Friday, June 29, 2007

SS2BM Means Ebay Sucks

For some reason I began investigating eBay an hour or so ago after reading a comment . What I've found is a fascinating example of monopolistic business behavior (with its usual despotic psychological overtones). I've been hearing about the borderling illegal tactics of eBay through Paypal (eBay's subsidiary - www.paypalsucks.com) for years now - suspending people's accounts and refusing to let them transfer money. People who tried to resell PS3s or Xbox 360s ran into this problem. Why eBay cracks down on people like this is somewhat puzzling, but it will drive their sellers (and eventually their customers) away. When unhappy eBayers protest eBay fee increases and attempt to point people to better alternatives they are silenced. A community has grown up around eBay alternatives at the Pheebay forum.

The good news is that there are alternatives. eCrater is completely free, so avoid the fees and head on over there when you're looking to bid for something! Why should a customer avoid fees? Economists have been telling people forever that fees are ultimately passed on to the consumers, and there is no better example of this than online auction sites. eCrater will certainly be cheaper than eBay. Let's hope eBay doesn't buy their competitors just as they are starting to take off - though I'm sure eBay will try. The big new thing is for companies to buy competitors and shut them down, which is what eBay did with Paypal competitors.

eBay is currently facing a class action antitrust lawsuit. Paypal settled one class-action lawsuit in 2004 and lost another one more recently.

eBay has a network monopoly. In the days of the internet these monopolies are ubiquitous. Myspace/Facebook, Digg, Microsoft, and even these Wiki sites are protected by network monopolies.

As some economists forget, the goal is always social good - and when market failure happens, social good isn't maximized. That justifies intervention in the market. On the other hand, should the government legislate that eBay stop it's oppressive tactics? At this point, I think not. Instead, let them keep angering their customers - that gives people the incentive to seek a newer, better alternative - in this case, eCrater: a completely free auction site.

2 comments:

robert said...

Hi, If your looking for an alternative to ebay, ItchyPig limited run its own auction site www.itchypig.co.uk. Im a co-director, we have just been backed by Northampton university. Theres no final value fees and no listing fees. we make all our money from selling advertising space on the site. And check out our charities page. You will see that just by using the site you are helping charities. We actually pay our users, if you have a myspace,facebook,bebo or even your own website, we will actually pay you just to have our link on your site (£1 for every verified sign up that comes from your unique link) If you want to know more then just email me on frank@itchypig.co.uk or check out the website www.itchypig.co.uk. Oh and to add to the ebay sux theme here, they also own www.shopping.com they pay other websites to promote affiliat's products then pay the promoters 1p-10p per sale when they receive £6-£500 per sale. They are all about the money, they have changed sooo much since they started up. you should read their book "the perfect store". more like "a quick and easy way to make a load of money, with no customer care". Cheers for reading. Frank.

Melody said...

Another great eBay alternative is http://www.usauctionslive.com. There are NO insertion fees and the end of auction fees are less than half the price of eBay.