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  • 1. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community The implications of eBay for the policy community: eBay as a source of self employment, consumer issues and online community as a policy tool Chimera Working Paper Number: 2006-09, January Ellis, R. M. & Haywood, A. H. &
  • 2. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Chimera The work reported in this paper is part of the scientific programme of Chimera, the Institute for Socio- technical Innovation and Research at the University of Essex. Chimera is a post-disciplinary institute employing social scientists, computer scientists, engineers, anthropologists, psychologists, HCI practitioners and interface designers specialising in ‘socio-technical’ research and consulting. It was set up in April 2002 at Adastral Park, Suffolk as a research institute of the University of Essex. Chimera carries out research which combines the social and technological sciences to: • generate insights into personal and social use of information and communication technologies, • ground technological innovation in an understanding of people, • provide analysis to support evidence-based 'information society' strategies and policies in the public and commercial domain. We achieve this through a balanced programme of basic and applied research projects, consultancy and publication. For more information see Contacting Chimera Chimera Tel: +44 (01473) 632238 Institute of Socio-Technical Innovation and Research Fax: +44 (01473) 614936 Ross Building (PP1, ROS-IP) E-mail: Adastral Park, Web: Martlesham Heath, Ipswich, Suffolk, IP5 3RE UK Citing This Paper Readers wishing to cite this paper are asked to use the following form of words: Ellis, R. M. and Haywood, A. H. (2006) ‘The implications of eBay for the policy community’, Chimera Working Paper 2006-09, Colchester: University of Essex. For an on-line version of this working paper and others in the series go to Acknowledgements We would like to thank the ESRC for their financial support for this report’s fieldwork and writing up. This was funded through RES-000-23-0433 ‘Virtually second-hand: Internet auction sites as spaces of knowledge performance’. © 2006, University of Essex All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form, or by any means, mechanical, photocopying, recording or otherwise, without the prior permission of the Director, Chimera.. © 2006, University of Essex Page 2 of 46
  • 3. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Table of Contents 1 Introduction: eBay and policy...............................................................................................................4 2 eBay and self employment ....................................................................................................................7 2.1 Case studies of self employed eBayers ................................................................................................9 2.1.1 Valerie ...........................................................................................................................................9 2.1.2 Alan .............................................................................................................................................10 2.1.3 Tamsin.........................................................................................................................................12 2.1.4 Helen and partner .......................................................................................................................14 2.1.5 Sid ...............................................................................................................................................14 2.1.6 George.........................................................................................................................................15 2.1.7 Bill ...............................................................................................................................................15 2.1.8 Patrick .........................................................................................................................................16 2.1.9 Richard ........................................................................................................................................16 2.1.10 Donald .........................................................................................................................................17 2.2 Reasons for choosing eBay as a source of self employment .............................................................17 2.3 Positive elements of eBay self employment .......................................................................................19 2.4 Negative elements of eBay self employment .....................................................................................20 2.5 eBay self employment and start up help............................................................................................25 2.6 eBay self employment and threats and opportunities for employment elsewhere ............................28 3 eBay and consumer issues...................................................................................................................33 3.1 Consumer rights and privacy..............................................................................................................33 3.2 Fraud and consumer protection .........................................................................................................38 3.3 Redress: perceptions of eBay as an agent of redress........................................................................40 4 eBay: national electronic markets and online community as a policy tool................................42 5 References ..............................................................................................................................................43 © 2006, University of Essex Page 3 of 46
  • 4. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 1 Introduction: eBay and policy The rise of the ‘eBay phenomenon’ (Bunnel and Luecke, 2000) has had implications for the wider policy community of the government and voluntary sector organisations, and others interested in public policy. This has first and foremost been in terms of self-employment. eBay has meant 10,000 full-time jobs (Bown, 2005) and 50,000 Britons earning some money from the online auctions site (Blakely, 2005). Organisations such as PRIME, which is dedicated to helping those over 50 set up in self-employment, have provided help for eBayers to start selling – such as providing loans to help buy stock (see PRIME, N.D.). However, the majority of eBay sellers have begun their businesses with no help, and eBay has provided an easy entry route with few of the traditional barriers (see Amelang, 2005; Miles 2005a; 2005b) of having your own business – with no formal training (Cobweb Information, 2004) or a shop premises needed, and providing the ability to build and experiment with a business gradually (Miles 2005b). This may seem like a self- employment panacea, which should be backed up with more help from government and voluntary sector organisations. Indeed, eBay may provide an income for those who have been excluded from the formal labour market in some way such as by being made redundant, being a carer for children or being differently- abled. However, being an eBay trader mostly involves reselling new or second-hand commodities rather than ‘self-authored commodities’ (Crewe, Gregson and Brooks, 2003a) which result from artistic or other skills. With re-selling new commodities, an eBay business is at risk if a competing seller finds your wholesaler and undercuts you. With eBay, search costs for consumers are very low (except in terms of the opportunity cost of the time spent), and this means that they become more demanding in terms of finding their preferred product at the lowest price (Bakos, 1991), making it difficult for sellers to maintain high prices (Lee, 1998). Sellers profits are decreased in this way, and this is particularly apparent for uniform commodities (such as CDs, new consumer electronics items) rather than more unique or differentiated commodities. With selling second-hand items, ‘original’ items are becoming more difficult to source because of the expanding market and because the items themselves are becoming more scarce (Crewe, Gregson and Brooks, 2003a). Reproduction items are used by some sellers to offset these problems of second-hand supply. However, some sellers do not declare that their items are reproduction (a particular problem in the antique and vintage jewellery section, where it can be very hard to tell an original from a reproduction item), which gives them an unfair advantage over those determined only to sell ‘originals.’ Originals are more costly in terms of the time needed to search for them, how far you have to go geographically to source them, and the price you have to pay before you sell on. Many eBay sellers are using their innate knowledge and cultural capital (op. cit.) for competitive advantage – to ‘spin’ items in the ‘appropriate’ way for others with similar tastes operating similar distinctions. While such knowledges are situated and can’t be taught or learnt (op. cit.), which gives a competitive edge, there are many eBay sellers with such knowledges who may be running a shop and selling on eBay, or may have transferred over completely to selling online to reduce their overheads. Crewe, Gregson and Brooks also see some second-hand retailing such as retro retailing as using ‘eminently plagiarizable’ (2003a: 91) notions of taste, distinction and quality. We would argue that with eBay these notions are even more plagiarizable. eBay sellers are able to study how other retro and second-hand retailers ‘spin’ their items. Slater describes how different product definitions describe different markets, and how advertisers act as sociologists and cultural anthropologists to conceptualise and define their products strategically for the market (Slater, 2002). eBay sellers are also able to study which retro or second-hand sellers get better prices for their items, and deconstruct item pages for reasons why – such as photographing items artistically, describing in terms of legitimate taste or particular designers. Many eBay sellers also adopt a technique of ‘keyword spamming’ (see Meir, 2002) – using particular keywords to get ‘eyeballs’ for their items (such as ‘Eames era,’ ‘Panton,’ ‘designer’) – which they may lift from other descriptions or use tools such as eBay’s ‘pulse’, which give an indication of the most popular search terms for particular categories of goods. eBay sellers are facing considerable competition, which is reducing their profit margins. Indeed, policy makers have to think through carefully whether it is wise to recommend eBay as a source of self-employment, as its long term viability as a full-time income source can be called into doubt. It is advisable for eBay self-employment to be one income-stream amongst others – such as having a part-time job, a static e-commerce website or a physical outlet – so-called ‘multi-channel retailing’ (see Currah, 2002). In addition, eBay has posed a threat to traditional intermediaries and selling outlets such as specialist dealers, antique shops and antique fairs. It © 2006, University of Essex Page 4 of 46
  • 5. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community is necessary to examine the net growth in jobs from eBay – 10,000 full-time eBay sellers may have put other traditional selling intermediaries out of work. eBay has also attracted considerable media attention for the consumer issues it raises, such as consumer rights and privacy, fraud and consumer protection, and eBay itself as an agent of redress when things go wrong. The report recommends some changes to the way eBay represents both buyers and sellers on the site. For instance, private sellers and business sellers should be clearly differentiated across all sellers (not just those newly registered) to enable buyers to operate their existing consumer rights more easily. In addition it is recommended that eBay abandon the ‘data gathering’ element of their eBay toolbar, which has to some extent been rejected by users because certain elements appear as ‘spy ware’. eBay should enable users to differentiate between the real and ‘spoof’ websites (for eBay and PayPal), and real and spoof e- mails, without eBayers having to reciprocate by enabling eBay to gather data about their behaviour, even if it is only aggregated. Finally, eBay’s success has also been studied by the policy community itself. The IPPR, in particular, has discussed whether the eBay model could be used for setting up a government run National Electronic Market, where services are provided and rated with a feedback system. Rowan (2004) argues that eBay only operates in niche areas of the economy such as collectables, used cars, surplus and second hand goods, and that what most of us have to sell is our time available for work, or the hire of assets we own. However, this report argues that a National Electronic Markets system would need to iron out some of the entrenched problems of eBay’s feedback system such as bribing people to leave you good feedback or getting friends and family to leave you good feedback. Feedback is also a problem for services which last a long time and are expensive (such as building an extension) versus those which are short and inexpensive (baby sitting) – the builder would have to work a long time before acquiring any amount of feedback. The IPPR has also reflected on whether online communities are a policy tool, and if online reputation systems, like eBay’s, could be used as a public resource to build trust. Policy makers pose the question of how to enable trust between people who have not chosen to associate with each other, and if the government could be involved in creating online intermediaries and spaces where individuals could interact, and where there would be higher levels of trust. Davies (2004) points out that behind eBay’s self-regulating market is not just trust based on the reputation system, but also the might of Visa and Mastercard - which are used to defer some of the risks involved through the possibility of credit card chargebacks and insurance against fraud in online shopping. It also involves an ideological commitment to the system, Davies argues, which would not be apparent for those who have not chosen to associate with each other. Boyd (2002) comments that eBay’s introduction of buyer protection schemes which offer up to £500 insurance if you buy through PayPal and the seller is eligible, replaces trust by stopping the need for it, which is already undermining eBay’s community of trust. In addition, this paper would argue that amongst established eBay members, there is a feeling that the ‘true’ eBay community has been diluted by ‘newbies’ who do not understand the subtle etiquette involved, and also by criminals and fraudsters taking advantage of eBay’s rich pickings. eBay’s community of trust is itself fragile and highly contingent on the ‘eBay experience’ of repeated interaction, and if its ideas are transplanted to another situation, it would be difficult to build up the momentum needed that eBay has from its ‘first mover advantage’ in virtual communities (cf. Hagel and Armstrong, 1997). In this paper there is a sense of flux running throughout. eBay itself has changed rapidly over the course of our study. Self-employed eBayers faced easier times a year ago, in a less competitive market, and now perceive an ‘eBay downturn’ as bids are spread across more sellers. eBay has, itself, also changed and is continuously in flux – introducing new policies and site features such as the PayPal Buyer Protection scheme. eBay’s self-regulating market is increasingly being regulated through more formal enforcement mechanisms, and this also has a commercial edge to it. Since eBay’s purchase of PayPal, it has tried to operate a system ‘lock in’ (Hax and Wilde, 1999) in relation to PayPal – encouraging people to pay with PayPal from which it derives a percentage. eBay has tried to lock competitors out of eBay payments in a number of ways, including linking £500 worth of buyer protection insurance to its use, integration into the eBay checkout system and ‘outlawing’ the mention of some ways of paying, such as cash through the post, on eBay sellers’ item pages. Trust is potentially undermined by using PayPal as an enforcer, as Boyd (2002) suggests. Meanwhile, the eBay community is perceived to be changing for the worse, and it is unclear whether these © 2006, University of Essex Page 5 of 46
  • 6. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community two aspects will reinforce each other in the future to mean eBay trade is directed more towards business sellers with a good reputation who accept PayPal rather than the small-scale, ground roots collectors’ that, as the eBay story goes, it was initially created for (see Cohen, 2002). This report is split into three sections. It firstly looks at eBay and self employment issues, including the reasons why eBay sellers in the study chose eBay as their self-employment, its positive and negative aspects, and the threats eBay has posed to other forms of employment. It then examines consumer issues in relation to eBay, such as consumer rights and privacy, as well as fraud and consumer protection. Finally, it explores the use of the eBay system as a wider policy tool – its community and reputation system. © 2006, University of Essex Page 6 of 46
  • 7. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 2 eBay and self employment One of the attractions of being a self-employed eBayer has been the ease of entry to the global eBay market, without the need for formal training (Cobweb information, 2004). However, being an eBay trader or having an eBay-related business has many other attractions, such as being your own boss, working flexibly or having a business related to your interests. In terms of figures, the Centre for Economics and Business Research estimates over 50,000 Britons have earned money from online auctions, with over £4 billion worth of trading in the UK, or 1.3% of retail sales (Blakely, 2005). Various other facts and figures on eBay self employment have been released which show eBay self employment is significant in both the US and the UK. In the US, 430,000 small businesses were making all or most of their living selling on eBay (eBay, 2004). Selling on eBay, however, is not just for the sole trader – it may also involve employing staff in an eBay drop shop or consignment store. By the end of 2004, it was estimated that 1000 eBay drop off centres had appeared in that year in the US (Odasz, 2004). The Sunday Times (Bown, 2005) states that 10,000 Britons have given up existing jobs to trade full-time on eBay. This figure is based on the number of UK eBay Power Sellers. eBay, themselves, see eBay-related employment as very much a good news story, and the press is full of eBay self employment good news stories. As Douglas McCallum, eBay UK’s Managing Director, states in BBC 1’s The Money Programme, eBay: Money for Old Rope (08/02/2005): “I think that Gordon Brown and the treasury should be absolutely delighted that eBay has unleashed an astonishing army of entrepreneurs in this country. And they are paying their taxes. They are employing people, now, in quite large numbers. If we were an employer, we would be a very big company in this country, if you were to allow for the people that our sellers are beginning to employ”. Some courses exist which teach people how to buy and sell effectively on eBay. eBay run their own ‘eBay University’ courses all over the UK. City Lit college in London has also started a series of one-day courses (Bown, 2005). Few studies exist of eBay self employment. Miles and Davidson (2005a; 2005b) - using the eBay University scheme to help recruit participants, as well as the eBay community boards, direct e-mails and help from eBay staff - studied 31 participants across 14 product categories. They filled in a pre-interview questionnaire, and then took part in online semi-structured interviews. 52% were female and 48% male. All ages were represented with a mean age of 38. 42% were living with children, and 77% were married or cohabiting. All were white-British, and 23% had a disability or long-term illness. Miles and Davidson showed that 58% were using eBay as a sole personal income, and that most were using additional selling channels. Some wanted independence from eBay so as not to put ‘all their eggs in one basket.’ Some are planning to supply other eBay sellers, while others are moving to their own websites. Some see eBay as a way to get the experience necessary for e-commerce, and a foothold in their particular market. Their eBay business provided half the household income for 58% of them. Miles and Davidson also examined the motivations for being an eBay trader. 42% of her sample were business seekers – who wanted control or autonomy, financial gain or had a passion for their product – such as a hobby which they wanted to make their living. 39% were income seekers who had a forced exit from other employment, a disability or long-term illness or caring roles. 19% were balance seekers who wanted a better work-life balance, time sovereignty (working when they want to) or a family-based lifestyle. 35% did their eBay work alone, and the rest involved other family members. Miles and Davidson note that all of her sample started off by casually buying and selling on eBay. For the income seekers, this turned into being a full-time eBay seller when a life event forced them to see it as a feasible income source. With balance seekers and business seekers, they recognised eBay’s potential and built their business to a point where they could leave work – which meant running their eBay business in parallel with full or part-time work. Miles and Davidson also noted the poor perceptions of eBay traders. Wholesalers were reported to have a very negative view of eBay, which was related to their other customers’ antipathy towards eBay. With eBay’s low overheads, it was possible that wholesalers’ other customers couldn’t compete, and put pressure on wholesalers not to supply eBay sellers. Others felt wholesalers wouldn’t supply because of the generally bad image of eBay sellers as nothing more than market traders (Miles and Davidson, 2005a). Miles and © 2006, University of Essex Page 7 of 46
