Friday, October 7, 2011

The Fundamental Flaws of Selling on eBay

I have been selling cards on eBay for roughly 6 years, to customers all over the world. I have not only sold cards, but games, consoles, handhelds, textbooks, books, and other electronic gadgets as well. I only have about 1000 feedback between my 2 accounts, but I'd say for a one-man job that's pretty good. That comes out to about 166 positive feedback per year, so about 1 in 2 days. If I added all the people that don't leave feedback, that figure would probably be about 200 per year.

I have tried various different strategies and considerations in selling, such as trying to figure out if certain days of the week were better for selling. At first I thought, "well more people are home on the weekend so they may be more apt to buy X". Then I thought "well maybe I should have my auctions end at certain times of the day cuz more people will be back from school/work then" or "well I can't have it too late cuz fewer people will be awake", and all kinds of various other scenarios like that. From what I've found, it doesn't really matter when you sell; if someone's interested, they'll Watch it and keep tabs on it or set a max bid. People all around the world are interested in this game, and when one person in place X is sleeping, another person in place Y is not.

Everyone's favorite thing to gripe about when it comes to eBay selling are the fees. Now I admit that they are pretty bad; Final Value Fees are roughly 9% of the selling price, and PayPal fees can range, depending on the final price. We used to see people sell by using low item prices and high shipping prices to bypass having to pay such fees, but eBay caught on to that and now charges on shipping as well. Occassionally you still see people use this method, but shipping charges are 9 cents to the dollar as well, so it really is pointless. What I usually do is just set it to free shipping, that way the buyer can't ding me on the shipping rating.

When my wife tried to sell her paintings in Texas at the Texas Art Center, their final fees were about 30%. I was like "30%!?" but apparently that's fairly common when you try to sell art like that, and other methods of selling can rack up huge fees as well, so eBay's are still rather tame compared to those methods.

One of the fundamental flaws of eBay, and I think this is probably the most crucial one, is seller accountability. What I mean by this, is that eBay requires the seller to basically be 100% accountable for the sold item to arrive to its destination, and also be in the condition as described in the auction. Any idiot could see the problem with this and bring up questions that eBay doesn't have answers to. The answer they provide is basically the equivalent to a shoulder shrug. I will discuss what I feel are the most flawed aspects of selling on eBay:

1.) Delivery Confirmation (DC) has essentially become a requirement.
When you sell an item on eBay, (I'm just gonna stick with cards cuz we're talking Yugz here) if you simply stick the card in a toploader, grab a white letter envelope, fill out the address info, stick a stamp on it and call it good, you give the post office and the buyer 100% control over your transaction. What I mean by this, is that you are hoping that the post office doesn't screw up and fail to deliver, and also hope that the buyer is honest. Hope isn't a good investment. I have read, heard, and been a victim numerous times to when you sell something on eBay, and the buyer claims to never have received it. Virtually in 100% of the cases I have been a part of, eBay sides with the buyer, because as the seller you failed to perform your duty of ensuring the item reached its destination. Eventually I got to the point of saying "OK, any card over $10 I will send with DC." Even this isn't fool-proof.

A few months ago, I sold an Ultra Gottom's Emergency Call for Link to a buyer in Puerto Rico for about $10. As usual I sent with Delivery Confirmation, and 3 weeks later the buyer sends me a message saying he never got the item. I'm like "I know I sent that with confirmation, let me look." I look at the tracking information, and for some reason the only information it had was the in-processing at the post office where I sent it from. I told the buyer since this was a psuedo-international delivery to wait a little while longer. Weeks passed and still the information didn't update to say it arrived in Puerto Rico. Eventually he files an Item Not Received case, and I explain that I sent WITH DC, and there's literally nothing I can do beyond that. I ain't gonna fly to Puerto Rico to hand-deliver the thing to you. As a seller and via the seller protection policy I fulfilled my duty by providing tracking information for the item. Clearly the post office in Puerto Rico either didn't scan in the DC slip to update the info, or it just failed to be delivered. To this day it still hasn't come back to me, so I have very little reason to think that the buyer didn't get it. He probably just took advantage of the fact that the information never updated, and of course eBay sided with the buyer. He got a free GEC out of it as well as his money back. Even though this was a sale for Link, I lost $10 out-of-pocket because I had already given him the money since it sold and got paid for, and it had to come out of my PayPal. This is why I'm rather hesitant on selling cheap-y cards for other people on eBay now; if it's my own item and I lose out that's fine, but having to pay someone what they would've got, and then lose my own money on top of it? That's double dipping and I can't afford that.

That's just one example with a >$10 item. You couldn't believe all the cards I've sent out that were worth roughly $3-7, sent in a stamped envelope, and had the same thing happen to me. It's like come on, you're really gonna rip me for a $5 card? With First-Class Mail+DC costing around $2.50, and bubble envelopes around $0.44 each, plus the cost of toploaders, and gas, it comes out to around $3 to send with DC service. You can clearly see that if you sold a $5 card and used DC to send, as well as having to pay all the fees, you're basically making $0. In some situations you can end up negative, and obviously there's no point in selling if you're losing money doing so; might as well just keep the damn thing!

