities from the seller.

Remember eBays past - they ONLY do something when 1) theres money in it for them 2) they are afraid of legal ramifications

2) Tax issues and collections.

eBay has been lobbying sellers to take up the fight for tax reform. They claim its to help themselves (sellers) - but is it?

If eBay becomes the merchant of record ..... then THEY are responsible to pay the taxes should a seller default (though they would try and insert language into the TOS to negate this). I cant imagine that eBay legal would want to put themselves in the middle of it all unless they can get an airtight rulin on who would be responsible for said taxes

3) eBay WOULD NEVER (ignore all smoke and mirrors) allow any other payment methods - since they would have NO CONTROL over issues like returns, defectives and non shipment. Of course as mentioned before they could try to craft a new updated TOS to cover all that - but it could never really be enforced.

The flip side is - what onus does that put on to Paypal. Theres a reason they ask you when you call (the automated attendant) whether or not the transaction you are calling about occurred on eBay. eBay is an albatross (around anyone's neck) and just because the last ceo was a previous eBay ceo, doesnt mean he that doesnt know the truth of it all - he should - helped create the monster its become.

4) Paypals distancing itself from eBay is the best thing that could ever happen to it. Paypal employees should get down on their knees and thank what ever god they believe in that the 2 companies are separate. Its given them legitimacy that they could never get if attached - and a change in rates, a change in status - could help - ie they only have to bill (1) person for all of this - eBay and eBay takes on full responsibility for everything.

5) Merchant fees. You can hear Devin thinking out loud ...Now sellers pay %3 percent (or what ever it really is) .. Paypal can charge us %2 (since we are safe non risk account and have the float to cover any issue) and we can make an addition %1 or so (think of the billions they could make!.

6) Additional CS ... I dont see that that would cost them anymore then it does now. What ever pennies they pay CS agents in Manila is small potatoes to those Billions .... besides - what CS does it really require??????? The process change would be INVISIBLE.

Beyond all this - with out traffic - its all irrelevant  

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

by: thriftyone This user has validated their user name.

Thu Nov 30 12:37:54 2017

This is an interesting article....Seems to me that the US needs to adopt the same policy.....https://www.forbes.com/sites/wadeshepard/2017/11/22/as-amaz
on-and-ebay-flood-with-illegal-goods-from-china-beijing-cracks-down-on-foreign-e-commerce/#69e03aeb4dfd

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