  • 8. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Davidson also examined the positive and negative aspects of being an eBay seller, as this study does. Her sample was generally very positive, and said they would not go back to being employed. Miles and Davidson (2005a) state that this is part of the positivity expressed by business owners and home workers in general, but that there were two eBay-specific positive themes. eBay’s 24/7 nature which means your shop ‘stays open’ without you being physically present gave people considerable flexibility to use time how they wanted. Secondly, eBay was seen as equalising. No discrimination against you is possible based on how you look or how you fit into axes of social differentiation. All also have equal access to a global market which is not dependent on having a big company budget, and no longer totally dependent on a fixed geographic market of passing trade. Negative aspects of eBay self employment that Miles and Davidson (2005a) identified were the long hours involved, social isolation in working from home, uncertain income and having to do mundane eBay tasks – such as packing. Perceptions of eBay are also poor, according to Miles and Davidson (ibid.) – with criticisms of high fees and poor customer support. As seen from Miles and Davidson’s results about wholesalers, being an eBay seller has a poor status amongst other people. It is looked down upon, and not seen as a proper job, including by friends and relatives. There is also a perception amongst eBay sellers that being an eBay seller is more difficult now than a year ago – nearly half of those questioned believed being an eBay seller was easier a year ago (ibid.). This was partly due to increased competition and market saturation, which particularly occurred when sellers used the same wholesaler. Price differentiation then became the only thing to set them apart, which cut profitability. Amelang (2005) has also carried out an ethnographic study of eBay self employment in Germany. She talked to 14 newly self-employed eBayers. Her study concerns inconsistent autonomies and entangled subjects. Although eBay self employment holds out the promise of autonomy, as stated by Miles and Davidson (2005a), work and home are entangled in terms of time and space for eBay sellers because eBay stock is kept in the home space and they run their eBay businesses 24/7. However, they still prefer being eBay sellers to their previous jobs. Amelang draws on Foucault’s concept of governmentality to think about the controlling and governing processes through which self-employed people make themselves. Amelang states that calculating selves are mobilised in the eBay entrepreneur, acting upon themselves reflexively for improvement. Amelang mirrors Miles and Davidson in highlighting the low barriers to entry for eBay self employment. This means that eBay could be run alongside existing jobs which were kept or reduced, as a creative outlet or challenge. Her study also indicated a desire not to be too dependent on eBay, as with Miles and Davidson’s study – people also wanted their own online shop. She notes some of the paradoxes of eBay – people cite the advantages of eBay’s flexible working but there is a self-imposed disregard for leisure time. People value flexible working to be at home with the children, yet they have little time to do anything because they are working all the time. eBay sellers are said to be architects of their own time, yet they have self-imposed time constraints. Some people try and discipline their work/ home boundaries at home by switching off the phone and computer. eBay sellers are said to have a paradoxical autonomy of independence in being both free and compelled to work as their own boss. Our own study draws on interview material and two experience diaries from 10 people who derive all or most of their earned income from eBay. The sample size is not high, as the study attempted to look in depth at their eBay experiences, rather than be representative. 80% of those interviewed were men, 10% had a disability and all were white. One respondent was from Germany living in Britain, the others were British. In some of their circumstances, eBay may not bring in a ‘liveable wage,’ but supplement other sources of non- wage income (such as student loans, savings, pensions) as part of being a ‘hobby business’ which helps keep their finances on an even keel. The eBay sellers in this report are presented as case studies in section 2.1, and these are examined first in order to introduce the people and their situations which inform the rest of the paper. Many of the results from our own investigation into self employment echo Miles and Davidson’s findings. The eBay self employment data we have gathered is explored for the policy community – to show the reasons for starting an eBay business, its positive and negative aspects, as well as the start up help eBay sellers would like or require and the threats of eBay selling to other types or forms of employment. © 2006, University of Essex Page 8 of 46
  • 9. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 2.1 Case studies of self employed eBayers 2.1.1 Valerie Valerie started using eBay on the basis of a personal recommendation from a manager at the Building Society where she worked, in a city in the west of England. She had always been interested in antique and vintage jewellery, and bought a lot on eBay. When her credit card bills started going up, she persuaded her partner to buy her a digital camera for her birthday, so that she might sell a lot of the jewellery she had which she had not worn. She was encouraged when money started rolling in, and decided to try and resell jewellery she sourced from pawn shops. She ran her eBay selling in parallel with working at the Building Society for a while, until she became bored with the Building Society. She found she was better at selling jewellery than long-term investments, and thought she could make a liveable wage from eBay – now having over 1000 feedbacks. She currently sources her jewellery from auctions and fairs, which she describes as the ‘middle men.’ She does not go to estate sales or take jewellery from house clearances, and she acknowledges that she is therefore likely to pay more for her stock. Valerie did well in the early days of her eBay selling, and she suspects this is down to increased competition from other sellers. She describes herself as “one of the main ones” a year ago, when there were only about 19 pages of vintage and antique jewellery for buyers to look through. Now she notes there are 50 pages. She believes there is an ‘eBay downturn’ – with some items not reaching their reserve or ending at low prices, but is not really sure why, but perceives eBay have got ‘too big for themselves.’ eBay have also started asking sellers to reduce their reserve prices before items end, and this has contributed to her perception that there is a downturn. Sometimes her items sell for less than she has paid for them. eBay listing fees and charges for PayPal are a significant amount a month, between £300 and £500. She has considered selling elsewhere than on eBay, such as having a ‘cabinet’ in an antique shop, but has no where local which would provide that opportunity. She is now planning to start her own e-commerce website, independent of eBay, in order to reduce her costs and potentially sell at higher, static prices (multi-channel retailing). She also has a contact that can supply her with higher quality, more expensive jewellery which she would put on her own site – she fears eBay would be no place for it, as she perceives most eBay money to be in cheaper, reproduction rings. One of her friends is interested in becoming an eBay jewellery seller, but Val fears she is putting her off: People are going for that kind of thing [reproduction], believing it is the original Georgian, you know, but they’re not going for my nice trilogy engagement ring. And, you know, I’ve got one on at the moment. It didn’t even make what I actually paid for it myself, there was no way I was going to let it go for that price. I’ve got a friend who’s interested in selling jewellery, I don’t know if I’m putting her off, she’s interested in selling jewellery on eBay herself, and I said about this three stone trilogy ring, it’s got half a carat of diamonds in, I’m just asking £250 for it, and I said, ‘where would you find over a half a carat trilogy ring in a shop in town, for £250. You wouldn’t.’ eBay is perceived to be a place for ‘bargains,’ and so there is potentially a downward ‘stickiness’ in prices for items like jewellery which have an intrinsic value. There is such a downward pressure on prices that Val feels some jewellery shops are buying on eBay to resell in their physical shop. There are considerable tensions in the jewellery category between those selling ‘original’ pieces versus those selling reproduction ones, which are often described in terms which hide their recent origins. Those people selling reproduction jewellery have a lower costs base, and to some extent provide unfair competition to those selling ‘originals’ such as Val. © 2006, University of Essex Page 9 of 46
  • 10. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 2.1.2 Alan Alan is a self employed eBayer who sells vintage textiles and related design items from the ’60s and ‘70s, such as retro clocks and kitchenalia. He has been selling on eBay for 18 months. A trained textile designer, Alan saw a television programme where two women were selling ‘50s and ‘60s items on eBay, and thought he’d have a go too. He couldn’t find a job in textiles design, but thought he would use his knowledge to find and sell textiles to other people. Retro retailing has recently been explored in the literature (Crewe, Gregson and Brooks, 2003a; Crewe, Gregson and Brooks, 2003b), which provides considerable insights for understanding the knowledges, risks and competition involved in such an endeavour. Retro retailers such as Alan are said to have an ambiguous relation to the profiles of other cultural industries workers – relying on his knowledge and tastes (cultural capital) for their creativity and commercial edge, rather than artistic capacities in creating his own commodities (Crewe, Gregson and Brooks, 2003a). This means that he constantly has to rely on his knowledge for a competitive edge, when there are aesthetic and stylistic shifts (Crewe, Gregson and Brooks, 2003a) which mean that such knowledge is constantly under review – Alan has to closely watch his eBay market in terms of what sells and doesn’t sell. Alan enjoyed the thought of working for himself rather than other people – mirroring Leadbeater and Oakley’s (1999) argument that autonomy, although involving insecurity, is perceived as better than working for a large organisation. ‘Independents’ in Leadbeater and Oakley’s study did not want to be told what to do by an employer, they wanted to work for themselves so they had a sense of ownership and authorship. Ironically, Alan saw selling vintage textiles as a less competitive area of eBay selling in terms of finding supply. Those picking over spaces of second-hand supply, such as car boot sales and charity shops, saw ceramics as a way of making money, but ignored the textiles. He regularly frequents local charity shops and car boot sales, and has built up some contacts at the house clearance end of supply, who save things for him. He uses his knowledges and tastes (cultural capital) to seek out profitable items for retro exchange (cf. Crewe, Gregson and Brooks, 2003a). He has learnt about being an eBay trader as he has gone along, thinking about his global market (40% of his sales are international), how to best ‘spin’ or angle his item descriptions, and making sure his eBay shop is full of a variety of items, not just textiles. He has begun using dress patterns to entice people into his eBay shop, and to perhaps get them to buy the fabric for the dress there too. For Alan, his eBay shop is a very visual thing, and he likes to put in a mixture of retro items to attract people to the shop visually, even if they’re not money makers: “You can’t always do it, but you try to make your shop look attractive, and some things you put in there that you know you might make a small loss with, but it makes the others look good - it brings people in.” eBay is about a very visual experience for eBay, and this even determines what stock he buys. If he does not believe it will look good in an eBay gallery thumbnail picture, he won’t buy it: But yeah. It’s like, um, you know, I see some of the photographs people have and I go: ‘oh no, you’ve done that wrong, it doesn’t look right.’ It’s also going around, and yes there are fabrics which you can choose, but they’re just not going to photograph well. I think if - I must admit going round shops and stuff and saying: ‘would that make a good thumbnail?’ No. Well I don’t want it then. Because, I know it’s sad, but it’s all about the thumbnail more or less. Like people look through - they don’t look at the titles so much. They’ll put something in: ‘I want to look for such and such,’ and then they’ll go down the thumb nails. His income is often erratic. Some of his vintage textiles are fetching more money now than a year ago, because the supply of ‘60s and ‘70s fabric is drying up on eBay. Yet Alan has also noticed more competitors springing up, who are copying the way he describes his textiles. Crewe, Gregson and Brooks (2003a) suggest that the barriers to retro trading are low and relatively risk free – which exacerbates problems of competition. Many sellers are undercutting him, he believes, because they are not selling to make a liveable wage, but are doing it part-time, supported by another income stream, such as that from a partner: …there are loads of people down here who are doing it part-time, or, you know, they’ve got like some stock broker husband, and so they don’t need to work, and they’re selling stuff, and they’re selling them dirt cheap. And © 2006, University of Essex Page 10 of 46
  • 11. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community you can’t compete with that if you want to make a living. And it’s a bit like that in a way. There are people out there who are selling fabric dirt cheap, and you think: ‘you can’t sell it for that, because the rest of us can’t make a living.’ So, you know. You can’t stop people - you think, if they’re doing that, I’ve got to have some kind of edge or angle to make up for it. Earnings also tend to be erratic for Alan because of the seasonality of eBay demand, which can fall dramatically in the summer months and are unpredictable at Christmas. A lack of international bidders can also seriously affect prices. Erratic prices present real cash flow difficulties for Alan. Because of delays in getting PayPal payments to his bank account (taking 7 days to clear), having a bad week revenue wise might have to fund high postage costs from a good week. A bad week has a real impact on his life, although his partner’s income helps: I found that really tough. And there’s only me. And it can be quite frightening because it is only me, and if I don’t sell then I can’t push the trolley round Tesco at the weekend. There’s no money. OK, my partner does work as well, so I’m propped up to a certain extent by her, but, you know, that’s lucky. So I can’t say I necessarily support myself all of the time. Alan is concerned about the long term supply of ‘60s and ‘70s items: “not really much to report. went to a car boot and got a few items - there doesn't seem to be as much fabric around anymore - it's either drying up or i am getting fussier - a bit of both i suppose” (Alan’s blog, July 30th 2005). However, ransacking the 1980s is not seen as possible by Alan: The thing is, we used to collect Art Deco, and then it became too expensive, so we started collecting ‘50s, then that became too expensive, and we began to collect ‘60s and ‘70s. But ‘80s really seems to be problematic, like people seem to have this thing against the ‘80s, and, you know, it just doesn’t seem to be working. Alan does not feel much loyalty to eBay, and would prefer to deal with a number of eBay type companies so as not to put all his eggs in one basket. However, he acknowledges that most people have heard about eBay and look in preference at eBay rather than other sites. Alan’s case exhibits many of the elements reported by Crewe, Gregson and Brooks (2003b) in their discussion of retro retailers. They examine retro retailing as existing in an ambiguous space between mainstream retailing and an imagined ‘alternative’. Selling retro involves selling items which were once mainstream mass-produced fashion commodities (cf. Crewe, Gregson and Brooks, 2003a), and Crewe et al’s (2003b) respondents are also more ‘mainstream’ by virtue of selling through ‘bricks and mortar’ shop outlets. eBay sellers selling retro, such as Alan, are more ‘alternative’ through having no shop presence, or even a market stall. eBay itself is seen as an alternative consumption space which works against mainstream retailing – featuring second-hand goods you can no longer find in the shops, where mostly there are no money back guarantees, a place where you can defer payment if you run out of money that month and somewhere to get a bargain. It is subject to various analogies such as eBay as car boot sale or jumble sale – which break down on closer analysis – but form part of user perceptions nonetheless. Alan also sees eBay as an ‘alternative’ source of employment against the mainstream – with having no boss or employer, and being able to work from home. Crewe et al. (2003b) present retro retailers patterns of talk as oppositional, scene- setting, highlighting creativity, involving being different and doing things differently. The mainstream is imagined to be predictable, about following trends and routine, and by implication, about being dull (op. cit.). The alternative is juxtaposed with the mainstream as imagined in retro retailers’ talk. Crewe et al (2003b) discuss how retro retailers fetishize their commodities in particular ways of talking. They mention the aestheticization of commodities – described as ‘beautiful things’ by one of their sellers who runs a retro and vintage clothing shop in Notting Hill. Alan is also involved in the aestheticization of his items through the visual rather than through talk for his buyers – making sure his shop is visually attractive and that he buys items that look good in thumbnails. © 2006, University of Essex Page 11 of 46
