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E-Bay: Caveat emptor.
Editorial by Tom Demerly.

Tom Announces Race.
It 's an idea so simple and elegant you kick yourself for not thinking it up. Host a website where people sell stuff to the highest bidder. It's accessible to the entire world. You can sell and buy all kinds of things. It's fun and fashionable.


E-Bay is an incredible resource, excellent idea and a well executed concept.

In many ways, good and bad, E-bay is a microcosm of our society. It reflects all that is great, benevolent and amazing about the Internet. And what is evil. Like society, it has lots and lots of good, well intentioned people and a few rotten apples. There are also some blithering idiots thrown in there that may be well intentioned but too stupid to do things correctly.

And, just like the real world, there is no one to hold your hand on E-bay. It's "caveat emptor". Let the buyer beware.

We love E-bay here at Bikesport. We sell a lot of stuff on there. I sell my old bikes on there, old parts, even clothing. Bike companies such as Cannondale and Litespeed prohibit us from selling new inventory on E-bay by signing dealer agreements. They are concerned they will "loose control" over the distribution of their products. In many ways, this is a valid concern, so we rigidly adhere to these agreements.

Otherwise Cannondale, Litespeed and others would stop selling bikes to us.

The great thing for us is, we'll look at a given item we want to get rid of (in compliance with existing dealer agreements) and say "We have $500 into that thing". We put it on E-bay and start the bidding at $1. It never fails, I don't know why, but we wind up getting $600, $700, $800 even $1000. We always get more than we expect on E-bay. It has been a huge cash cow for us. Before E-bay I really took a hit when I sold one of my used bikes after a season of hard use. Not any more. Now I turn a profit. In general we get an employee purchase discount on the bikes we buy for ourselves here at the Bikesport. It is usually 15% off standard wholesale, so it is a pretty good deal. We ride it a season or two, take good care of it, list it on E-bay and get well above what we originally paid. It's a "great deal for us.

Now, if you're buying: Well, I can tell you the bikes we have been selling have been accurately and fairly represented. Every ding, dent, scratch and crash (if there are any) is documented in the description. If there is any problem with the bike we try to actually post a photo of the problem specifically. I think our bidders appreciate that. We always throw a little something extra in the box with the bike (or whatever) for the customer. Maybe some Powerbars, a Ziploc bag of Gu packets, a free T-shirt, whatever. It makes people feel good about their purchase.

However, we have had three customers bring bikes in they bought on E-bay from other sellers with major problems. Each of these three bikes had broken frames. Two of them were not even close to being the right size.

I'm not sure if the people who sold these bikes knew they were broken, or didn't realize it. But they were.

In the course of researching this editorial I read a lot about E-bay. I read, in detail, their user agreement and found some interesting things. For instance: E-bay is not an auctioneer or auction website. As defined in their User Agreement, section 3, Part 3.1 it says:

"Instead, our site acts as a
venue to allow anyone to offer, sell, and buy just
about anything, at any time, from anywhere, in a
variety of pricing formats, including a fixed price
format and an auction-style format commonly
referred to as "online auctions" or "auctions.""

The user agreement also states that:

"As a result, we have no control
over the quality, safety or legality of the items
advertised, the truth or accuracy of the listings, the
ability of sellers to sell items or the ability of buyers
to buy items. We cannot ensure that a buyer or
seller will actually complete a transaction."

This is valuable information but it is buried pretty deep in the fine print. The reason this may be significant is people might think otherwise. If they do, they're naïve.

Another thing I found on E-bay's user agreement was encouraging. These are the five fundamental values that guide the "E-bay Community":

1. We believe people are basically good.

2. We believe everyone has something to contribute.

3.We believe that an honest, open environment can bring out the best in people.

4. We recognize and respect everyone as a unique individual.

5. We encourage you to treat others the way you want to be treated.

This is a great set of rules. It stands for a higher good. If everyone adhered to these standards E-bay would be an online Nirvana of Internet commerce. For the most part I think people do try to stick to these rules. I've bought a couple things on E-bay including an expensive watch. I did a lot of research on the seller before I submitted payment. Each transaction went smoothly but required a lot of work and a little nervousness. Would they disappear with my check or my credit card number? Would the merchandise be as represented or a fraud? You can't know until you find out- then it's too late.

There are some pretty hefty frauds on E-bay. Some intentional, Some not. I'd like to believe the three bikes we saw with broken frames were unintentional. However, a seller in Hong Kong stole photos of a Cervelo P2K from our website and used them to sell fictitious P2Ks on E-bay. The bikes never existed. He claimed the photos he was showing were the actual bikes he was selling. They weren't. I shot those photos in our store and a poster on the forum alerted me to the scam when he spotted them on E-bay. Several people, Slowtwitchers among them reported this. E-bay administrators removed the swindle and the fraudulent user's posts on E-bay. While E-bay may hope everyone is basically good, there are some people out there willfully committing fraud. They are in the overwhelming minority however. The group accidentally committing fraud because they don't know their equipment is broken, in ill repair, worn out or listed incorrectly is much, much larger.

Another dimension of this phenomenon is E-bay seems like the Pet Rock of the early 2000's. It's cool and "savvy" for people to say they bought something on E-bay. It's super trendy right now.

I might suggest that, based on our experiences, the people selling on E-bay are the smarter ones.

However, for the E-bay equation to continue working there needs to some reasonable relationship between the number of buyers and sellers. The buyers will eventually realize they really aren't getting the deal of the century. What is now fashionable and trendy becomes a "sucker's" game. Prices on E-bay are often somewhat higher than if you just bought the same thing locally. Other bidders (some of who are intentionally bidding items up for friends who are selling to insure highest selling prices) are driving up E-bay prices. Someday the number of sellers will exceed the number of buyers if enough people figure this out. I guess that works too since then, prices will automatically begin to fall.

So in addition to E-bay's five rules that make their site a warm, fuzzy little "commune" of Internet commerce there are some potential problems that are very real. Like everything else in our world. As I mentioned, it is a microcosm of our society: Good and bad.

I am not condemning E-bay. This is more of a reality check. The things I bought on E-bay I had good experiences with. But, as a retailer by profession, I am a savvy buyer who did exhaustive homework. I bought things that are hard to find and some of them I paid a premium for. In only one instance would I say I got a "bargain".

As for the people who have bought things from us on E-bay? Well, I can tell you honestly, they paid a good deal more than I thought they would. I opened the bidding at $1 and they set the price, not me. That is how the site works. E-bay seems (to me) to favor the seller. That's just fine with me since I am predominately a seller.

As for the buyer, Caveat Emptor: Let the buyer beware. And enjoy your new Pet Rock. Can I interest you in a Segway Scooter?

Send us your feedback on this editorial here.


© Tom Demerly, Bikesport Inc.
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