Hi, It’s a bit embarassing to ask this thing. I know what is eBay and that’s all. Please tell me how does it work? I heard a lot about scams in eBay. How can I avoid them? Thank you so much.
If you’ve been involved with the Internet for any length of time, I think it’s inevitable that you’ve bumped into either eBay (Nasdaq:EBAY) or one of its huge subsidiaries, Paypal or Skype. I know I use all three of these with alarming regularity!
In terms of how eBay actually works, though, that’s an interesting question, because in many ways, eBay represents a perfect implementation of what we could call Economy 2.0: it’s a business that makes money by being an intermediary. They have no warehouses, no stock, no shipping department, no salespeople and no retail storefronts. Yet for all that, they make billions of dollars in profit. With competitors like that, why bother with retail, temporary staff, the hassles of shipping and all the rest of the burden of a traditional business?
Apocryphally, when Pierre Omidyar founded eBay (originally called AuctionWeb), he created it to allow his girlfriend to buy and sell Pez dispensers with other collectors. In fact, the first thing sold on eBay was Pierre’s broken laser pointer, which — amazingly — someone bought for $14! I won’t belabor the company history as there are many excellent sources for that, including an authoritative Wikipedia entry and literally hundreds of books.
In many ways, eBay offered up a completely frictionless marketplace where sellers gained the benefit of far greater visibility for their goods than they could obtain through other outlets (e.g., flea markets, garage sales) and buyers gained access to a far wider range of goods than possible in a physical setting. If each party had to pay a small transaction fee on a consummated transaction, the price was easily absorbed when compared with the benefits. What I believe really made eBay a harbinger of things to come in the online commerce world (remember, eBay was started up in 1995) was the rating system, which allowed the community to police itself, promote and recognize great buyers and sellers, and grow without being trapped in the vacuum of anonymity that’s one of the banes of the Internet.
However, as with all things, scammers have figured out how to game eBay and while the percentage of transactions that are fraudulent are surprisingly low, it’s not hard to find someone who has been ripped off, almost always from a fraudulent seller. How can this be, in a world of ratings and user feedback? It’s not hard, especially if you create a shilling circle or other group of people who collectively intend to scam others.
It can work like this: five of my best pals and I all create eBay accounts and then auction off ridiculously cheap items like pencils or gum wrappers. Each transaction costs perhaps $0.25 in fees and if we’re all bidding on each other’s auctions, each complete the transaction, and each give the other positive feedback as a buyer/seller, it won’t take long to establish a good community rating and seem legit. 20-30 low-cost items, less than $1/transaction in fees, and now you can move into selling $2500 plasma TVs or high-end laptops without appearing like someone who just started on eBay. Meanwhile, though, your intent is to take the payment but not ship the goods. If you run a half-dozen auctions simultaneously, you could pocket a quick $10,000 or more through this strategy, even though it’s clearly illegal.
The best way I have found to avoid scams is to #1 not buy from anyone with less than a few hundred feedback votes, at least 95% positive (things happen, I don’t expect 100% clean feedback), and to avoid anything with a strange payment scheme. Wiring a money order, sending a check to a Post Office Box, or similar are all warning signs. Instead, use an escrow service and if you use Paypal, opt for the insurance they offer.
Hopefully that answers your question and offers some basic tips on how to avoid being ripped off. Good luck to you, and perhaps other eBay enthusiasts will add their own best practices in terms of avoiding being ripped off, which none of us want.
Hi Dave
I am staying in South Africa. I would like you to give me advice. Another South African moved to England and want to sell a caravan that is still in South Africa. He said that the transaction must be done through E Bay, he is a verified supplier. I am scared about the transaction but did not want to miss the opportunity because it is a big bargain. How do you suggest I do it.
Thanks
Find a lawyer or barrister who can assist in the transaction, and make sure they have legal ownership of the caravan before you pay anything.
Hello
I would like to know how will it be possible to buy a car in Mpumalanga but the seller says he is in UK at the moment he is going to sell it though eBay.
