Monday, 21 April 2008

Greed

On numerous occasion this blog has discussed the merits of selling stuff on eBay: a great tool to help you get rid of stuff you don't need and regain some space while putting some money in your pocket, which is also good from an environmentalist's point of view in the recycling sense.
The way of this world is that trends flow in a rather cyclical manner, and things that are good eventually become bad and vice versa. This time around it is eBay's turn to become the villain: in a rather unashamed case of greed, eBay Australia has recently announced that as of the end of May 2008 all items sold on eBay must offer PayPal as a payment option. Shortly afterwards PayPal is to become the only means of payment to be used on eBay other than the rare case of cash payment during pickup.
That's bad. That's very bad. Let me give you a brief account for why it is bad from my point of view as a small time seller.

PayPal charges a commission of around a dollar plus one or two percent commission. It doesn't sound like much, but when you add it to the cost of publishing an item on eBay and the commission eBay takes out of the final selling price it means your profit as a seller are greatly eroded.
Things are obviously much worse when selling a small time item, the way I often do through my aspiration to find my previously beloved stuff a loving home. Let's say I'm selling a $5 laserdisc: The cost of publishing it on eBay without a gallery photo would be $0.50 (with a gallery it's $1.1). Then you get the eBay commission of around 5% and then you get the PayPal commission, meaning that less than $3.5 actually finds itself in your pocket - an erosion of some 35%. At that point you may as well feel like an idiot, because no matter how much you want to recycle and help your stuff find a loving home, you definitely don't like being a fool.
That's not all. Many potential buyers don't like to pay using PayPal; the process you need to go through in order to register your credit card on PayPal is rather tedious and often intimidating to those who don't want to put their financial info over the web. Makes sense to me: after all, PayPal gives direct access to your wallet to any would be hacker, and it's only protected by a password.
Then there are the eBay beginners or those that rarely shop on eBay. Say, a would be mother looking for cheap maternity clothes of the type I'm selling at the moment and who heard from a friend that eBay is a good source for bargain maternity clothes. Why should this would be mother bother creating a PayPal account and wait through the couple of weeks it takes to confirm it before she can put her hands on the maternity clothes?
Wait. There's more! Once you sell your item on eBay and you get paid via PayPal, it's not like the money is in your pocket. If you want it in your bank account you must accumulate over $150, not that trivial an amount to a small time seller like me; otherwise, your only way of "feeling" that money is spending it, which is what we usually do when we do get paid with PayPal - we buy Skype credit and use it to call our backwards family and friends who can't be bothered to install Skype and talk to us for free. As beautiful as this may sound, I do prefer to have my money in my wallet, thank you very much; I can clearly see, however, how much money eBay can make out of interest alone through sellers who are not in a position to withdraw their earnings out of PayPal.

The funny thing about this entire recent eBay escapade is that it's entirely illegal - and eBay knows it. The law prohibits exclusive dealing which broadly involves one trader imposing restrictions on another’s freedom to choose with whom, in what or where it deals. That is why eBay had its lovely lawyers, heavenly souls the lot of them, write to the ACCC (Australian Competition & Consumer Commission) to ask for exemption on the grounds that using PayPal is safer.
Well, that's bullshit for you.
Sure, PayPal is probably relatively safe and it is definitely comfortable; you know for sure when you get paid, as opposed to a bank transfer which can take days and is more susceptible to errors. But then again, so what? I have sold about 150 items on eBay by now, most using bank transfer, and so far I did not have any transactions going wrong. It took patience, but I'm alive.
Then there's the issue of eBay forgetting that PayPal is not the only service provider out there; it's just the only one that's owned by eBay. In Australia alone you can get the services of Paymate, which used to be the payment method recommended by eBay until they went and bought PayPal. Since then eBay seems to have suffered amnesia with anything concerning Paymate.

Hope is not lost yet. The ACCC has announced it would look into things, starting soon by letting the public submit their claims as to why eBay is wrong. I will be there with something similar to this post; I consider it my duty to do what I can do for the things I believe in. Especially when they directly concern my back pocket, but also when this is a moment in time when the entire world is watching Australia to see how successful eBay is in its evil plot - success here means demise would follow elsewhere.
I do have to say this in conclusion. eBay is a company making some gigantic loads of money in profit and rolling over more than most countries' budgets. Obviously someone very calculated sat back on eBay headquarters and figured that this new initiative of theirs would earn more money than it would lose so the big bosses gave them the green light. I am wondering, though: why is it that eBay needs to make more money in the first place? What is this obsession we have with expansion for the sake of expansion? Why do we have to be so greedy?
What happened to just doing to right thing?

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