  • 12. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community They also cite Garnham’s work on media producers and those working in cultural industries, which argues that in interview situations, such people over-emphasize the creative elements of their work and the ‘glamour.’ Crewe et al. (2003b) term this ‘celebratory talk,’ and feel this is likely to be performed for unknowing outsiders such as researchers. However, Alan, in his blog and interview, limited his celebratory talk of being an eBay seller of vintage textiles. He revelled in the fact that he could finally use his legitimate knowledge (cultural capital) and resultant taste from being a trained textile designer, and enjoyed the glamour of selling all over the world. He also used celebratory talk in terms of the item for which he got his biggest profit – his ‘profit story’: …of course most sellers on ebay have their best profit story. i suppose mine would have to be the verner panton fabric that i picked up for £2.99 and sold to a customer in japan for £165. of course usually its a lot more mundane than that. (Alan’s blog, 14th August 2005) However, he immediately ‘pricks the bubble’ of this celebration by mentioning that most transactions are more mundane – and therefore more like mainstream retailing than something ‘alternative’. Alan’s patterns of talk are punctuated constantly by the difficulties he has in being an eBay trader and a retro trader. Crewe et al. mention the ‘talk of the disenchanted’ (2003b: 72) and the difficulties facing retro retailers in terms of sourcing their second-hand stock (cf. Crewe, Gregson and Brooks, 2003a), and increasing competition in selling retro, which leads retro sellers to talk nostalgically about former times. Alan talks about the hard work involved in being an eBay seller of vintage textiles – not only the hard work involved in sourcing his stock from contacts, charity shops and car boot sales, but also the ‘hidden labour’ involved in washing and ironing the textiles, and turning them from the commodity they were - some curtains, a duvet - into a piece of fabric. Paradoxically, turning former mainstream textile items into ‘alternative’ items means doing forms of labour which are themselves more mainstream or dull. In terms of the repro/ retro divide that Crewe et al. (2003b) feature – in which retro retailers operate ‘distinction talk’ to differentiate authentic retro from its reinvention in the form of reproduction fabrics, Alan does differentiate, but not disparagingly: A: […] The modern stuff, as long as you put ‘retro style,’ that seems to go down quite well. Um, but maybe it’s because it caters for today’s market, rather than a market 20 or 30 years ago. R: So the retro stuff that is designed for today’s market is actually different from the retro stuff of the period? A: Yeah. But people don’t seem to mind. Um, I don’t really sell to collectors. I’ve had one or two pieces. I’ve had a Bernard Panton piece once that went to Japan, and I’ve had a couple of pieces like that, and then you realise the collectors are quite fussy and they’ll say: ‘has it got this, has it got that?’ But I don’t tend to sell to collectors, I sell to people who just like the styles or the patterns and want to do something with it. As with Kevin, a manager of a retro shop in Bristol in Crewe et al.’s (2003b) paper, Alan has no problems with widening retro selling to include the reproduction. This blurring happens with the use of the term ‘retro style’. Alan only associates collectors with wanting to police this distinction of authentic/ inauthentic, whereas he is keen to satisfy what his customers want – certain styles and patterns of fabric to make things out of. Making enough money to go to Tesco’s and get the groceries at the end of the week overrides the distinctions. 2.1.3 Tamsin Tamsin is the youngest self employed eBayer in the study, being in her late teens/ early 20s – the youngest in our study. She sells vintage clothing and accessories on eBay, which are all taken from her mother’s extensive collection. The money from it is used to pay the bills and run the house which she shares with her mother and brother in South West England, while her mum is doing an MA. She also has a job in the local © 2006, University of Essex Page 12 of 46
  • 13. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Post Office two days a week, which fits in well with her eBay selling, and she can get items weighed and posted at the same time. She has been selling on eBay full-time for 18 months, and has a feedback of 769. She sees eBay as a way to sell the collection without the overheads of a physical shop, and to a wider geographical market. She also cannot drive, which to some extent limits her other job opportunities. She sees her eBay selling more in terms of a ‘hobby business,’ and doesn’t really want to think about it as a business in terms of ‘in and out,’ profit and loss. Her income is sometimes erratic, reflecting the wide range of prices she gets for her items. She feels she cannot use her time effectively enough to make it a ‘proper job’: T: Yeah, and my profits kind of.. as the labour got easier my profits did increase but they kind of flattened out ‘cause I don’t treat it enough, I’m not strict enough with time to make it a proper job I think working for myself means that I.. I’m not, you know, I don’t use my time effectively really even given that I’m getting better at the, er, actual time spent preparing and actually describing as well. Now I can sit and write a description off the top of my head and know that it’s going to right rather than having to even ask mum really. […] RE: Yeah, so I mean, by saying that do you mean you think you should maybe be selling more per week or more per month or.. is that what you mean by..? T: Yeah, I feel like that. I feel like I could do more but then I don’t seem to be able to. […] I’m getting better, like I’ve started.. I think tried to do it by my own speed and I started using, like I use Turbolister. Much of this problem of using time effectively appears to be related to the ‘hidden labour’ or “hidden industry” as she calls it behind her selling (like Alan, above) – the time it takes to wash and iron the clothing items and the time needed to describe them adequately – for her, to describe the clothes so the buyer has a ‘virtual experience’ of them. Tamsin also has long term concerns in terms of her supply of vintage clothing items. Her stock of clothes is diminishing, and if she wishes to continue trading, she will have to find another source. Her mother paid very little for the items from charity shops, or was given them by other people clearing out their ‘dated’ clothing. Like Alan, Tamsin is a retro retailer, but again engages in little of the ‘celebratory talk’ that Crewe, Gregson and Brooks (2003b) discuss, arguing after Garnham. What celebratory talk she performs, mostly involves what Alan, above, calls a ‘profit story’: Er kind of, I got £230 from a guy in LA for an Ossie Clark dress, er, and it was like a 1970s line that used 30s styles and patterns. […] And er, yeah, that sold for a lot. […] I think that was one of my biggest things. She also enjoyes aestheticizing what she sells. She describes her stock as ‘beautiful’: “I’ve sold some really beautiful things, like really lovely things,” and also differentiates her vintage stock from the mass-produced/ mainstream which she sees as dating from the 1950s: Because peoples’ mums were only 30 or 40 and they were chucking out all their old 1930s gowns and clothes because they weren’t fashionable anymore. […] Nylon.. so you know, you could pick up tons of really beautiful things for cheap, because definitely the quality of clothing changed after 1950, not quality but it becomes mass produced and you can tell, rather than the sort of finesse you get on older stuff. She displays clothing knowledge to differentiate her stock from the mass-produced. Tamsin also spends a considerable amount of time constructing her items as ‘beautiful’ and ‘special’ through their packaging: Not always, some people just write ‘thanks’ or ‘great’ or something like that, but a lot of people say, they deliberately comment on things that you pride yourself on, like I love my packing, I like to pack neatly and send out nice brown paper parcels really securely taped, and square and beautiful and everything is in tissue paper.. […] .Ironed and pressed and nice and er, you get, you know, a lot of people say ‘really well packed’ and like a ‘great item’ and things like that… © 2006, University of Essex Page 13 of 46
  • 14. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Those who sell retro and vintage items on eBay engage in some of the practices of talk we would expect from retro sellers with a shop or market stall. However, their talk appears to more punctuated by disenchantment and commercial concerns – perhaps because of the highly competitive environment they are facing, their difficulties in finding stock on the basis of a fairly high stock turnover each week and the financial pressures they are under as self-employed sellers with no other income source. 2.1.4 Helen and partner Helen began using eBay in 2002, just after her daughter was born. She started off by buying children’s clothes, but later sold large quantities of stamps on behalf of a local hospice, as well as other odds and ends for herself such as toys. When her husband, Greg, was unexpectedly made redundant and didn’t want to go back to the boring and mundane job he had done before, eBay seemed like the solution, and they felt they could learn as they went along. Greg sells china items on eBay, which come from local auctions and charity shops. They have an interesting division of labour. Helen picks the stock and sets the buying price limits, looking at auction previews and researching prices before buying, sometimes using eBay’s completed item searches. Greg then goes to the auctions and bids for the items. Helen helps get the item descriptions correct by using books on china collectables. Greg packs the items and posts them. Greg earns enough from eBay not to have to go out to work, but he does have a part-time job two or three evenings a week. This is described as a way for him to get out of the house and socialising: He does have a small part-time job that he works 2 or 3 evenings a week, mainly to get him out and talking to adults and things. […] Rather than the money, you know (laughs). […] Otherwise being at home with the children all day, I think he’d go round the wall after a while. […] Er, but that’s mainly more of a social thing, because it’s for the money really . (Helen, partner of self employed eBayer) With Greg at home and Helen having a responsible professional job with long hours, Greg’s eBay job means that a better work/ life balance is possible. Although one child is at nursery and one child is at school, Greg can do the school run and also look after the children at home if they are ill. He also does much of the informal labour of the house, such as cooking and cleaning. With some changes at work, Helen is enjoying her own job less, and is tempted to give up her existing employment in order to sell bespoke jewellery on eBay. 2.1.5 Sid Sid started selling on eBay in 2001, after he lost his stall in a building on Portobello Road when it was taken over by the clothing retailer Gap, and there were major waiting lists for stalls elsewhere. He had always been a trader, and had been at Portobello Road for 20 years. His brother dealt in military equipment surplus, and Sid was a dealer in a variety of mechanical antiques – from valve radios and horn speakers to sewing machines and scientific instruments. Although Sid had built up a list of regulars who wanted particular items, they did not want everything he was offered or managed to buy, so eBay ran alongside his regular clientele. Sid had had known about eBay since 1996, hearing about it on the grapevine from other collectors who used it. However, he did not own and could not work a computer before 2000, when a friend on the market at Portobello Road asked if Sid wanted his old PC. Sid bought a ‘Computers for Dummies’ book, and was on the Internet within an hour. He was amazed by what he saw on eBay, and wondered why he’d taken so long to get on it. Sid was initially very successful on eBay, selling items at surprisingly high prices which he would have passed on with lower margins at Portobello Road: S: Go and buy it and that’s it. I found a very rare television, by going to an antiques centre. Normally, if I was at Portobello Road, I’d put a pass on it. Um, and that’s it, it’s sold. But this particular television is quite a rare one. It was a 1930s Marconi. And made three and a half grand, you see. © 2006, University of Essex Page 14 of 46
  • 15. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community R: And that was on eBay. S: That was on eBay. We all had a shock, you know. But that’s how it is, eBay. For a while, Sid did well on eBay, getting much higher prices than he could have expected from the stall. 1950s Singer sewing machines of a particular model were selling to America for £300 - £700, for quilt making competitions. However, he has recently seen prices fall back again for less rare items: So, that is it really, the general things like normal cabinet radios or some bakelite radios, are not making the prices on eBay as they did when it first started. As I say, Amplion horn speakers I used to get £75 or £80 at Harpenden, or down the market, but when I went on eBay, they were fetching massive prices - £200, £240 - you know. So, you know, it’s - but from what I hear now, they’ve gone down again you see. I mean I’ve had some people say: ‘I can’t get these prices, that we’ve had in the past - you’re lucky to get £100 or £110, you know.’ By the way, I don’t know if you’re familiar with these speakers, but there is an Amplion horn speaker with a little bird on it, a little silver bird - one of them made £850 pounds. So they’re looking for rare pieces, you see. The rarest pieces, those Sid refers to as “the cream,” still fetch extremely high prices, but these are very difficult to source: Well, as I say at the moment, they only want what you call ‘the cream,’ the best stuff, you know. Um, so, if you can find it, because it’s quite difficult, you know. Sid increasingly feels that it is getting harder to source items, particularly as he perceives people are increasingly aware of the value of collectables in his field. 2.1.6 George George is one of the most well-recognised sellers of radio and audio items on eBay. Like Sid, he has a list of regular buyers that he supplies to, but eBay makes up about half of his business. He also uses eBay to sell items that his clientele don’t want, but has an innate feeling about what to offer to them versus put on eBay. He sells a constant amount each week, listing about 15 items, and feels this is the right level for him to make a living, although it would be possible for him to increase the size of the business. At 63, George does not want to increase the number of items he sells, and would also need to employ someone if he did, for packing the items. It would also mean changing his workplace from his home double garage, and paying for premises elsewhere. He also has a disability which means he cannot drive very far, and could not go to traditional radio swapmeets such as Harpenden and the NVCF (National Vintage Communications Fair) at the NEC (National Exhibition Centre). He has very strong established networks of supply in the South and South West – mostly house clearance firms, and local auctions also inform him of items of interest. eBay is earning him the level of income that he wants. 2.1.7 Bill Bill registered for eBay in 2000, and thought he would use it purely to buy, but soon ended up selling as well. He still buys for his own collection, picking up bargains such as a cover signed by the 1966 World Cup team for £30, which is worth £300. He snipes items at a quarter of the catalogue price. The best items he acquires remain in his collection. Bill now likes to think of himself as a ‘hobby trader,’ and sells (stamp) covers at prices he would never have expected, including some which fetch prices which are higher than buying directly from the cover manufacturer. His feedback was 896 at the time of the interview, with 3,098 transactions – indicating a lot of regular buyers. He became a cover dealer in a bigger way after buying a © 2006, University of Essex Page 15 of 46
  • 16. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community quarter share of another dealer’s collection, when that dealer decided to sell up in his mid-70s. As part of this quarter collection, he obtained many covers he didn’t want, and decided to sell the surplus on eBay. Bill also acquired a lot of football related covers which he has sold on eBay, as they fetched better prices on eBay than at fairs. He goes to physical stamp/ cover exhibitions in parallel with his eBay selling, having a stall at 16 a year. He also has his own static e-commerce website, but that doesn’t earn more than £200 a year. 2.1.8 Patrick Patrick is a University student, who used to pay for his rent (£500 a month), pay the bills and for going out through selling on eBay, while holding down another full-time job to see him through his gap year. He and a friend took home free cinema posters from work, selling about ten a week – ironically often back to other university students. This was quite lucrative, as the items they were selling cost them nothing in the first place. When the cinema job finished and Patrick returned to University, he continued using eBay to supplement his income, but in different ways. He often bought CDs for pennies on less well frequented auction sites, only to resell them for a considerable profit on eBay. Reselling was a major part of Patrick’s strategy to earn money: P: A lot of CDs, actually. Some DVDs. I think charity shops are quite good - I’ve bought this massive box of CD cases, ad I just go to charity shops and buy the CDs for 50p and then just put them in a new case and then you can sell them on, because some of the cases are damaged. So you tend to get more money for them. ALL: [laughs]. K: Buy then in the charity shop and sell them online. P: Yeah [laughs]. Plus anything that’s lingering at my parent’s house - they tends to lose it if I think it’s not being used and hasn’t been for six months, or something. ALL: [laughs]. K: They find it on eBay. That looks just like the one we had. RE: Where’s our lawn mover gone? P: And like, any free gifts that anyone in the family gets, I now get to sell them. If you sign up to something and get a free DVD, then I get that to sell. RE: Yeah. Did you give them a share, then? P: I don’t know - no, not so far. I’m waiting for them to … I haven’t really told them, like, how much I do it though. How much money I’m making. On my ME page it says this is funding my university, and you can have it [laughs]. He resold items which cost very little or nothing to buy – CDs from charity shops which he recased, unwanted items from home and free giveaways. But this was underpinned by market research of what was likely to sell and for how much. 2.1.9 Richard Richard used to work in investment banking and was looking for a business to invest in. He went to America to look at various opportunities, but was already familiar with eBay as part of researching technology companies for an American bank. Opening eBay ‘drop shops’ or consignment stores in the UK looked like a good business opportunity, as few existed in the UK – being far behind the US timeline – and Richard opened a drop shop in London, with reception staff and a pool of staff with particular knowledges about fashion and antiques. eBay drop shops or consignment stores are where people drop off items which are sold on their behalf for a fee. Items have to be worth at least £30 to be accepted at his drop shop. Their fee structure is variable, and you pay more for a ten day listing with a reserve price. They charge £5 per auction listing and 33% for items selling up to £100. Richard sees drop shops as convenience selling for people who © 2006, University of Essex Page 16 of 46
  • 17. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community are ‘time poor.’ They also believe they can get a better price for items because of their selling knowledge and high feedback profile. He also believes that buyers will regard them as a ‘trusted third party’ because of their prior reputation and refunds policy. Richard is looking to get a lot of repeat business from the people who drop off items to the shop. They are particularly interested in selling high value items, such as mobile phones, designer clothes and antiques rather than house clearance items. He believes having the right systems in place is the key to the business. 2.1.10 Donald Donald also had an interest in eBay drop shops or consignment stores from a venture capitalist perspective. He thought eBay selling was overly complex with a lot of effort involved, and that other people might find it so, too – like Richard, Donald’s drop shops are also conceived of in terms of convenience and less hassle. He thought of eBay as a good processing business which would benefit from software automation. He bought a company which had developed some bespoke software systems for selling on eBay, and says it may be necessary to sell a million items to make money from drop shops. Donald believes that the eBay drop shop industry can work with only a few players to be successful, and has bought other drop shops to consolidate the business’s position. They now have eight London stores and also sell for Barnados, having drop off points there. He prefers people to bring in: “items with a high value that are small, and are commoditised, easy to describe, and very little testing needs”. There is no minimum value, but it costs £10 per item to be listed. The person taking in the item gets two thirds of the sale price for items over £30. He also believes that they attract higher prices for items – with a Titanium Power Seller rating, and a good description written by someone knowledgeable in that area. Donald also has a pool of specialists to draw on, including some full- time fashion experts, and has loyal, repeat users of the service. Donald’s philosophy is slightly different to Richard’s – they will take house clearance items if it is believed they are worth selling, with the shop taking £10 plus commission. He believes being an eBay drop shop is a complex business because of returns, eBay listing violations, breakages in the post, items not received and PayPal disputes. 2.2 Reasons for choosing eBay as a source of self employment There was a great variety of reasons cited by respondents for choosing eBay as a source of most of their earned income. At the outset, it was envisaged that the factors involved were likely to be: difficulty finding work in certain geographical areas such as remote or disadvantaged communities, the need for flexible working due to childcare or caring responsibilities, a source of employment for older workers who may have difficulty finding work in the formal labour market and similarly as source of employment for the differently- abled. Some of the eBay sellers fit these profiles, but often there reasons for choosing eBay for their waged employment were multi-faceted, and involved unanticipated reasons in combination with these. One of the most striking reasons for being a self employed eBayer was dissatisfaction and frustration with an existing job in formal sector employment, or the limitations of formal sector in supplying the desired job in a particular geographic location. In Miles and Davidson’s (2005a; 2005b) terms, they are a combination of income seekers and business seekers. Valerie, a jewellery seller on eBay, gave up her job at the building society: “I was bored with the Building Society, and I could never sell accounts, and like long term investments and things like that, but I seemed to be able to sell jewellery.” eBay gave Valerie an outlet for frustration, and she was able to pursue her interest in jewellery, rather than having to earn her living from something that she considered boring. Doing eBay ran along with working at the building society for some time, before she decided to give it up completely to allow more time for sourcing stock. Another partner of a self employed eBay seller was also contemplating giving up a well-paid and professional job in a council to be an eBay trader, after selling successfully for charity: Well, you know, funnily enough, I’m really seriously contemplating it at the moment because my work is er, there’s a lot of change and I’m getting to the stage where I’m not really enjoying my full-time job so much. […]I’m really quite tempted to set up a proper business on eBay, get it running in the next year and then perhaps either being able to go part-time or to give it up altogether. […] And I’m thinking about doing jewellery design. […] Doing © 2006, University of Essex Page 17 of 46
  • 18. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community something completely different I know. […]And if I did that I would probably have a shop. […] Because I would be selling unique one off pieces of jewellery. (Helen, partner of self employed eBayer) This is a response to not enjoying her existing job and the wish to do something completely different. Interestingly, both Valerie and Helen assessed the viability of eBay employment before committing to it by selling on eBay for a while first (cf. Miles and Davies 2005b) – Valerie on her own behalf and Helen for her partner. Helen’s partner was made redundant and did not want to return to what he was doing for another employer: Er, I mean, we had a little bit of knowledge and I think what we had was a bit of luck in coming across a few things in car boot sales and charity shops that we bought cheaply and managed to sell for, or I’d managed to sell privately, you know, on my [charity account] for quite a bit of money, and we thought ‘Oh well, hang on’, my husband was made unexpectedly redundant out of the blue, er, and he said ‘I don’t really want, I’m not enjoying what I’m doing’ er, and I said ‘Well why don’t we give it a go and see if we can make this a business and learn as we go on really.’ (Helen, partner of self employed eBayer) He regarded his previous employment as mundane and boring. Alan, another full-time eBay seller, had trained as a textile designer, but wasn’t able to do what he’d been trained in until eBay came along: Because I’m a textile designer. But I couldn’t actually, you know, get into textiles. And I thought: ‘Oh well, why shouldn’t I sell other people’s textiles. […] And I thought: ‘Well, as I am a textile designer and I understand how that works, I’ll have a go at that.’ And that took off really. (Alan, self employed eBayer) For others, eBay seemed to be the right solution at the right time. For Sid, a trader in mechanical antiques, eBay came along at the right time – when he lost his stall in a building on Portobello Road, and could not get another one. Tamsin, a vintage clothing seller, had her mum’s clothing collection to sell, but needed a bigger geographic market than her town in South West England to do so. She also couldn’t drive, so eBay provided a home-based solution. Patrick, a university student, sold CDs and his parents unwanted household items. eBay could fit in with his studies. They are all income-seekers in Miles and Davidson’s terms. Being able to sell via eBay from anywhere, and flexibly, to a world market, makes it an appropriate solution when ‘going out’ to work for certain hours isn’t possible. eBay’s flexibility also proved ideal for fitting it around childcare, and it is seen as providing a better work/life balance for both partners (cf. Miles and Davidson, 2005a) – part of balance-seeking. The partner selling on eBay who is home based can do the school run and look after the children if they are ill, whilst also doing the informal labour of the house: It’s a better work/life balance really, so er, yes he does enjoy it […]. He does, because we’ve got two children, one at nursery and another one at school, he can do the school run, if one’s of them is ill he can look after them. If one goes to the dentist he can go there, all the sorts of things that I don’t have to worry about now (laughs) it just makes my life a lot more easier. […] And he also does the cooking and the cleaning and the washing and all that sort of thing as well (laughs). (Helen, partner of self employed eBayer) However, being an eBay seller was mostly motivated by income-seeking on this occasion, as Greg had been made redundant. eBay also has enough flexibility to fit around very part-time forms of employment. Two of the participants interviewed in the study had part-time jobs. One, Tamsin, worked at the local Post Office a couple of days a week, which complemented her eBay selling as she could weigh and post items at the same © 2006, University of Essex Page 18 of 46
  • 19. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community time. The other, Greg, had a few nights of evening work to get him out of the house and socialising with adults. Both Richard and Donald, eBay drop shop owners, chose eBay for their employment for business-seeking reasons in Miles and Davidson’s terms – seeing eBay drop shops as an investment opportunity. Many of those participating in the study are business seekers at heart – Valerie, Bill and George have all turned their collecting hobbies and interests into their eBay businesses, which eBay fairly uniquely allows (see Section 2.6). 2.3 Positive elements of eBay self employment Many of the positive elements of eBay self employment have already been covered in the discussion of reasons for choosing eBay self employment, such as flexibility. In Miles and Davidson’s study (2005b) of eBay self-employment, flexibility was cited by the most respondents (68%) as a positive aspect of having an eBay business. However, those interviewed mentioned other positive elements of eBay self employment as part of their experience as eBay traders, if not as the primary reason. Working for yourself rather than an employer was one positive reason cited, which is a common driver for self employment. In Miles and Davidson’s (2005b) study, this was described as ‘autonomy,’ and was cited by 22.5% of their sample as a positive aspect of eBay self employment. Alan, the vintage textiles seller, mentions this: “But I do enjoy it. And it’s a hell of a lot better than working for somebody else and I never enjoyed that. I found that really tough. And there’s only me. And it can be quite frightening because it is only me, and if I don’t sell then I can’t push the trolley round Tesco at the weekend.” This quotation reveals some of the paradoxes of eBay self employment that Amelang (2005) has highlighted. Although Alan values his autonomy from an employer, he also fears being independent because the business, and ultimately being able to buy food at the end of the week, is ultimately reliant on him working and doing well. An unexpected positive element of eBay self employment for those interviewed was the ‘feel good’ factor of getting positive feedback and e-mails from the people the eBay sellers had sold to. Both Valerie, an antique and vintage jewellery seller and Tamsin, a vintage clothing seller, highlighted this as the most positive aspect of eBay selling: Um, the nice comments I get, I did have a very nice e-mail from a man I sold a ring to on Sunday. For them to go to the trouble of not just leaving you feedback, but actually contacting you personally, to say how pleased they are with something, that is one of the nicest things about it. […] (Valerie, antique and vintage jewellery seller) …it is satisfying to give a good service to people and to have that personal, receive really nice messages from people that the stuff goes to a good home, but that’s because it’s my mums’ collection and I love it rather than because I love selling, but yeah. […] Er, the best thing about being a trader is getting to, is the people and getting some really, really nice and er, and friendly, and kind of er, the satisfaction of.. of the whole process of sending it out and getting feedback, and having a nice close sort of transaction. That’s the best bit. (Tamsin, vintage clothing seller) Selling almost becomes an ‘altruistic’ act. Although money has changed hands, both Valerie and Tamsin are very concerned about making their buyers happy with the items and with their good customer service. An element of having a positive social interaction is also there, and Valerie, the antique and vintage jewellery seller also mentions the meaning of repeat buyers to her: And I have got quite a few regular buyers who do come back again, or they’ve added me to their favourites, and one girl, she’s not bought anything for a while but she would only by jewellery from me, she would only bid on my stuff, and I sold her one or two items, and I always check out what their bids are, and she’s only buying from me, it © 2006, University of Essex Page 19 of 46
  • 20. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community looks like she’s shill bidding, but no, she’s happy with her purchase, she trusts me, so why look anywhere else? You know? Unless, on some occasions I haven’t got what she wants and she’ll go somewhere else to buy jewellery. This is what makes the whole job, so to speak, worthwhile, is that you get repeat customers that do come back, if they’re looking at jewellery in particular, they will just look at your site first to see if you’ve got anything. Repeat buying is almost presented here as a form of patronage or an honour, and the usual fleeting engagements of eBay in some instances become more long-lasting. For Valerie, positive feedbacks and e- mail messages are what makes everything worthwhile. Her eBay experience diary which took the form of a Blog, features much of this ‘altruistic’ selling – hoping to make people happy: …still the chap who wanted my Art Deco diamond ring for an engagement ring for his girlfriend won it, I do hope she's pleased and at least I may have made someone happy, I will soon know if they leave me positve feedback tomorrow.which makes it all worthwhile sometimes. (Valerie, blog, July 18th 2005) However, although eBay sellers get pleasure from making their customers happy, they also expect a degree of reciprocation, in the form of more bidders for their items: It was nice to hear from the chap who bought the art deco diamond engagement ring for is girlfriend, he's not left feedback yet , but he did email me to say he was very pleased and the ring was awesome, so at least I have made someone happy, I just wish someone would make me happy and place a bid , never mind there is always tomorrow, as Scarlett once said, tomorrow is another day. (Valerie, blog, July 19th 2005) But for Val, receiving positive feedback is a way for her to get through the more negative aspects of the eBay selling experience, such as having an erratic income and some customers who want refunds: I was feeling rather down about it all this morning, is it all worth it , should I start looking for another job , and looking at my auction that ends Sunday evening I am giving it away anyway, one can not live on fresh air, and with the bids I have at the moment I am loosing money on every item, I must keep money in my paypal account this week for the refund of the ring, so that won't be much money being transfered to my back account this week. and then I received this feedback, from the lady who never leaves any I am very pleased , accurate description and exceeded my expectations. Delighted and that makes it all worthwhile , to know I have made someone very happy with their purchase , when I think about it, 99% of my customers are pleased it's is the minority that aren't , and how does the saying go " You can please some of the people some of the time , but you can't please everybody all of the time. (Valerie, blog, August 6th 2005) Positive feedback and comments motivate her to continue as an eBay seller. 2.4 Negative elements of eBay self employment Although eBay has offered self employment opportunities with few barriers to entry (Miles and Davidson, 2005a; Amelang, 2005), which have benefited income seekers, business seekers and balance seekers (Miles and Davidson, 2005a; 2005b), respondents in our study reported a number of negative elements associated with eBay self employment. Some of these were common to all forms of self employment. Many eBay sellers report having an erratic income. This was also an issue for 32% of Miles and Davidson’s sample (2005b). Greg, the china seller, finds this difficult compared to the fixed income received when having an employer: © 2006, University of Essex Page 20 of 46
  • 21. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community I think the other thing he’s missed more than anything is really is the sort of guaranteed income, it is a bit up and down, a bit hit and miss at times […] So, yeah. That’s a difficult thing not always knowing how much money you’ve got in you bank account at a certain time. (Helen, partner of self employed eBayer) This is partly the nature of self employment. However, the nature of eBay tends to exacerbate the problems of erratic income. Most people are now paying by PayPal, which creates cash flow problems for eBay traders with a seven day delay before cash is in people’s bank accounts: …money is a bit tight at the moment - because of last week! last week was an all time low week - revenue wise - and with everyone nowadays paying via paypal - i have to wait a week before the money i've transferred, shows up in my bank account. paypal is a pretty good idea but is incredibly slow - so if i have a bad week followed by a good week i have trouble covering the postage because all the money from the bad week has gone and all the money from the good week is a week behind - because paypal takes a week to transfer. (Alan, vintage textile seller, blog, 13th August 2005) In addition, eBay itself has seasonality in its business, which contributes to erratic incomes. While some items sell better at Christmas, there is often a degree of substitution of spending between non-gift and gift items. The summer holidays are also perceived as problematic, as people are away on holiday and unable to bid: It's Sunday and another auction has just ended , and another bad night, the summertime is dreadful on ebay, I do not know how other sellers are finding it, most of my items sold for a lot less then I was hoping for, at least two of my reserve items met their reserve , so that helped I suppose , I don't know where all the regular bidders are , they must be on their summer holidays , and I will say those that bought from me tonight got some good bargains , no wonder people keep turning to ebay for goods, they must think it is wonderful to get it so cheap. (Val, antique and vintage jewellery seller, 7th August 2005) Some eBay sellers also recognise the increased competition they face from a year ago, as also reported in Miles and Davidson (2005a). Much of this increased competition in the second-hand sectors of eBay studied in our research appears to come from relying on one’s cultural capital (knowledge and taste) to choose which commodities to sell on eBay, rather than having a unique item you have created yourself. The subtle and often ambiguous distinctions on eBay between ‘original’ and reproduction, often denoted by the use of the word ‘style’ if at all, also creates easy entry to the market. Val, the antique and vintage jewellery seller has seen her profits decrease, and she believes she can only compete through price or having very unique items: Whereas I was one of the main ones a year ago, because there was only a couple of pages - there is about 19 pages I suppose of antique and vintage jewellery - you look at it now and there’s about 50-odd. Of the fine, not the rubbish stuff that goes on, there’s about 50-odd pages. So for that person to find you, you know, and really want it - it’s going to be hard for any of us. We’re all squeezed into this little, where everyone’s trying to compete with each other, and unless you can really sell at rock bottom prices, which we can’t, all of us, it’s not going to sell, it’s either got to be something really unique, or really, really cheap. She perceives there to be an ‘eBay downturn,’ but isn’t sure while it is happening. She has seen many jewellery items not reaching their reserve prices. eBay’s new strategy of asking sellers to reduce their reserve prices, has also contributed to her perception that there is a downturn, and that eBay also © 2006, University of Essex Page 21 of 46
  • 22. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community recognises it. eBay sellers like Val are being squeezed on a number of sides. Increased competition means profit margins are being cut, while other expenses are static or rising such as eBay fees, travelling and packaging. Meanwhile, it is more difficult to find a good supply of second hand items at cheap prices, and some sellers are selling reproduction pieces as ‘originals’. Val continues to sell ‘originals,’ but this is more costly in terms of travel costs and item costs – selling repro as original is unfair competition. Val is buying from physical auctions but is finding that once commission charges are added, that she is nearly paying retail prices: It has been a year this week since I gave up working part time to work full time on ebay, and sometimes I do wonder if it was worth it , I seem to be taking less money each week then I did then, and I am listing more stock now then a year ago, I am finding it really hard to find jewellery cheap enough to sell on ebay for some sort of profit when I look at what I spend on ebay fees for listing , paypal charges for excepting online payment , and all the extras like wrapping materials and travel expenses , I seem to be worse off now then I did then, in other words working for nothing , I am only just keeping my head above water I can't see me hitting that million pound a year turnover , like one member mentioned last Christmas. The trouble is bidders still seem to think jewellery selling on ebay is as cheap now has it was 2 years ago when I first started selling and it's not, all the auction houses I attend to buy stock are nearly as dear as buying retail when you add on the auction house commission, I don't know how any of the other jewellery sellers are finding it, but I am finding it hard going at the moment. (Val, antique and vintage jewellery seller, blog, 3rd August 2005) Alan, the vintage textiles seller, is also having problems finding a reliable supply of second-hand items to sell, and this is a very problematic issue for eBay sellers who have not been trading for years and built up an extensive social network of suppliers like George the radio/ audio seller or Sid who deals in mechanical antiques. Those with a highly diversified pattern of selling or those selling new goods, such as the eBay drop shops, do not have such problems of supply. Alan additionally recognises increased competition on eBay in his field – but sees this largely as unfair competition. Miles and Davidson (2005a) talk about the equalising aspects of eBay because aspects of social differentiation aren’t visible on the Internet with a self-created user name. However, Alan does not believe eBay is equal for sellers – because some people do not have to earn their entire income from eBay, and therefore undercut other members on price: But there are a group of us, we’re fighting it out for what limited supplies are left, and I don’t know where we’re going to go from there, but I do remember, coming from [SW England], any sort of work that you want to sell, there are loads of people down here who are doing it part-time, or, you know, they’ve got like some stock broker husband, and so they don’t need to work, and they’re selling stuff, and they’re selling them dirt cheap. And you can’t compete with that if you want to make a living. And it’s a bit like that in a way. There are people out there who are selling fabric dirt cheap, and you think: ‘you can’t sell it for that, because the rest of us can’t make a living.’ So, you know. You can’t stop people - you think, if they’re doing that, I’ve got to have some kind of edge or angle to make up for it. (Alan, textile seller, interview). Val, the antique and vintage jewellery seller also suspects unfair competition on eBay from shill bidding. Shill bidding is where an eBay seller uses an alternative eBay identity or uses friends and family with eBay accounts to increase the price of an item. eBay picks up on shill bidding which occurs from accounts registered from the same address, but cannot identify friends and family bidding from different addresses. Shill bidding gives some eBay sellers much higher profit margins, as genuine bidders are pushed up to the limit of the price they are prepared to pay. Shill bidding is often difficult to prove, and eBay sellers are often reluctant to report it because of the implications for themselves. Although those who report shill bidding © 2006, University of Essex Page 22 of 46
  • 23. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community remain anonymous, according to eBay, eBay sellers fear their details being revealed and real world repercussions caused by another seller losing their eBay business. Earning an erratic income on eBay is also revealed to be a product of buyers delaying their payments. This is said to be particularly bad during the summer holiday period, when they are trying to fit their bidding and payment around their holiday period. Alan, the vintage textile seller, sees this as part of people’s perceptions of eBay – they see it as some amateurish venue for second hand exchange – like a jumble sale – rather than as a place where people earn their living: …this is an interesting time to be a seller on ebay. it's summer and time for everyones holidays so people are asking me if i can send items after a certain date because they are going on holiday - or, can i pay when i come back from my hols etc. i am also having to chase people up about non-payment - which i hate - only to find that they forgot that they owed me money as they were on holiday. so what that really means is that some customers don't feel the need to pay me promptly, even though they have agreed to buy the item. i have done all sorts of things to try to stop late payers - i have told them that they have to pay within 2 weeks or i will report them as a non-payer - i have pleaded and threatened - but some people don't see the rush. i think to some people ebay seems to be nothing more than some sort of jumble sale - not realising that to a lot of sellers this is their business. (Alan, vintage textile seller, blog, 2nd August 2005) Alan also felt at the mercy of customer ‘whims’ which were difficult to anticipate, and which often required him to spin his item descriptions in certain ways: “Well, the scary thing is, I suppose, is that you’re at the mercy of customers, and the whims of customers, and that is the scary thing about that. You know, being a trader, you can’t make people buy from you. You’re constantly trying to angle things, and slip things into your shop to see if they sell, and if they do, fine.” Rather than putting him in control, eBay selling appears to make Alan feel at the mercy of others – particularly customers and their erratic demand, but also eBay itself. Working from home rather than experiencing the sociality of a geographically distant workplace is also seen as a negative aspect of eBay self employment. One eBay seller, Greg, as we have already see, works part- time some evenings so that he can get out of the house and socialise with adults. Alan, the vintage textile seller, also feels the social isolation of working at home: Yes, yes. Yes, yes. I quite enjoy it. The only thing is, of course, you’re stuck at home for most of the day or you’re at the post office or hunting around for stuff, and you may not see anybody. Um, all day. And your partner coming home in the evening and saying: ‘They did this and they did this and what did you do?’ ‘Oh, nothing much.’ You know. I put the washing on. (Alan, vintage textile seller) However, one eBay seller, Val uses the eBay community boards to muster up ‘virtual’ work colleagues who she could talk about her problems with: That was nice, and I joined the cat love one because I had another problem with my cat, another cat, obviously people contributed to that because I was worried she was left at the vet, that’s the one I told you about was left at the vet, it was nice to feel there were people out there to comfort you. You know when you do a day-to-day job, you go into work, you have a chat with people, your work colleagues. Well, of course, working from home you haven’t got that, so to think that there are other people sat at their computers with such boring lives [laughter] that they’ll put on these pages, their day to day problems or their successes and things like that, you feel there’s somebody else there you can talk to, because you’re sat in a room, in your own house. So I do contribute. © 2006, University of Essex Page 23 of 46
  • 24. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community (Val, antique and vintage jewellery seller) As with the ‘feel good’ factor of positive feedback and e-mails, there is also the ‘feel bad’ factor associated with eBay. This takes the form of negative feedback, which some sellers take very badly – as with Val who recently received her first negative after 1000 positives: I’ve just had my first negative as well. […] And mum said: ‘is it worth all the hassle?’ And sometimes things aren’t going so well on eBay at the moment, I’m thinking of starting up my own website, and selling. […] Do you know, when I got the negative yesterday, or the day, I was quite upset, there was a big red flashing light at the top of the page. It also takes the form of receiving ‘nasty’ and angry e-mails demanding refunds, as well as when items don’t sell for what the seller thinks they’re worth. Another negative aspect of eBay self employment is related to status. As Miles and Davidson (2005a and 2005b) state, eBay sellers are seen just as ‘market traders’ by wholesalers, and friends and family are no more charitable, not seeing eBay as a ‘proper job.’ Alan, the vintage textile seller, also reports this poor status amongst his family and also in some aspects of recent media reportage, where eBay sellers were criticised for selling charity tickets to Live8 concerts: i know that my partners father makes sneering remarks about my 'rag and bone' business, while bob geldof seemed to see ebay as some sort of group of dodgy sellers doing anything to make a buck. (Alan, vintage textile seller, blog, 2nd August 2005) As Miles and Davidson (2005a) reports, eBay themselves are not held in high regard by eBay sellers, because of high fees and the level of customer support. One eBay seller, another dealing in the antique and vintage jewellery category but who did not complete an experience diary, mentioned that she had paid over £35,000 in eBay fees in one year – enough to rent a shop in a prestigious location – but felt she hadn’t got much back from eBay for her money. Val, the other antique and vintage jewellery seller felt pressure to ‘go at the top of the page’ – to use the expensive featured listings which are given prominence at the top of the page - because she was trying to compete with the main sellers in her category, and maintain a position of prominence amongst buyers. However she found she could not afford to keep doing this, because of her profit margins: They go at the top of the page, you see, they highlight it, and they go at the top of the page, and I will on a few items. It’s so expensive to go at the top of the page. I listed a ring with a reserve of £165, which wasn’t a lot, it wasn’t a lot more than I paid, to be honest, but to list it at the top of the page with extra pictures is going to cost £17, and when you take the cost of the final fees, I’m not getting anything back. I’ve changed my mind to not go to the top of the page because I’m thinking: ‘I can’t afford - I don’t put that much profit on it.’ (Val, antique and vintage jewellery seller, interview) eBay fees could soon add up if you wanted to have a prominent position in the listings and not be lost in the 50+ pages of antique and vintage jewellery which had dramatically increased in a year from 19 pages. eBay sellers’ main concern in terms of eBay customer service was the lack of a customer service line available to all, not just higher order (silver, gold or titanium) Power Sellers. Power Sellers are eBay sellers who have reached a turnover of £750 a month for three consecutive months and have a feedback rating of more than 98%. eBay sellers would like a phone line to ring when there are problems, such as system problems, which may not be acknowledged immediately by eBay: © 2006, University of Essex Page 24 of 46
  • 25. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community But eBay - you’ll get the main people, the management from eBay saying their customers have said they don’t want a phone line. And you go: ‘oh come on! Who did you ask?’ You just need some help sometimes. They need to be quicker off the mark explaining for instance why there’s a problem, rather than leaving us all for say a couple of days, and then saying there’s a problem. […] No, I don’t think - I think it should be available to anyone to be honest. I mean I do understand eBay would be inundated by phone calls all day, I understand that’s the problem, but they need to sort something out, some sort of correspondence. (Alan, vintage textiles seller, interview). Alan also felt that eBay did not really care strongly about what happened on the site, until it was picked up by the media. He likened it to them hiring the hall and letting the traders do what they want. Val also felt that eBay would let certain eBay traders off more lightly – that if they were big revenue generators for eBay that they would be let off more lightly for violations such as shill bidding. In addition, Alan felt at the mercy of eBay, and was concerned in case the site crashed for a period if time – depriving him of income or meaning his items attracted fewer bids. He had also been unable to trade for two months while eBay had software problems accepting debit cards. Following Amelang (2005), eBay self employment also had paradoxical elements in terms of flexibility and time management. Although some of the self employed eBayers in the study benefited from time flexibility, such as Greg and Helen who could better arrange childcare, taking the children to the dentist or having someone at home to look after them when they were ill, for others, eBay is a 24/7 bind. It can interfere with taking holidays, and some Power Sellers were concerned about losing their Power Seller status as their turnover would be nil while they were on holiday. Although eBay has put some measures in place to compensate for this, Power Sellers are still reluctant to take holidays. eBay can interfere with sellers’ social lives because some things have to be done at a certain time to get the best prices – such as listing for seven days on a Sunday after 7pm, in order to finish at the same time the following week and get a peak audience. Alan, the vintage textiles seller also wanted to give quick responses to questions and post immediately – so as to give a professional impression and so as not to shatter customer expectations: Yes, yes. I’ve become quite a little capitalist, I think. Which is odd, but there you go. And yeah. I don’t know, it’s hard work as well. And it’s like, um, oh, you know, if somebody says: ‘do you want to go somewhere.’ ‘Oh no [Alan] can’t because he’s got his listing night.’ Or, you know, ‘he’s got to do this or that.’ It doesn’t stop. Like my partner comes home, you know, when she’s finished college and that’s it, she’s finished college. I haven’t, you know, I’ve still got to do stuff. And I don’t have holidays, and paranoid if I have to go to Scotland for Christmas, because then I’ve still got my listings going and my partner’s family, well her parents don’t have a computer so I have to go to the library and log on. You know, to keep… It’s because, you know, people send you messages and stuff like that and send you messages - and I always think I need to answer then straight away because that’s a good businessman, you know, and I don’t like keeping people waiting. And I get terrible about postage as well because a lot of people know I post next day, and if I can’t post next day I get all, you know, paranoid and think people are going to e-mail me and start screaming and shouting, but they don’t, but I don’t know. (Alan, vintage textile seller, interview) 2.5 eBay self employment and start up help The self employed eBayers in the study were asked about start up help – if they had received any, if they would want any and what would be beneficial. As the Cobweb Information ‘eBay Trader’ sheet mentions (Cobweb Information, 2004) – a sheet supplied as part of business information profiles for business support organisations to purchase and then give out free to their clients – eBay traders need a reliable computer, a good digital camera and a Broadband connection as part of their main start-up costs. It is also recommended that they have bookkeeping and IT training, with business experience in consumer law and marketing also being of assistance. Being an eBay seller had very few barriers to entry for most of those interviewed (cf. Miles and Davidson, 2005a; Amelang, 2005) as most people already had a computer. Some © 2006, University of Essex Page 25 of 46
  • 26. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community upgraded their digital cameras, and these were often bought as a gift by a family member for birthday or Christmas. Broadband connections also tended to follow selling regularly on eBay, because of the need for a reliable, fast, always on connection when uploading item descriptions and answering questions about items. However, some of the eBay sellers, such as Tamsin the vintage clothing seller, were struggling with an ancient computer which made her listing and photo editing slow, even though she had a Broadband connection. She couldn’t afford to take money out of the business to buy a new computer. Grants for equipment would also be vital to those using eBay for income-seeking, for instance after a period of unemployment (see PRIME, N.D.). This reflects Leadbeater and Oakley’s (1999) findings that self-employed cultural entrepreneurs would often benefit from small sums of money when starting up to buy computers. Some participants believed that grants to buy a computer, scanner or have a Broadband connection would help at the outset, particularly for under 25s trying to break into eBay selling, but this did not appear to have been a barrier to entry for any of the sellers in the study, with many upgrading equipment as they went along and earned money. Some eBay sellers were strongly against any type of help, because of the type of people they are. They have chosen to be self employed eBay traders, which already denotes them as wanting independence from a boss and surveillance (cf. Leadbeater and Oakley, 1999): I think a lot of eBay traders as well seem fiercely independent and they don’t want help, or don’t want interference from people. It’s a bit like a car boot sale I suppose. I’m not saying everyone at car boots is shifty but, um, you know, it’s all cash in hand and nobody likes being monitored. (Alan, vintage textile seller, interview). One eBay drop shop owner, Donald, seems to embody this prediction, and has a Hayek-style view of government help: “…personally I’m a libertarian so I believe governments should stay out of it as much as possible.” Others, such as the second drop shop owner, Rich, were disappointed with what was on offer. He felt that the level of expertise was not there for helping him start his type of business, because local authorities were not sufficiently well-funded to attract people who could give the quality of advice he needed. This also reflects Leadbeater and Oakley’s findings that self-employed cultural entrepreneurs could not get the advice they needed from the likes of Business Links’ schemes, since they were tailored to mainstream businesses who had little knowledge of their own industry. Rich also could not get grants towards web design, marketing or the technology they required. Bookkeeping skills and learning about self employment and tax issues was seen as important, and one seller in the sample, Helen, had been on a course about bookkeeping and the paperwork associated with self employment. Helen, herself, understood some of the key issues about self employment and start up help, because this formed part of her own formal sector employment. Some of the others in the sample had been self-employed for years, so this aspect of bookkeeping and paperwork was not a problem – they had merely taken an existing business online. Helen believed that there was scope in offering courses on how to photograph items well and describe them appropriately for eBay, and that these could be offered by the Prince’s Trust or similar organisation, to help younger eBayers start up. However, she was concerned that such courses would lead to an increase in the number of eBay sellers, which ultimately might create increased competition for her or her partner, and everyone else. Tamsin, the vintage clothing seller, identified the strongest unmet need in terms of training – the need to be able to do professional looking website design and learn HTML: Yeah, [the market is a] lot bigger and there’s lot more links and funky website type listings as well. […] Which I do feel kind of harshly about, well not harshly about but I wish I had those kinds of skills, because I do feel it makes it easier if you’ve got a link that says look at my other items rather than them having to find it on the eBay page. She sees her competitors improving their website design, and feels bad that she cannot keep up in terms of directing customers to the right places or having better designed listing pages. However, Tamsin also highlighted another problem for eBay sellers. Those who treated their eBay selling as a ‘hobby business’ were less aware of business practices or what local business development agencies could offer them – and coped day-to-day without thinking of eBay selling as a ‘proper’ job which would benefit from training. It was © 2006, University of Essex Page 26 of 46
  • 27. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community also difficult for them to then turn a ‘hobby business’ into a more ‘professional’ business, as they believed they would not be taken seriously: T: But I don’t know that it’s owed to me but then I don’t really much about the agencies. […] A lot of the people we get in the post office that sell on eBay tend to be a bit like that as well. RE: Yeah T: You know, they’re not, they’re particularly er.. not community development but they don’t really, they’re not really aware of business practice and things like that. RE: Yeah, so a bit more of a hobby business than a.. T: Yeah, I think a lot of people see it that way, which is why again it’s really hard to get people to take you seriously when you want to actually make a go of it kind of thing, and you do have to spend the money on the website, the look of it, like so yes, in that sense they could give me a lot of help, you know (Tamsin, vintage clothing seller). eBay sellers are very heterogeneous in terms of their pre-existing level of business experience, what they are selling (including new versus second-hand goods) and their reasons for choosing eBay as their employment. It is difficult to produce generic training for eBay sellers, but some combination of a self employment bookkeeping, paperwork and tax course, coupled with HTML and web design tailored for eBay shops and item descriptions would appear to be beneficial. These courses would need to be flexible enough to help develop people’s skills when they were at different stages of development (cf. Leadbeater and Oakley, 1999). eBay University also offers a day’s training which may help sellers think through their marketing and differentiation from others, although some of this appears geared to promoting services or tools which cost extra – such as featured eBay shops of Selling Manager Pro tools. Start-up grants are helpful for those with minimal start-up capital, such as those using eBay for income-seeking after a period of unemployment, or younger people without savings. But eBay self-employment has some intractable problems. Increased competition amongst eBay sellers makes eBay a harsh and price sensitive environment to compete in, unless you have a monopoly supply or sell unique goods. Selling second-hand items is also difficult (cf. Bunnel and Luecke, 2000) unless you have a very wide network of suppliers, since sources of second-hand items are ‘drying up’ in the longer term as houses are cleared of that stock and collectors hoard. It is perhaps best, as Miles and Davidson state (2005b), to first use as eBay business as a ‘test business.’ eBay businesses could be used to think about product and strategy before also selling elsewhere (multi-channel retailing). eBay businesses can also be done part-time, or run in parallel with full-time businesses, to ascertain their viability. Miles and Davidson (2005a) have noted that the eBay environment is becoming much more competitive than in the previous twelve months, as also witnessed by our study. She noted that 42% of her respondents were using additional selling channels to eBay (multi-channel retailing), so as not to put ‘all their eggs in one basket,’ and having learnt the necessary e-commerce skills. This was also a tendency amongst the respondents of our study. Those who perceived that their competition had increased to the point where there profit margins were cut too fine (interestingly, two vintage and antique jewellery sellers), began to think about starting their own websites where they could sell at a fixed price and without such competition. They also saw this option as a form of disintermediation away from eBay fees. eBay would still provide the gatekeeper to their static websites – choice offerings would be placed on the eBay site to maintain visibility. However, the audience would then be directed towards their own websites, and existing eBay customers would also be sent details of the site. Being an ‘eBay trader’ should perhaps be thought of, in policy terms, as one selling channel amongst many – in order that eBay sellers can diversify into less competitive markets if necessary in order to offset erratic incomes from eBay. Many of the new traders in our study – Tamsin, Alan, Val, Patrick, Helen and Greg – have learned a substantial amount about customer service, advertising, ‘spinning’ their item descriptions, selling ‘virtually’ and the nature of their specific market from starting as an eBay seller. But eBay selling can be marginal as a full-time occupation, and in order to be viable, must run in parallel with other options – such as an existing bricks and mortar business or trade stall, other part-time employment, a list of ‘offline’ customers or an e-commerce website. © 2006, University of Essex Page 27 of 46
  • 28. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 2.6 eBay self employment and threats and opportunities for employment elsewhere Full-time or part-time eBay self-employment has not grown without there being an impact elsewhere in the economy on jobs. Although eBay is, to a certain degree, supplying previously unmet needs which were not well-served before eBay allowed peer-to-peer exchange and a highly searchable catalogue of items, it is also causing substitution effects away from traditional (offline) intermediaries (cf. Chircu and Kaufmann, 2001). Market intermediaries are seen to add costs (middleman margins) which result in higher final prices for products, and the Internet is allowing consumers to leap over these intermediaries (Lee, 1998). BBC1’s The Money Programme’s ‘Money for Old Rope’ (aired 08/02/2005) was clear in pointing the finger at parts of the economy which had suffered as a result of eBay, and commented ‘eBay is sucking the lifeblood out of them.’ Doug Young, an antique dealer on the programme commented: “eBay is definitely gonna be the death of all antique and collectable shops - I believe that sincerely”. Doug has his own shop and his profits have been deteriorating over the past 5 years: “Every year for the last 5 years it’s got worse and worse. I would say between 50- 75%, my turnover has gone down, and I blame that solely on eBay.” His business has become so unprofitable that he has decided to close his shop and sell on eBay. This is termed ‘reintermediation’ by Chircu and Kauffman (2001) – where an intermediary has been pushed out of a profitable niche market and re-establishes themselves by exploiting the capabilities of technology to become an electronic commerce-able intermediary. During our attendance at an eBay University course, we also met an antique fair organiser in the London area, who used a race course as a venue for stallholders. He reported a sharp downturn in the number of stallholders attending, which reflected a poor attendance by the buying public, and he pointed the finger of blame at eBay. He was not able to reintermediate, given the nature of his business. Other authors were concerned about the process in relation to electronic exchanges. Herschlang and Zwick (2002) cite Professor Chet Bowers and his concern that the movement of sales dollars to the web could destroy American City Centres in a way that suburban malls have. We also asked people in our focus groups and individual interviews whether using eBay had stopped or reduced their attendance at other physical events or arenas. While some people are still attending antiques and collectors’ fairs, this tends to be for an enjoyable day out and to see familiar things from your past: “No, partly the reason we go to antiques fairs is not desperately to collect everything, um, every item of Spode. It’s just a question - it’s a day out, and when you kind of get to my age, you actually see things - that you know, like, toys and things you had as a kid…” (eBay focus group 2M). But in the equation of eBay versus antiques or collectors fairs, eBay wins for two principle reasons: price and availability of what people want. Antiques fairs are perceived to be very expensive compared to eBay – to the extent that those who do attend rarely buy: A: I mean, Malvern’s particularly well served for that sort of thing. Erm, we’ve got the Three Counties Showground, which is … it’s sort of a huge site on the outside of town and they have … about six times of year they have very large, sort of, junk sales and antiques fairs, there. Erm, tens-of-thousands of people go to them. Erm, and I go to some of those. […] But I have to say I rarely buy anything [laughs]. RE: Mmm… yeah, you don’t often find what you’re looking for? A: Well, the thing … I always think at these things, people seem to have a very over optimistic price of what they think they’re worth. […] A really scruffy radio, somebody wants fifty-pounds for it, you know, and it’s a joke, really. (Allan, radio collector interview). Antiques fairs are also perceived as hard work compared to eBay to get the items you want. There are greater opportunity costs in searching antiques fairs and other physical events in terms of the time spent and travel costs (cf. Bakos, 1998). Specific items are more available on eBay because of the amount of material circulating through the site over a period of time and its global reach – if you look constantly it is perceived that it will eventually turn up, whereas you may have to attend antiques fairs for your whole life and never find what you are looking for: Um, I think if you’re looking for things, it’s got to be a good thing. Like I’ve said, if you’re looking for something, sooner or later it’s going to turn up on there. Whereas trawling around locally, I don’t know if it’s just worse in © 2006, University of Essex Page 28 of 46
  • 29. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community this area, but things are so hard to find. I’ve just bought, I don’t know if you’ve seen one - one of those tin plate money boxes in the style of a round Ekco. […] I think it’s only the second or third one I’ve ever seen. […] There haven’t been many on there. I think, as far as I’m concerned it’s the third one. It might only be the second. But I managed to buy it. Now, as far as, the way I see things, you know, I could probably go to every antique fair here, probably for the rest of my life, and never find one. I’ve said before - you turn the computer on, and there it is. As long as you’ve got the patience for these things to turn up, they will turn up on there eventually. Whereas, trawling around locally, or even Norfolk and Suffolk, you know - you’re never going to find some of these things. (Brian, radio collector interview) And while radio collectors used to make a special effort to visit junk shops and antique shops to find radios, they now tend to only drop in if they are passing by anyway. Large, national collecting fairs which are subject specific (stamps, radios) are still perceived as worth the effort because of the sense of community there and the amount of material. Dealers who have shop premises or who sell their items at high prices and buy for low prices are not regarded favourably by eBay collectors – indeed, there is a lot of anti-dealer sentiment amongst collectors. The biggest dealers in the stamp world are perceived as pricing themselves too highly: “I think eBay’s doing well, because all the big dealers - Benhams, Internet Stamps […], they want so much now for a cover, that they’ve priced themselves out” (Gordon, stamp and cover collector). Gordon also recounts the bad reputation that some stamp and cover dealers are getting who have their own shops: Because some people who deal with mail order, er, who also sell on eBay. Well, they’re just glorified crooks to me like. Um, and my brother-in-law, he used to collect. But he finished ages ago. We’ve been to big dealers in London with bits of my collection, the good bits. And the prices they’ve offered, you know - I’ve always pretended I didn’t know what they were, which perhaps I shouldn’t have, right? And then they say: ‘Oh yeah, yeah, yeah - these are common. We’d sell them for about three or four pound.’ And I took one collection to a big dealer in London […] He’s got premises in The Strand. And he said, well, when I say he, whoever works for him, sends me the auction catalogue. They have an auction catalogue every two months or something like that. And you’ll see him offering the stuff for auction. One that comes to mind was the police cover - they just did s sort of ordinary police cover signed by David McNay, and they were trying to sell it for £200, and the one I had signed by David McNay, was the official Scotland Yard one, and I took this up as part of the collection, and he said, the chap that was giving the valuation, ‘Oh, he said, ‘we’ve got hundreds of these,’ he said. You know, four, five pound they’re worth. And he’d been such a stupid - he said: ‘We’d buy this collection off you for about £300.’ Well, my brother-in-law went ballistic, and called them all the crooks out, but they’re excuse was: ‘Ah, but we’ve got premises here in The Strand, it costs a lot of money.’ And I honestly think, people like them give the trade a bad name, and perhaps this is why so many people are going to eBay. These London dealers were doing what dealers traditionally do – buying low to sell high. However, Gordon resented the fact that they had lied outright about the value of some of the covers he had. Many collectors regard dealers as ‘the enemy,’ and increasingly they are seen as losing out on business. Instead of accepting these low prices, there is disintermediation away from dealers which eBay facilitates – people are selling off their own collections or that of a relative on eBay themselves, without going through a dealer: …whereas a few years ago you’d have - perhaps somebody would die, and the son or the daughter would come in with the full collection, and they’re going to say: ‘Give us a price for this.’ Um, I think, they start looking at eBay and they think: ‘Oh I’ve got a Douglas Bader, oh I’ll sell that.’ And it looks as if they tend to put the good stuff on eBay… (Gordon, stamp and cover collector interview). © 2006, University of Essex Page 29 of 46
  • 30. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Dealers are of course ‘striking back’ by having an eBay presence of their own and reintermediating. However, eBay now makes it more difficult for them to get their stock because of the open access to the market it provides. Certain sorts of dealers are also suffering, where eBay has opened up the market. One jukebox dealer who used to also import American radios has stopped bringing them over because people now purchase them from eBay and bring them over individually. American radios were difficult to acquire before eBay. One specialist radio dealer fears he will suffer at the hands of eBay, while the house clearance dealer will benefit: J:But the problem with eBay is you know, there is a kind of food chain that there’s always been in er, in you know collectibles hasn’t there, that you get sort of somebody whose aunty has died and they’re clearing the house out, they’ve got a load of stuff and they’ve got to get rid of it, they’re not really interested, er, they get, you know, they ring some bloke up who’ll come round with a transit van and says ‘I’ll give you 50 quid for the whole lot’ and take it away. Obviously now it gets picked over by all and sundry, but it’s basically the same principle, a general dealer will come in buy the whole lot and either it’ll end up in a sale room, a car boot sale, you name it, all kinds of different outlets, where different dealers then who are sort of, you know that guy only maybe pays out 500 quid to buy a house full of stuff, and basically that 500 quid is all his working capital and he wants to get it back as soon as possible, so he’s happy to sell items for 10 and 15, and 20 pounds just to get his money back. OK, if he thinks he’s onto a you know, onto something that’s worth a fortune he’ll hang onto it and try and sell it, but basically he’ll have a lot of items going through his hands, and he’ll just be happy to have a, you know, a fiver profit on each item kind of thing. […] And then somebody else will come along, somebody that knows, you know, ceramics will buy his bits of pottery off him, and say ‘Well that’s well worth 20 quid I can get 50 for that’ and so on. Somebody else will you know, he’ll go and put his radios in a car boot sale and ask 25 quid each and somebody else will come along and recognise that one’s not even worth 25 quid and another one, you know, that you know, round one must be worth more than 25 quid so I’ll buy that, and then they sell it onto another dealer, and they sell it onto another dealer, doubling it’s price each time, and all these people are having a little bite at the cherry aren’t they? […] And then, you know, and somewhere in the chain I buy it and then I sell it to somebody else who maybe a collector, maybe another dealer. […] An then er, you know, and they’ll sell it onto somebody else and eventually it ends up with, you know, Mr, you know, international financier in his loft apartment in, you know, like New York who pays, you know, $10,000 for it after it’s gone though about 20 people’s hands and they’ve all made a few bob out of it along the way. R: Yes. J: The danger is, I think, that in the future when everybody has got Internet access and everybody understands eBay, the danger, er, I can see there is that Billy Smith that clears the houses will just put an item on eBay and say ‘An old radio I don’t know what it is, but it’s got valves sticking out of the top’, you know, 5 quid reserve, and it’ll fetch $10,000 because, you know, like Mr big businessman in Manhattan will be bidding on it. […] And all the other people won’t be getting a look in on the way up. (John, specialist radio dealer) Summing up his reasoning, he believes specialist dealers who sit near the top of the dealer ‘food chain’ will lose out because eBay enables the house clearance dealer to put his or her items on to eBay. It doesn’t necessarily matter that s/he doesn’t know much about an item, like a radio – s/he might find a manufacturer’s label and put it on eBay. It will achieve its market value, and does not need to be sorted through the dealer mechanism to a specialist dealer. People no longer have to look to the specialist dealer for rare sets, they just have to keep looking at eBay. Many dealers are benefiting by selling online through eBay – reaching a wider audience and geographic market than would have been possible previously – such as Sid (mechanical antiques) who had a stall on Portobello Road or George (radio and audio items) who had his customers on the South Coast. However, eBay is detrimental for dealers in terms of reducing their positions as key suppliers of items or ‘gatekeepers’ to certain collectables, if they had that advantage. If you wanted a vintage British radio before eBay, you might have gone to John, the radio dealer or to Tom the jukebox dealer for an American radio. Now eBay enables you to access a whole range of individuals selling these items around the globe. This availability of a wide range of items also means increased price competition for dealers, who can no longer rely on having a local monopoly to charge high prices. © 2006, University of Essex Page 30 of 46
  • 31. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Bailey and Bakos (1997) also suggest that electronic markets are not just leading to disintermediation away from traditional intermediaries, but that there are new roles emerging. These include providing trust and integrity in the market, matching customers and suppliers, aggregating information goods and provide customised marketing data. In terms of trust, this was revealed to be an important intermediation service. The Internet is perceived as an insecure place where it is possible to create fraudulent identities or falsify electronic documents (ibid.). Matching customers and suppliers may also be necessary as consumers are presented with too much information – intermediaries would filter this information to make matching easier. Aggregation would still be a useful service to allow consumers to self-organise and get goods at better prices through placing larger orders or be aggregating intermediaries in terms of information goods – selling a wide range of digital goods such as songs, journal articles or images. They could also customise marketing for a consumer or groups of customers. eBay has created some new intermediaries (see Figure 1), most notably companies which provide additional services such as auction sniping websites which allow consumers to place bids which are ultimately executed in the last seconds of the auction, because bids reveal valuable information - “information revelation” (Matsubara, 2001) - about independent private values (the value of an item to the bidder) and common values (resale values and inherent values – e.g. gold, diamonds) (Wilcox, 2000). Sniping allows the optimal placement of the bid for experienced eBayers (ibid.), and also the convenience of not having to bid at a particular time (when you may not have access to a computer) or having to remember to bid. It is also possible to search eBay through such sniping intermediaries and even buy shipping insurance – the latter is a case where the post office only insures at high cost between the US and ‘foreign’ countries. eBay consignment stores or ‘drop shops’ are another new intermediary which have grown up in response to eBay, as we have seen earlier in this report. They provide a role of a trusted third party on eBay – owners of goods use them because they have good reputations and high feedback scores which help them achieve higher prices for their items. They also allow the better matching of buyers and items for sale – through using knowledgeable people to help construct item descriptions. Two self-employed eBayers known to the authors are also offering a range of eBay solutions – including helping with signing up to PayPal (now a complex process) and providing web design services. Anecdotally, the authors have also heard of small businesses set up to help companies through eBay’s Verified Rights Owner Programme (VeRO). Rights owners can report eBay listings which violate their rights. This may include copyright violations, trademarks, patents, picture theft or misrepresentation of authorised dealer status. eBay listings which violate owners’ rights can then be removed – such as unauthorised music copies. Other new intermediaries in the US have included those specialising in software and independent auction service businesses such as image hosting and auction management software (Bunnel and Lueke, 2000). The authors believe that more new eBay intermediaries are likely to enter the market in the UK, and that the lack of intermediaries at present represents the relative immaturity of the market as compared to the US. Possible eBay intermediaries may include packaging firms who package items which are auctioned by traditional auction houses through the eBay Live! system, someone to research your item and its origins, or perhaps auction catalogue quality picture services for high value antiques. However, some intermediaries are vulnerable to eBay – especially auction snipers who may be ‘frozen out’ of accessing eBay or vulnerable to an eBay-owned sniping service. © 2006, University of Essex Page 31 of 46
  • 32. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Postal re- insurance Delivery VERO Owner Feedback Auction of filters (neg item mgt /neutral) info Picture Sniping eBay eBay software hosting eBay Buyer info info Seller Web Shill bid design detection Set up Payment Figure 1 – New eBay intermediaries As way of explanation, new intermediaries are marked in green. ‘eBay seller’ is marked partially in green, as there may be a divorce between owning the item and being its seller. eBay drop shops or consignment stores act as an intermediary in the role of ‘eBay seller’ – selling items on behalf of their owners. © 2006, University of Essex Page 32 of 46
  • 33. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 3 eBay and consumer issues This section of the report examines consumer issues associated with eBay, which have implications for the policy community. Gregson, Longstaff and Crewe (1997) have discussed the issue of ‘regulation’ in relation to car boot sales, which share similarities with the eBay environment – in terms of being a place of second- hand exchange, where there are risks of buying counterfeit or stolen goods and where ‘trading’ passes as private sales. Regulation is associated with having a right of redress and where consumer rights apply. Gregson and Crewe (1997) discovered that car boot sale participants understand that environment as one where the rules of formal retailing are suspended, but where there are skills and consumer knowledges involved in the exchange process which are involved in understanding risk. While consumer knowledges are important on eBay, both in terms of understanding the risks in buying the item (can it be fixed if it doesn’t work?), there are also consumer knowledges involved in assessing whether the item will arrive at all, and whether it will be as described. eBayers did not feel that they were outside the rules of formal exchange, indeed, the feedback system and eBay buyer protection policy seemed to prompt eBayers to think more about their rights as buyers and liabilities as sellers. The ‘virtual’ nature of eBay selling is likely to change entirely consumer attitudes towards regulation – whilst at a car boot sale you can assess an item in the flesh and take it home there and then, this is not so in the eBay environment. As Shields comments, computer- based media encode ‘reality’, there is also autonomy from the concrete in that digital virtuality is dependent on technology – such as resolution or colour representation. ‘Reality’ may also be forgotten, lost or supplanted with editing or cropping (2003) and some complex eBay frauds use this distinction (see below). Consumer identities and activities can also be traced for longer in virtual worlds. 3.1 Consumer rights and privacy Consumer rights are regarded as a complex issue in regard to eBay by those participating in the study. Not only are they confusing for buyers, who must negotiate eBay’s own two tier buyer protection policies, as well as their legal rights, but also for sellers, who must judge whether buyers have the right to ask for refunds, and work with eBay on buyer protection claims: …it's a sort of vague area - whether buyer or seller has any rights. no one is really sure about the consumer rights of buyers on ebay. i tried to find out from ebay and on the net in general - only to find things a little vague - as i said. some people say that because ebay is an auction/car boot/flea market site - then consumer rights don't apply. while others say that it depends on whether you are selling new or used items. this all tends to lead to problems when a buyer complains about their consumer rights - do they have any? perhaps ebay needs to make it clearer to both buyers and sellers - what their rights are. i know that different laws apply to different countries - but it would make things a lot clearer and people would know where they stand - rather than all the fudging that seems to go on at the moment. (Alan, vintage textile seller, blog, 1st August 2005) The nature of the eBay site itself, who sells there and what is sold creates more ambiguities. Although using eBay is technically Internet shopping, consumer rights are conflated in terms of whether you buy from a private individual or trader, bid as part of an auction or use ‘buy it now’, or buy an item that is new or second-hand. Several government web pages have been set up to try and clarify the situation, including the Office of Fair Trading, Consumer Direct (funded by the DTI) and Warwickshire County Council. If you are buying from a business rather than a private individual, you have more consumer rights. When buying from a private individual, items do not have to be of satisfactory quality, but must be as described in the eBay listing (Office of Fair Trading, N.D.). When buying from a business, items must be of satisfactory quality and fit for purpose (, N.D.). When buying from a business, it does not matter if the items are second- hand or new, they must still be of satisfactory quality. The goods should be free of faults, safe when used correctly and be of the quality that a reasonable person would expect given the description, price and any other relevant circumstances (, N.D.). However, with second-hand goods you should have lower expectations of the performance of the item and also not expect the goods to be of perfect quality (op.cit.). You also have to take into consideration the price paid when deciding if the business trader has to © 2006, University of Essex Page 33 of 46
  • 34. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community put things right with a problem (op.cit.). If you buy new goods from a ‘buy it now’ auction and from a business trader, they come under the Distance Selling Regulations (DSRs) (OFT, N.D.). The Consumer Protection (Distance Selling) Regulations (2000) allow a ‘cooling off’ period of seven days where a buyer can return a purchase or cancel a purchase. However, eBay state that bidding in an auction is binding, and internet auctions do not have to give you your statutory consumer rights (Euroconsumer, N.D.) – although eBay themselves imply that DSR does apply to them, since they are an auction-style selling format rather than a traditional auction which has gone online (eBay, N.D.a). There are difficulties with applying this consumer law to eBay. Often, the buyer is uncertain as to whether they are buying from a private individual or a business. eBay has started to include this information under seller’s user ids. However, for those who registered before this change came into force, there is often no indication of their status. Being a Power Seller or having an eBay store may give an indication, as well as an About Me page. It is recommended that eBay should allow buyers to more easily differentiate business sellers from private individuals in order for them to more clearly know their consumer rights. In addition, eBay has, as part of its item descriptions, a ‘new,’ ‘used’ or ‘--’ differentiation in a drop down box. Which option is chosen by the seller has profound implications for the buyer and seller. As has been seen above, a ‘used’ item is not expected to be in perfect quality, or have the performance of a new item. Items which are ‘New Old Stock’ are particularly difficult to describe in terms of a new/old binary, and often descriptions follow from the implications the label has for the seller’s liability. Some sellers refuse to chose a ‘new’ or ‘used’ label, and therefore ambiguity can be created over whether the item is new or second-hand, which may again defer the seller’s liabilities. It is recommended that buyers and sellers should be better advised as to the implications of the choices presented in this drop down box of new/ used or --. If an item is described as ‘used,’ this also has implications for claiming through eBay’s own buyer protection schemes and the ‘significantly not as described process.’ If an item is described as being in ‘excellent condition’ but is described as ‘used’ in the drop down box – buyers cannot claim for minor damage such as scratches. eBay’s own buyer protection scheme has two levels – the PayPal Buyer Protection Policy – for eligible items paid for when buying by PayPal, and the Standard Purchase Protection Programme – for those items ineligible for PayPal Buyer Protection, excluding those paid for by cash, postal orders or money transmission services like Western Union. The eBay buyer protection schemes offer different levels of coverage – up to £500 for the PayPal scheme and up to £120 (minus a £15 processing fee) for the standard cover. There is also a seller protection scheme offered by PayPal, which protects sellers from unreasonable charge backs by credit card companies. The buyer protection schemes add another level of consumer protection to existing statutory rights, and draws upon existing consumer law – in having to be ‘as described’. However, careful reading of eligibility and what constitutes ‘significantly not as described’ is necessary, where this is in dispute, and this can create more ambiguity. Items are ‘significantly not as described’ if (eBay, 2005): i. “The item is a completely different item to that which was presented by the seller in the listing, e.g. an audio book instead of a printed book, a desktop computer instead of a laptop, a picture of an item instead of the actual item; or an empty box; ii. The condition of the item is significantly different. For example, if the item has clearly been used multiple times rather than 'almost new' or 'still in box' or is obviously repackaged rather than 'mint'; iii. The item is unusable and was not disclosed as such. For example, if there are missing major parts or components, will not function or turn on, or spoiled or past a relevant date. (NOTE: this applies to the item in its received state, no matter what the condition when it was sent.); iv. The item is not authentic and was not disclosed as such. For example, if a fake or pirated item that was advertised as authentic or a completely different or inferior brand of a similar product; or © 2006, University of Essex Page 34 of 46
  • 35. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community v. The item is missing a major portion or quantity. For example, if the buyer ordered 4 dozen golf balls but only received 1 dozen or 4 golf balls or the item is missing a primary component, like a blender missing a top or coffee maker missing the bottom plate.” In particular, what constitutes ‘significantly different’ condition can be highly contentious. To the collector, something described as a flea bite ‘nibble’ which turns out to be a reasonable large chip could affect the valuation of a piece significantly, yet not be deemed ‘significantly different’ to that described. The buyer has to find an ‘expert’ in some cases of ‘significantly not as described,’ to independently verify the condition of the object and the effect of the condition on the value paid – within a specific time period. To some extent, this can help with the interpretation of what is ‘significantly different’ for certain objects. However, finding an expert can be very difficult for highly specialist items, and where it is necessary to see the item in person to judge its authenticity or condition. The buyer protection schemes allow for little time to find an expert. The buyer is also likely to have to pay the expert for his or her judgement. It is recommended that eBay or even an independent body such as the Office of Fair Trading construct a database of ‘experts’ who can be called upon to evaluate ‘significantly not as described’ cases. Many eBay users participating in the study were concerned about their own consumer privacy. eBay has its own privacy policy. But certain criticisms have been levelled at it. Jason Catlett of Junkbusters Corp (Junkbusters, 2003) levels four main criticisms against eBay’s privacy policy: that your email address may be harvested by spammers; that eBay will retain your personal information indefinitely, even if you ask them to delete it; that the company will collect and maintain information about you which it will not be permit you to access; and the company may give your personal information to parties investigating you (such as law enforcement officers or government officials) or litigating against you without a court order and without telling you. eBay’s global nature is also said to compound these problems, as it is said eBay requires users from outside the US to agree to the processing of their personal data below the minimum statutory standards of many countries (Junkbusters, 2003) - such as with the indefinite keeping of personal records. However, user concerns about privacy concerned how eBay disclose personal information in relation to the wider eBay community. eBay’s privacy policy states (eBay N.D.b): (b) eBay Community. Your User ID is displayed throughout the Site and is therefore available to the public. All of your activities on the Site will be identifiable to your User ID. Other people can see your bids, items that you have purchased in the past, your feedback rating and associated comments, your postings on the Site, and so on. Therefore, if you associate your name with your User ID, the people you have revealed your name to will be able to personally identify your eBay activities. The issue of seeing what people had bought and sold through their feedback profile was particularly contentious amongst our participants: L: The only funny thing that it’s fun to do sometimes is to go back and look at what some people have actually bought on eBay by going back through their feedback and clicking on the item, because that can be very amusing. T: I’m not sure that you should be allowed to do that really. A: Sorry? T: It just seems a bit strange, that you can go through. (Focus group 2M) People believed they might be identifiable through what they had bought and sold, and for those people whose user ids were known to friends and family, this could be embarrassing – especially if they were selling unwanted gifts: “I don’t like other people seeing what I’m buying and selling either, because I sell like a present someone’s given to me, but I don’t want them to see that I’m selling it on eBay, because that’s awful” (Focus group 3E). © 2006, University of Essex Page 35 of 46
  • 36. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Looking through people’s feedbacks at the items they had bought and sold was often seen as a source of amusement, and this often happened with friends’ user ids: “Actually it’s quite fun now as I can actually click on my friends’ identities and see what they bought at the car boot sale at the weekend, so it’s quite funny, isn’t it?” (Peter, radio collector). However, people also looked through people’s feedback and the items they had bought and sold in relation to people unknown to them, again mainly for amusement. This sometimes also revealed pictures of their private home spaces (cf. Cartledge, 2005) – taken as part of the background of a photo for an item listing: KS: I tend to … because you can click on people’s feedbacks and you can look at all the items that are in their history. And so I was able to look at all of this junk that this person had … But it was really, really quite… Erm, what was it? A perspex, erm, high heeled shoe phone [laughs]. ALL: [laughs]. KS: There was loads of it. And also because of the way that he’d taken these photographs of these little items, you could see his living room as well. PL: Yeah, I know. You can see quite a lot of people’s, like, living rooms or like they take it on the bed or they ‘re on their desk quite a lot. I tend to just prop mine up against the back of my chair and take it, so you can’t see... (Focus group 2E) Although this seems to involve a quite harmless curiosity into people’s lives, and eBayers enjoy finding out about other people’s identities in terms of the material culture they are buying or selling, it is possible that this ‘bid-stalking’ could turn into something more sinister. If someone wishes to find out another person’s home address on eBay, this can of course be done by completing a transaction with them. It is possible to have private feedback, but this creates a climate of mistrust – other people believe you have something to hide – perhaps very negative evaluations from others: “People have private feedback, as well - I don’t have them bidding on my items. Because I want to see what they’ve got, especially if they’ve got like two negatives. Even if they’ve got fifty positives, I want to know what those two negatives were for. You know, just to find out” (Focus group 2E). There needs to be a careful balance between transparency of feedback, and being able to find out ‘too much’ about a person. Looking at previous feedback can be very instructive – particularly to see what people have sold before, if they have been high value items, and if the transaction was successful. Seeing what people have bought can also be instructive – it can help identify fraud in some instances – such as a case followed during the fieldwork period by the researchers where a Czech glass car mascot was passed off as being by Lalique (the famous glass designer) and previously owned by the seller’s father in the 1930s during a period playing the French rugby team. It was actually bought two weeks previously on eBay by the seller for £50 – with the Lalique 'label' and provenance it reached nearly £1000. However, it is generally less useful to see what people have bought compared to what they have sold, and it is worth reflecting on whether links to items on people’s feedback profiles should disappear faster for what they have bought. Another participant also complained about others being able to see what you are bidding on currently, using eBay’s advanced search facilities – he described this as a “gross invasion of privacy” (Ernie, stamp and cover collector). Another privacy concern that people had related to the eBay toolbar. eBay’s toolbar is ostensibly offered to users so they can differentiate spoof sites which look like eBay from the real thing. However, when users scan for spy ware, the eBay toolbar contained spy ware elements: Yeah it’s billed as anti-spoofing and it won’t do anything. And I saw it - that was on the chatboard as well because I was looking for a... I had a question about selling so I went on it and I typed it in - and, erm, I saw that one of the people had an About Me page and it is all this anti-virus stuff and anti-spy ware. And I downloaded like window- washer or something, and it went through and it was just like this huge amount of like crap and it was all in ... it all had eBay on it - like five-hundred megabytes of stuff and I just thought right, that’s it, eBay toolbar’s gone. (Focus group 2E) Although the eBay toolbar page tries to reassure people that it contains no spy ware in terms of personally identifiable or trackable tags, it does gather data to get an aggregate view of what its users do. If eBay © 2006, University of Essex Page 36 of 46
  • 37. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community wants to help people identify spoof websites and protect their accounts, we believe it needs to remove this tracking element from its toolbar – or face user rejection. This issue was raised during an eBay University question and answer session, and eBay’s response was that they were trying to work with spy ware detection software developers, so that the eBay toolbar would not come up as spy ware. However, user perceptions have already been formed about the eBay toolbar, and ‘masking’ the fact that it is gathering data is unlikely to be a successful strategy. © 2006, University of Essex Page 37 of 46
  • 38. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 3.2 Fraud and consumer protection Fraudulent eBay transactions have had a high profile in the media. These include a 17-year old boy from Gwent who made £45,000 selling non-existent goods, to more complex frauds involving selling artwork which deceives the buyer into thinking it is by a famous artist – such as the case of a painting listed on eBay that appeared to be an original by California artist Richard Diebenkorn (Robinson and Halle, 2002). The eBay seller discussed by Robinson and Halle constructs an air of naivety that allows others to infer he had limited knowledge when, instead, the item was actually a clever fake. The seller provided subtle allusions to Diebenkorn, such as the colour palette of the painting. Essentially, the bidders on the item hoped to take advantage of his supposed “lack of sophistication” to pick up a very valuable item at a bargain price. Shill bidding was also involved and three men were charged with wire fraud. Some sellers have also been deceived into sending goods after receiving money from PayPal which was then reversed after it was revealed the transaction was unauthorised (Rowan, 2005). eBay itself claims just 0.01% of trades are confirmed as fraudulent, yet for low value items there is likely to be underreporting, and some frauds that operate may be dealt with in the item ‘significantly not as described’ process operated by eBay. Fraud may also occur through shill bidding, where sellers use separate user ids to bid up an items price, or use friends and family. Fraud may not only occur through a transaction on eBay, but also if your details are stolen through such routes as ‘phishing’ e-mails which ask for your details and look like they come from PayPal or eBay, which often direct you to a ‘spoof’ website that appears to be eBay, but which has been created to capture the login and password details you put into it. Those in our two year study had experienced many types of fraud. Most had been subject to ‘phishing’ e- mails directing them to spoof sites. One participant had partly stopped using PayPal because of such e-mails, because he couldn’t be sure of what was the ‘real’ PayPal site. Many had seen or experienced more subtle types of fraud in terms of misdescriptions – this would include 1950s radios described as 1930s radios, reproduction jewellery passed off as ‘originals’, signed covers who aren’t signed by those named: But this chap I spoke of earlier, [x], who does the RAF covers. There was a, I’m going back about 18 months ago now, there was a big collection that some dealer had bought, and he was selling them individually on eBay, and he phoned me up and said: ‘Don’t bid against me on this particular one, because Lord Downing had signed it.’ Right? Lord Downing was in charge of fighter command in World War 2. Well, I’m looking at the cover and I thought: ‘I don’t know.’ And when I looked it up, it wasn’t the Lord Downing, it was his son. Because I can’t remember off hand, the cover was 1984, and the original Lord Downing had died back in the ‘70s, and I e-mailed him then, Stephen, and said: ‘Check on the date.’ And he said he could have spent a fortune on that. And he, you know, he said: ‘How did you find that out?’ I said, I went on a different website and found out when did Lord Downing die? And um, well, I don’t know, perhaps I waste my time sometimes. (Gordon, stamp and cover collector interview) Other fraudulent activity involved receiving fake goods – fake covers, fake stamps and a fake mechanical antique – the latter had been concocted to look like it was by a particular, highly sought after manufacturer, by the addition of an ivorine plaque. Some participants reported seeing types of fraud involving issues of ‘representation’ and the ‘virtual’ nature of eBay – such as pages advertising mobile phones - when all they are sent for their money is a web page link to a phone company who will send you a phone if you pay more money and sign a contract. Another example was a man who paid £120 for an Xbox game console and just received an empty box (which was a story that also circulated in the media): But I did see a guy who was selling, you know the new silver X-Box? He sold a box and he described it as such. And that’s all it was, there was nothing on the description. And when the guy paid one-hundred and twenty quid and got this box in the post, he was not very impressed [laughs]. © 2006, University of Essex Page 38 of 46
  • 39. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community This also happened during Christmas 2005 with highly sought after Xbox 360s were misleadingly sold as boxes rather than the consoles (Newsfactor Magazine Online, 2005). Others talked of those defrauded by ‘second chance offers’ when accounts were hijacked and cloned. They had paid through untraceable Western Union accounts. In terms of consumer protection, eBay has its PayPal Purchase Protection Scheme and its Standard Protection scheme, as discussed above. However, credit card companies also offer a layer of protection to the consumer, through credit card chargebacks. Chargebacks can be made when a buyer claims the goods they bought were never received, when the item claims a good is not as described or when it is determined a stolen credit card was used in the transaction. A consumer can ask a credit card company to take back the money from a transaction. The money is then recovered from the seller by PayPal, if PayPal is involved in the transaction. When there is a dispute over a chargeback, the credit card ultimately makes the decision. If certain conditions are met, PayPal will provide evidence to the credit card company and act as a mediator, and are covered up to £3250 of claims a year. However, eBay sellers claim this is worthless in not as described cases, because sellers cannot prove to the contrary (Anon, N.D.). Sellers have to send their items by a trackable posting method to be eligible for seller protection. Law enforcement is the final level of consumer protection open when things go wrong. One person in the study had been arrested for not sending the goods he had sold, because of a mix up with paying in cheques: W: […] But erm, I got about ten cheques in at once and I’m terrible - I’m really bad for dealing with it. And I’d just moved back into Uni, so I paid all of these cheques in at one time. But I forgot - I didn’t write them down. And I didn’t think I’d put this guy’s cheque in. And, erm, I don’t know, in Barclays, if you pay in a block of cheques they goes on as one amount. So, if you’ve got like fifty ???? [262] it goes on as fifty. So I tried to find out off of Barclays, but I needed some of his bank details. He wouldn’t give them to me because he thought I was trying to rip him off. So he phoned up the police and a month later the police arrested me on Mother’s Day [laughs]. ALL: [laughs]. W: I sat in a police cell for five hours… […] and then I was out on bail for six weeks. And then I found out about two weeks ago that the CPS [?] weren’t taking me to court. eBay is likely to be causing considerable pressure on the police's Internet fraud squad, even though it has its own fraud division, and the authors believe that additional measures should be taken to minimise eBay's pressure on police resources, which is ultimately paid by tax payers. Developing additional policies to tackle fraudulent activity on eBay is a difficult area. As mentioned above, the authors believe that eBay should design their toolbar without the addition of data gathering components which appear as spy ware, so that eBayers can tell when they receive an official eBay or PayPal e-mail, and are on the ‘real’ and not spoof websites. Second chance offers should also be more strictly controlled, if goods have already been paid for once. Sellers could also perhaps be reminded that it is illegal to misdescribe items. Finally, it is common for fraudsters to begin selling high value items on eBay in a short space of time, with minimal or no feedback - quickly obtaining a large amount of money before all the parties realise there is something wrong. These fraudsters are both taking advantage of a community of trust, and eBayers feel relatively safe in buying with eBay's standard purchase protection scheme. eBay ‘newbies’ who have not yet learnt the appropriate consumer knowledges to offset their risk (cf. Gregson, Longstaff and Crewe, 1997) are particularly vulnerable. Although eBay is promoted as a market with few barriers to entry, the authors of this report recommend that there should be more barriers to entry before eBayers can sell high value items, in order to prevent the most opportunistic fraudsters who may, for instance, try to take advantage of the Christmas period, by listing a number of expensive items and blaming Christmas for delays in receiving goods. This might involve making eBayers have ten positive feedbacks before they can sell, although it is recognised that this is no barrier to more premeditated fraudsters. © 2006, University of Essex Page 39 of 46
  • 40. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 3.3 Redress: perceptions of eBay as an agent of redress eBay have a key role in getting buyers their money back in cases of fraud – where items are not sent or significantly not as described. They also have a role in getting redress for sellers in circumstances where they are fraudulently subject to chargebacks. However, eBay’s role as an agent of redress is limited by their own exclusions and policies. Paying by PayPal is increasingly the only way to get redress as a buyer and seller – eBay is ‘locking in’ users to paying by PayPal if they want a degree of insurance. eBay are regarded merely as the venue, with sellers being responsible for what they sell. Participants in our study have a poor perceptions of eBay as an agent of redress. This is mainly because there is no telephone line or human to speak to about problems which are often quite subtle: When you think about it, eBay must be incredibly low maintenance. They seem to run it on a shoe string. And to be honest, I mean, when you’ve got a problem or technical problem or something, they only seem to have two people who will answer your questions. On the noticeboards. Then if you want to e-mail them it’s one of those things where you have a roll down things and you’ve got to pick a subject that it corresponds to and every eBayer has got a unique problem, it can’t be settled by about five or six different subjects. Um, and then, you know. I do remember when I had a problem with my financing - when they wouldn’t accept my debit card, and they said they would, and everything was fine, then it was, then it wasn’t. It was really frustrating, you couldn’t actually speak to anyone. And if you try to, maybe two or three days later, they would send you some vague e-mail - but you go: ‘That’s not the problem I have.’ So you have to start all over again. So that’s not good. (Alan, self employed eBayer). eBay are criticised for their responses, which often appear to the participants to be stock responses which are copy and pasted, which do not answer the question posed. One eBay seller, Valerie, reported a new seller for what appeared to be fraudulent activity – he was selling high value Cartier diamond rings which he did not own: V: And he didn’t have a picture in the gallery, it just said ‘Art deco ring.’ He was starting it at a pound, and when I looked at the picture it had [x’s user name] on the picture. I thought, that’s x’s ring, and when I read the description, she still had hers on the auction, the auction for that ring was still running. I thought: ‘he’s even copied her word for word.’ Then I looked at something else he was selling, I thought that’s a [y - eBay user name] picture. Checked out [y] and he’d copied them word for word. So I contacted x, she didn’t come back to me ‘til the following day. I noticed it was still running on the auction. So I thought: ‘I’m contacting eBay.’ I e-mailed eBay’s Power Seller’s site, because you’re supposed to get priority, and I said ‘he’s copied somebody else’s auctions, I think this is a scam, and people are going to get ripped off if you don’t do something.’ And they came back to me and said: ‘My name is Alan I’m dealing with this, we’ve looked at it, we’ve taken the appropriate action.’ They did actually cancel x and y, but they didn’t look into it any further. The following day he listed all this Cartier stuff, and I’m looking at it, thinking to myself: ‘you know you can snatch a picture off of anything on the web, can’t you.’ And I’m thinking: ‘this is what he’s done.’ His descriptions are not as if you were looking at my site or y or x’s which is all exactly the same, the writing style. I’m thinking: ‘he hasn’t got any of that stuff.’ And these people who’s bidding - who’s either him or a friend, because he was bidding on anything and even cancelled or retracted a few bids. And I said to my other half: ‘I’m watching this, because this chap is going to rip people off.’ And I’m blessed, he did. And people were so gullible, and they thought they were getting such a bargain, £5700 for one of the rings. [private conversation] But what gets me is one of the people said it was a false address, another one said it was a false phone number, and yet he registered fine with eBay. They took no precautions whatsoever to check it out [private conversation]. What he also did, it wasn’t just the winning bidder who got the item, he went to the under bidder. R: A second chance offer? V: Yeah. [private conversation] He was selling the same ring a couple of times [private conversation]. He didn’t just make one lot of profit out of that sale, he made a couple. I’m thinking: ‘if that gets to the newspapers, that’s more bad press, and people are still not going to trust eBay anymore, and they let them do it.’ There’s no security when you’re signing up, that you’re living at that address, and you’re telephone number is right. [private conversation]. © 2006, University of Essex Page 40 of 46
  • 41. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community In this extract, eBay are presented as not following up the seller’s activities in listing more items he did not own. Valerie also raises the important point about security – checking that people’s addresses and phone numbers are correct. eBayers would like more verification of the community’s members in order to stop fraudulent activity, and even to stop eBayers de-registering and re-registering with a new ID. This could perhaps be achieved by making everyone register for eBay with a credit card, which would then have to be attached to a billing address and phone number which would need to be verified. At the moment, to our knowledge, people without a web based e-mail address do not have to register a credit card. © 2006, University of Essex Page 41 of 46
  • 42. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community 4 eBay: national electronic markets and online community as a policy tool The IPPR (Institute of Public Policy Research) has been particularly interested in applying eBay features to other areas of the economy. Wingham Rowan (Rowan, 2004) has advocated a system of National Electronic Markets (NEMs), to be provided by the state. Rowan believes that while eBay is held up to be a good example of the dynamism electronic markets have brought to small traders (op. cit.), it only operates in niche areas of the economy such as collectables, used cars, surplus and second hand goods. He argues that what most of us have to sell is our time available for work, or the hire of assets we own. And whilst he acknowledges eBay does have a services section, these are mostly described as ‘get rich quick’ schemes, or list people who may not be qualified or vetted. However, this is not strictly correct. Some services are sold on eBay and appear to flourish through the system. Furniture delivery is a prime example, and these services are advertised within the furniture-related categories rather than separately in ‘services.’ They often list for a nominal fee, and use eBay for visibility and to establish their reputation through the feedback system. