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eBay arbitrage traders threatened with consequences

By Chris Dawson August 13, 2019 - 10:49 am

eBay have started emailing suspected eBay arbitrage traders telling them that they’ll lost Top Rated Status and possibly face other sanctions until their account is in compliance with the policy.

eBay hate arbitrage traders asserting that they add nothing to the marketplace. They don’t mind legitimate dropshippers who have an agreement with the supplier, but they detest eBay arbitrage traders who when they get a sale to off to another retailer (often Amazon) to get the product shipped.

The reason eBay hate eBay arbitrage traders is that the package arrives in competitor’s branded boxes, consumers get no warranty as the eBay arbitrage traders simply disappear and are often not even in the country. HMRC should also hate eBay arbitrage traders selling in the UK as they pay no VAT or other taxes often not even being located within the EU let alone the UK.

Sellers who are unwitting used as arbitrage suppliers also detest eBay arbitrage traders. They are left with account violations whenever something goes wrong – which often is the eBay arbitrage traders simply buying the wrong item with automated software.

Whether you love or hate the practice, eBay don’t and are sending the following email.

“We’ve determined that you haven’t followed our selling practices policy therefore, we will be removing your Top Rated Seller status until your account is in compliance with the policy.

There is evidence on your account that you are purchasing items from an online retail or marketplace site after you sell the item on eBay and having that retailer ship the item directly to the customer. This is a violation of the terms and conditions section of our Selling practices policy, which states:

·Items you list must be in your inventory or you must have an existing agreement with a third party to fulfill the delivery of the item under the terms of your listing.

For more information on this policy, please go to:
https://www.ebay.com/help/policies/selling-policies/selling-practices-policy?id=4346

Regards,

The eBay team”

What’s mildly amusing is that some sellers are reporting on Facebook that eBay have sent the email to a whole load of eBay Top Rated Sellers who aren’t abusing the policy. If this is the case then a simply call to eBay customer support should reassure you that your account is not in danger.

Even if the mail has been sent by mistake to some sellers, sooner or later it will get to the eBay arbitrage traders it’s intended for so now it’s a waiting game to see if their exposure on eBay is further reduced or their account suspended.

  • 7 days ago

    Interesting! Good that ebay are taking a stand, at the end of the day it is ebays platform and it is their policy so it is great to see them enforcing it!

    Over the years there is 2 sides to this type of trading on the seller forums:

    AGAINST:

    It devalues the brand and leads to bad experience (and all your points above in the article).

    FOR:

    A sale is a sale and does it matter if a 3rd party is buying your item and then getting you to ship to a different address? At the end of the day you are getting the sale at the price you have advertised at.

    In the past I have ordered from an ebay seller and I have received an Amazon delivery and it did confuse me as I shop on Amazon also so assumed I had got my purchases mixed up, but alas it actually was an ebay purchase fulfilled by Amazon. It was a UK seller also with huge feedback. At the time I was confused but didn’t really mind as at the end of the day I got the item I ordered.

  • 7 days ago

    1/ Buyers also feel cheated when receiving an Amazon delivery with a ‘gift’ receipt) from an order they placed on eBay (as this buyer expressed disappointment yesterday a proper ‘report item’ selection option wasn’t available in eBay’s reason drop-down:
    (👉 http://bit.ly/2YXGcUx)

    2/ Earlier this month many arbitrage dropshippers reported their accounts were unflagged by eBay:
    (👉 http://bit.ly/30b40kY)

    We chatted with a merchant/analyst about this yesterday, and suggested if eBay didn’t suck in all matters of execution and had their **** together, we’d have surmised it was a ‘honeypot’ style setup in order to validate and confirm arbitrage dropshipping abusers.

    Based on TameBay’s reporting “eBay have sent the email to a whole load of eBay Top Rated Sellers who aren’t abusing the policy” it seems safe to say this wasn’t a honeypot operation and simply another massive eBay misexecution fustercluck.

    3/ “simply call to eBay customer support should reassure you that your account is not in danger.”

    Many eBay buyers and sellers were reporting massive hold-time with eBay customer support yesterday (likely exacerbated by this very issue) with reports of 2-4 hour hold times:
    (👉 http://bit.ly/2YYwscx)

    If you were impacted, pinging @askeBay on Twitter is another option for UK and US merchants (and also provides some additional visibility to the matter)

  • Mac
    7 days ago

    Less competition. What do we have to complain about with eBay’s policy this time?