I have stopped sending internationally altogether. It seems like items sent to Italy, Spain, and Mexico just don't "get there". If you want to track internationally you have to buy the Registered Mail service, which is around $16. On top of that you have to send it in a box, all wrapped with this weird brown paper/tape stuff. It's very tedious, expensive, and just not worth the time.

How to go about fixing this? Well, the first thing that they should do is allow scanned images of sales receipts as a valid form of proof that you sent. If I take my letter envelope, have the postal worker make an electronic stamp and on the receipt it says where the item is going (the zip code), that's substantial proof that I sent the item out. This would save the buyer about $2.50 per transaction. May not sound like a lot but if you send 100 shipments, that's a $250 savings.

2.) You can never really prove the condition of the item you send.
My favorite example of this is when a friend in Texas bought a bent-in-half Archlord Kristya (when they were like $80) from someone for about $20; he said "Watch, in a week this will be in mint condition." Sure enough, what he did was buy a mint condition Kristya from someone on eBay, then claim that he received the bent card. eBay sided with him since the seller couldn't provide proof that he sent a mint one, so he sent back the bent Kristya, got his money back, and voila, he got a mint Kristya for $20. I have had this happen to me as well. What I do now to avoid this (only theoretically though) is I take 2 pieces of cardboard that are the same area as the toploader and tape them together with the toploader'd card between them. It's basically un-bendable and in normal delivery conditions nothing's gonna happen to it. I have yet to have someone file an Item Not as Described case against me after using this packaging method but still, any buyer can claim they received it all beat up, and all I could do is state that I sent in the manner that I did. eBay wouldn't care, because I'd have no proof that the card was mint in the first place; I could always put a bent card in a toploader and stick some cardboard on each side of it. I have heard of people taking pictures/taking video footage of the things they send out, but even then, one could always argue that the video/picture was edited. Take video of a mint card going in, pause, switch with non-mint, and resume recording. Clearly this argument doesn't hold up. The seller is still held by the balls by the honesty of the buyer.

There's really not much that can be done with this one, because there's always the possibility of the seller sending a card that doesn't meet the standards of how it's described in the auction.

3.) The "Star" system
EBay uses a 5 star-rating system for 4 criteria: Item as Described, Seller's Communication, Speed of Delivery, Shipping & Handling Charges. A seller must be at around a 4.8 in all categories before eBay starts to send messages like "you're not meeting performance standards." 4.8 out of 5? That's a 96%. Do you realistically think any store/business around the world has a 96% customer satisfaction rating? The president of the U freakin' S is like half that and does he get flack for it? A little, but it's not like someone's going to be like "sorry, you can't be the president anymore cuz you have a low rating". The problem with this is, that these ratings are completely up to the buyer's discretion and therefore extremely biased. You may feel that you used 5-star worthy service; did all you could and ship out the same day, but the buyer could just say "well they did above average, and 4 is above average, so I'm going to give them all 4's". Having to have a 4.8 minimum, you can quickly see the problem with this. Basically, if you aren't perfect 100% of the time to at least 96% of your buyers, you fail. There is no way for the buyer to give tenths of points, ie they can't give me a 4.2 or 4.9, etc. It's either 4 and less or a 5. It's either fail or pass. Even if the buyer gave you a 5 for two of your stars and 4 for the others, well you're gonna fall below that 4.8 minimum if a few more people do that. This is why I usually send free shipping now, or $1. Realistically they aren't gonna give me anything below a 5 in that category. The problem with the Speed of Delivery rating, is that even if you send out the same day, if you used First-Class Mail, it may take a week for the item to arrive anyway. These days it seems like buyers expect to receive their crap as quick as they receive e-mail and text messages. I've had someone try to open an Item Not Received case 3 days after he purchased the item. 3 freakin' days!! I clearly post on my auctions that I will send out within 2 business days. When I got his message asking where the item was, I was completely dumbfounded; I explained that I literally just sent it yesterday, so unless you were in the same general geographic area as me, it ain't gettin' to you in 24 hours!

Also, there are limits to how many Item Not as Described and Item Not Received cases you can have filed against you. I believe it is 3 in both scenarios. With people eager for the opportunity to file these claims and essentially make money, everything is basically stacked against the seller. It is a free-haven for rippers and buyers. Personally I have a 4.9 in all categories except the Speed of Delivery; in that I have a 4.8, but because I've had 3 people file Item Not as Described/Item Not Received cases, I continuously get messages from eBay saying my performance standards are too low and I could be susceptible to having restrictions on my account. That is just absolutely asinine.

Solutions: The star system needs to be completely re-vamped. The first thing is to allow sellers to give fractions of a star. Don't expect me to have a 4.8, and only allow the buyer to give me either a 4 or lower, or a 5.
In the Item as Described category, I feel that if the seller is going to give you positive feedback in the first place, then they are content that the item is as described. This should be an automatic 5 stars.