How safe is this system, pardon me it is the first time I will be using it.
how sure will I be that the seller is the really owner as i’m in Durban and I really want to buy it.
Thanks
Charlotte
While I do agree to take care in who you buy from, NOT everyone is out to scam people I am selling my Iphone and I have never sold on ebay, I am NOT a scammer so your advice actually hurts someone who has a real item for sale, so your advice is not that great bud
Sue, I tackled your question here:
http://www.intuitive.com/blog/contracts_after_the_company_goes_under.html
Hi Dave,
I’m hoping you can help me. I paid money to a company called, “The AuctionEmploymentTraining
Institute” so that I could take the training, then become an Ebay auction listing agent. Half way through my training, this company went under.
(I think this because they haven’t answered their phone calls for months. First they said it was a temporary inconvenience, now they just don’t answer.) Employment with Ebay was guaranteed. Is there any way I can follow through with this to get this job? I realize this may not be your area of expertise, but any suggestions would be welcomed) I’ve tried looking this up on the Ebay sight, and there is nothing.
i m a graphic designer.and i have heard a lot about ebay. and i have ebay account bt i dnt know how to work in it.how can i work for the clients through ebay online???????????? plz help me out
I live in New Zealand. I want to list an item to sell on Ebay.com. I assume that the currency used on the auction is US dollars ? Also do I need to listr separately on Ebay.US and Ebay.UK or is the listing linked ? Thanks heaps, Malcolm.
paypal holds the payment until either the buyer posts a posstive feedback or something like 25 days past buy so if someone scams you alert ebay and your money will be refunded
Sally, sounds like a sam. You want to use a credible service like escrow.com to complete the transaction. Check this out too:
http://moneycentral.msn.com/content/savinganddebt/saveonacar/p92243.asp
Hi! I am in the midst of buying a vehicle through another web page, and the buyer has said that they will be setting up an ebay account in which i put money into and then when i receive the vehicle and agree to take it then ebay sends him the money. My question is, is this sort of account real or am i being scammed?
My name is D.C.,live in Las Vegas and I’m not good in computer or even understand it.I have one item that I would like to sell on eBay,but don;t no how to even get started,or how it would work,and how I beenafit from it
Hi Dave
well Im trying to buy a motorcycle from craigslist and this guy wants to use ebay payment method. I don’t know how this work and I don’t want to lose my money. First he is in portugal but the bike is in taxes. he wants me to send the money to the agent in portugal. then he will process the delivery. I don’t know if thats safe because I don’t know he agent and the agent is also in portugal. is this how the ebay work??
[im in thesame boat. Shes selling a motorcycle says her payment method is through e bay she will deliver the bike i can check it out for 5 days if i dont like it ebay will return my money. I called ebay they couldnt find the name she used or an email in the mail she is corosponding with me. Dud you find anything out?
I want to start an ebay or other online jewelry business. How is the best way to get started? Do I need my own web page to link? What other information should I consider. I’m very new at this whole process. Thanks for your help.
I’ve come to the conclusion that several large-volume sellers make extra money by sending about 99% of their products and ignoring the rest, leaving them with 99% ratings or slightly lower. Some of them have prices way too low to be making money, and this is how they make it back. I’ve stopped ordering from people with lower than 100% if they’re high-volume sellers.
That is great advice Dave but I am wondering more about the online commerce things like PayPal and so on. Are there more things you as a consumer do to protect your self other than buying the insurance?
Hi Gary. I don’t know much about your Auction Mapper service, but yes, if I were using a third-party auction search system, I would definitely like to screen out those sellers with a rating of less than 10, for example.
Great advice, Dave.
You mentioned not buying from anyone with less than a certain minimum feedback vote and rating. We’re constantly trying to improve AuctionMapper and I was wondering if you think it would be helpful if we added a filter for these fields. In other words, have a field where you can specify a minimum feedback rating and feedback vote total, and then items which don’t meet these minimums would not be shown in search results.
Just curious how important this may be for shoppers.