    While I’m sure there will be some of us who have very occasionally been forced to order from someone else to provide what was ordered because we cannot find the item…. that would be uncommon or rare. 🙂

  • 7 days ago

    @Chris Dawson This is a joke? Although it is not April Fools day for a while, maybe you are a little late? Do you really believe what you write?

    It even links to the last lot of rubbish you wrote on the subject “eBay hate arbitrage traders”.

    Once again eBay are doing nothing about those sellers except taking away their Top Rated Seller status. How does that effect them? They pay more in fees.

    If they were serious they would take them off the site, ban them, but no, they just choose to make money from them and let them continue selling.

    Arbitrage sellers spend a small fortune on promoting their expensive goods with sponsored listings, they do not need to be TRS their over priced products are always ranked at the top.

    As I pointed out 7 months ago barracauk are still operating

    They get over a 1,000 feed back a month indicating they make 3,000+ sales a month

    Even one of their feedback states:

    “received package which had an invoice for £8.95 from amazon got charged £16.45”

    eBay make money from them, why should they care, much the same as OnBuy still have Swift Deals ripping off their customers, a £28.00 product being sold for £45.00.

    Good luck to them but please lets NOT pretend that eBay care or are actually doing something about it, or they would not still be on there. Try and write it how it is, eBay increasing their revenue from sellers.

  • 7 days ago

    If they were serious they would take them off the site, ban them, but no, they just choose to make money from them and let them continue selling.

    >> Great comment, can’t argue with that. Yes, surely they would issue a warning and then repeat offence = blocked selling account.

    Arbitrage sellers spend a small fortune on promoting their expensive goods with sponsored listings, they do not need to be TRS their over priced products are always ranked at the top.

    >> Yes, another valid point.

  • 7 days ago

    “Once again eBay are doing nothing about those [dropship-arbitrage] sellers except taking away their Top Rated Seller status. How does that effect them? They pay more in fees.

    If they were serious they would take them off the site, ban them, but no, they just choose to make money from them and let them continue selling off the site”
    ================

    Tyler, you’ve identified eBay’s conundrum: eBay can ill-afford to outright forfeit revenue and GMV from dropship-arbitrage sellers. At the same time, eBay wants to convey the position DA is prohibited (and communicate to stocking merchants ‘we’re doing something about it”).

    So what to do?

    Apparently for the moment it’s simply suppressing search results in order to allow for the occasional occurrence that the DA seller actually fills a void, while maintaining the formal position DA disallowed (interestingly we could find no mention of ‘arbitrage’ in any of the shipping or item location policies).

    If eBay wanted to lend integrity to their frequent “trust and transparency are critical to the eBay experience” sound-bite, eBay would make the following changes (and undo the intentional obscuring of handling time) to allow buyers to search/filter by:

    a. Stocking Merchant
    b. Authorized Drop-Shipper
    c. Arbitrage Drop-Shipper

    • 6 days ago

      “eBay’s conundrum: eBay can ill-afford to outright forfeit revenue and GMV from dropship-arbitrage sellers.”

      I disagree, sure there is much revenue to be made from them, but most items are available from other sellers cheaper. This would mean lower fees, but would not mean “no-fees”.

      The real conundrum eBay have is that each time an Arbitrage seller sends an order via Amazon, there is a chance that Amazon will unwittingly steal that customer.

      I once posted on here how my sales had dropped off from eBay and increased on Amazon, when I checked I found that many of my eBay customers had since brought through Amazon..

  • 6 days ago

    Tyler, based on results, eBay *perceives* it to be the case that they cannot outright ban these arbitrage dropshippers right now.

    eBay wants *more* inventory on the site (as well as more fee-generating activities, of course).

    There is practically zero incremental cost for eBay to host these listings, but eBay is presumably weighing the revenue vs. opportunity costs of angry sellers, Amazon poaching their customer, and a host of other customer experience related issues which were pointed out in the linked TB articles above (definitely worth clicking through and re-reading).

    If it were that cut-and-dry a decision for eBay, don’t you think they’d have already made it? eBay is going to make the decision based on what eBay believes will make the overall best income contribution.
    ==========

    (small detour from arbitrage dropshippers, but germane to eBay’s desperation to deliver ‘less awful compared to peers’ revenue & GMV growth figures to Wall St.)