In the Seller's Communication category, I think if the seller sends a message to the buyer indicating when their item was shipped/when they could expect it, or anything of that nature, and if they respond to all messages within 72 hours of getting one, then it should be an automatic 5 stars. By automatic, I mean that the eBay system would not allow the user to put in their own rating, similar to how it works if you use free shipping. In that case the user can't put anything in.

In the Speed of Delivery category, if the seller receives the item within 14 days of their purchase, should be an auto 5 stars. This allows enough wiggle room to account for seller standards (ie how lazy they are to get to the PO) and the postal service's ability to mail shit out.

Shipping and Handling Charges should be an auto 5-stars if the cost doesn't exceed the amount that eBay sets as a standard. By looking at the category of the item, the system should know roughly how much it'll cost to ship among each of the mail carriers. If the seller doesn't charge beyond that, that should be an auto 5-stars.

Without these kinds of standards in place, eBay is continuously becoming a more volatile place to sell. Coupled with the bad economy, more people are trying to get something for nothing. Because of the things I talked about above, I try to refrain from selling on eBay if at all possible. On certain items, sure, I don't have much of a choice, and I'm fine with that. So how do I sell if not on eBay? Well truth be told I have been selling to Troll & Toad as of late. To date I personally have sold them about $500-600 worth in cards for myself, actually just received another $150 yesterday, and have about $200 worth of stuff I'm planning on selling next. Also the $300 I got for Danny's Tour Guides. The benefit of this is that they do give decent values for certain cards. You have to be picky and choosey a little, but you'll be surprised as to what they buy. A while ago they were buying Night's End Sorcerers for $4.50. White Knight Dragon for $14. Do you know anyone at your locals who will pay that much for those? Highly unlikely. Their buy price on Trishula is only like $18, so obviously you don't sell that to them. Again, simply look through their list and look at your stuff, and see what you're willing to get rid of at their current price. Another thing I like with Troll&Toad is that they give an additional 10% if you sell to them for store credit. This is great if you are in to buying singles, and I feel that Troll is one of the better sites for decent single prices. Sure, some stuff is way above what it should be, but for the most part they're good. Unfortunately their shipping for anything other than singles is pretty high, so it's just not worth it if you're wanting to buy sleeves or a box or something like that from them.

Another site I came across that actually offers better than Troll is Alter Reality Games. Their buy list section used to be pretty bad in terms of functionality. I don't even think it was running, which is why I looked to Troll. Now, it's at least up. Their search function doesn't work at all; with Troll you just get a big fat list and look through that way, and on ARG you have to click on the set and look through that way. From what I've seen it goes like this: Alter Reality gives better prices for in-demand/hot cards, while Troll will give you more for obscure cards that are hard to get rid of in-person. My next sale will actually be to both ARG and Troll. I will be getting the best of both worlds. This may not always be the best case scenario though since you have to take into consideration that you're sending two shipments rather than one and each PayPal transaction is gonna cost you a little in fees, but I've calculated it out and it is worth it for what I'm wanting to sell. This is a much better system than selling on eBay because you have the ability to mail out far fewer times than you would on eBay. The shipping with DC costs are what racks up the cost to you, and by this you are reducing that by a lot. Troll usually takes 5-7 days to get your money to you (PayPal, haven't tried anything else), and on ARG's site it says they will get the money to you usually on the day they receive your cards. We will see.

Recently I have been trading for cards that yield good values on Troll, but may not be apparent to the general population because they're rather unplayable. Even if you're getting "random crap", you will end up on the positive by doing these trades because you can always sell to these sites.

This being said, I still believe that the best way to sell currently is in-person at your locals/regionals/whatever. This way you don't have to pay any fees, no shipping, no having to package the item up, writing out the address, and all that crap. It's completely worth it to sell a little lower than eBay values to ensure your sale and your money. I know our locals are rather poor in our area, and I'm sure in other places across the U.S. as well, but if you CAN sell in-person at a reasonable price to someone, do it. It's better to sell that $15 item for $11 in-person than to sell it for $15 on eBay. Trust me! I sold Link's Tour Guide a little while ago for $110; what was the amount that I had to give him? $88. This was when Troll was buying them at $65 so I didn't have that option for him, and I didn't want to buy it, so that was all I could do. Would there be anyone that would've bought it for an even $100 in our area? Probably not - very few have that kind of money to throw around.

To conclude this long-ass post, I'd just like to say to anyone that's considering selling on eBay, you really should look elsewhere. To make money in this game (at least by buying and selling cards), you can't always rely on conventional methods. You also can't take a passive approach to it as well; values are always changing, usually on the downward side of things. Don't be stagnant with particular cards. It should be a near-constant flux of incoming and outgoing cards. Buy and sell, trade and sell, buy some more. When you hold on to the random secret rares you picked up at the Sneak, it eventually gets to the point of not being able to get rid of them at all, or for dirt low prices. You don't have to get rid of everything though, look at Tour Guide from where it started to where it is today. Making these predictions is extremely difficult; sometimes you win, sometimes you lose out. Not everyone wins all the time - it's just near impossible in this game. Try to win more often than you lose - that's about all you can do!

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