    Last quarter eBay squeaked by with a revenue beat of just ~$10M USD

    One of the ways eBay achieved this was by running a 10% sitewide flash sale in the UK the last business day of June 28 (and of course end of Q2)

    eBay advertised this flash sale as “Expires 28/06/19 23:59 BST. _*T&Cs apply_”

    Do you know what eBay did?

    eBay terminated the sale at ~2pm BST – 8 HOURS EARLIER THAN ADVERTISED (though eBay adjusted the T&C to give themselves permission).

    Naturally this pissed a lot of buyers off, but presumably eBay evaluated this opportunity cost and did it anyway.

    👉 http://bit.ly/3044lGq

    Apparently this flash-sale boost was enough to assure eBay confidence in a revenue beat with just the weekend remaining.

  • Brice
    6 days ago

    What everybody is NOT saying is that many of these Arbitrage sellers are in China and decieve the buyer by making out they are uk sellers or the stock is in the Uk. They also get hugley preferential postal rates.
    Does ebay care?
    No. Try reporting these sellers for misrepresenting stock location and nothing happens

    • 6 days ago

      @ Brice Arbitrage sellers do not need cheap postal rates, they already get FREE postage and they don’t have any stock, maybe you are not sure how it works.

      Let me explain.

      I find a seller on Amazon that is using prime
      I sign up to prime and select some products that I think will sell well.
      I choose and item that they sell for £20
      I then work out how much I need to sell it on eBay to:

      1. Cover the cost of buying it for £20
      2. Cover eBay / Paypal fees
      3. Cover the cost of paying for a sponsored listing
      4. Make a profit

      The above if they are VAT registered would probably mean multiplying the Amazon cost by 1.7, so this item would be sold for £34.00

      When you buy the item from me, I take your name and address and place the order with the buyer on Amazon. Next day your item arrives from the Amazon buyer direct to your door and I make a profit of £1.52 Multiply that by 3,000 orders a month and I am doing ok.

      This may seem like a lot of work, bu they use a script to automate it, all very clever stuff.

  • jim
    6 days ago

    lots of chinese sellers are simply doing the same as many uk sellers ,
    selling into foreign markets and exporting,perfectly legitimately
    its those that take 6 weeks or more to deliver whilst camouflaging their location that cause the problem

  • Steve
    6 days ago

    I love the fact eBay do take some actions. Were Amazon do not care at all about sellers. It’s time the government stepped in to enforce laws to protect UK sellers more in the UK online marketplace. As it’s reaching the point where all UK sellers are barely making a profit these days but still have to pay all the tax, fees, vat etc.

    • 6 days ago

      @Steve I think maybe you have missed the point.

      eBay are not doing anything about the arbitrage sellers, they are simply allowing them to continue but charging them more to do it.

      Why should Amazon care, from each sale they make money. It is eBay customers being ripped off.

  • Tim
    6 days ago

    I wonder whether under the new GDPR legislation is legal to send personal information (order details) to a third party (genuine seller of the product) without consent!

  • Toby
    6 days ago

    Sadly this is justa quick tap on the wrist from ebay as usual. So they lose top rated? Who cares? I see masses of sellers with low 90’s % feedback stiull selling loads as they are cheap. Most ebay buyers are looking for lowest price. After all they don’t need to worry about anything else as ebay practically force feeds them the fact they are covered is something goes wrong. You don’t need to answer questions, offer good service or sort out issues if you are cheap enough. Ebay is the start and finish of the race to the bottom. That is how these sellers and the chinese thrive.
    Putting this aside the search engine has never fully worked and sponsored listing make a mockery of any of the search functions anyway.
    So this is simply a case of window dressing for ebay. They hate these sellers, but like their money. If ebay really cared about the buyer experience they would clamp down on all sorts of bad sellers… but they don’t, they just make bold statements and wait for people to lap it up. Let’s face it, if you go to report someones listing for one of the many buig bug bare issues… where is the option? There rarely is, the carefully selected options mean you can’t truely state why it is wrong and so the bots skip over it.
    Ebay has been so negligent for so long that if it axed all the dodgy sellers, it would massively cut down on it’s income as many of the good ones have moved on. Like I have said before, ina few years ebay will be chinese sellers, mega discounters with zero customer service, business sellers listing as private sellers and of course the arbitrage sellers who have no idea what they are selling and don’t really care.
    Welcome to ebay…atleats it is cheap….ish

    • Toby
      6 days ago

      must check for typos before hitting send… forget there is no edit function!

  • Ryan Mcginnis
    6 days ago

    Arbitrage in general or drop shipping? Your article is confusing. Most of Ebay is Retail Arbitrage, so that would be stupid.

    • 5 days ago

      Ryan, it’s in reference to “dropship arbitrage”.

      “ARBITRAGE”: Outside the last 5 years or so “arbitrage” generally referred to the (practically) SIMULTANEOUS buying and selling of securities (or currency) in different markets.

      “RETAIL ARBITRAGE”: In ecommerce “retail arbitrage” typically has come to refer to buyers (or “flippers”) purchasing item lots from retailers and listing for resale on marketplaces like eBay.

      “DROPSHIP ARBITRAGE”: In ecom usually refers to the use of SaaS tools which allow customers AFTER receiving an order on a marketplace like eBay, to (nearly) SIMULTANEOUSLY place an order on another retailer or marketplace (like Amazon). This can also be done manually of course, but automated tools allow for hands-off management (and most the SaaS tools provide other features, like scraping listings and creating them on eBay).

      It’s this last type of dropship arbitrage that TB refers to as a “at best a dodgy business”, results in numerous upset buyers and complaints to eBay, and also provides Amazon additional exposure to these buyer-consumers when they receive the order in an Amazon box with a gift receipt.

      IMPORTANT – Arbitrage dropshippers attempt to place the order from the retailer AFTER receiving the original order from the eBay buyer. Using a typical eBay-Amazon arbitrage dropship setup, the simplified order flow goes something like this:

      1/ eBay buyer places widget order from ABC Arbitrage Dropshipper store on eBay (buyer has paid for the order)
      2/ ABC Dropshipper’s software then attempts to order this item from Amazon to ship to eBay buyer as the ship-to address

      Unfortunately, for high-velocity items even *if* the Amazon re-order is attempted within a few seconds of the eBay order, the item could be OOS, and if so, often arbitrage dropshippers falsify the cancellation reason as “buyer requested” in order to avoid damage to service metrics.

    • 5 days ago

      As unsuckebay but with some extra things to think about.

      Amazon Arbitrage drop shipping is bad for eBay customers as they tend to pay 1.6+ x more for items to take into account fees payable after paying the Amazon seller.

      There is a question of how good or bad it is for eBay, businesses, like my example above barracauk have a rating of 99.4% and a feedback score of 40,564.

      They are some of the best sellers that eBay have as they use Amazon Prime to deliver their over priced items. And as the items are overpriced they earn more in Final value fees as well as Promote your listings fees to help buyers get ripped off.

      So just to play “Devil’s Advocate”, why should eBay care?

      In the last 12 months they have had 136 neutral / Negative buyers which equals just 1% of their sales, taking into account that only 1/3 or less of the buyers who are happy leave feedback that takes it down to 0.333%

      Those that have left positive feedback are delighted with being ripped off, so that is nearly 40,000 happy customers v 136 unhappy ones in the last year. Multiply that by all the other drop shippers and eBay have many thousands of happy customers thanks to them.

      And now they will continue to allow them to use the site but make more money from them.

      KerChing….

  • 5 days ago

    Tyler 👍

    ~~~~~~~`

    I failed to clarify and reiterate “dropshipping or drop-shipping” (WITHOUT the ‘arbitrage’ designation tied to it) from a mfr. or distributor when the selling merchant has a business agreement or contract with the supplier is a perfectly legitimate (and extremely common) form of commerce/ecommerce.

  • Dav
    5 days ago

    The fact that they’re sending warnings to sellers that don’t drop-ship at all shows what a mess eBay is. This company always seem to be in constant chaos. Errors like this happen daily. And they call themselves a tech company? But as others have said, eBay doesn’t care about their errors because it always favors them. Makes you think that they’re not really errors doesn’t it? Their “glitches” are random and on purpose to see what they can get away with.

    It’s also a fact that once everyone is forced into Managed Payments that you’ll be paying MORE than what PayPal fees are. Guaranteed eBay will jack up the fees. They’ll keep saying it’s a great deal until it’s not. eBay lies. Some will already be paying more because of eBay’s per listing fees. Everything eBay does is a con job to bring you into their game. More money for them, less for you. That’s what happens when a company’s growth and sales are in decline. Desperation.

  • Dav
    5 days ago

    Another fact I didn’t mention: eBay technically is a drop-shipper! They “sell” items but own nothing and ship nothing themselves. All they do is skim fees from other’s products and labor. But eBay loves telling Wall Street and shareholders how much “inventory” they have on the site and how it’s increasing. Yes that’s a fact. Just a small part of their endless smokescreens. Hyprocrites? eBay? Surely.

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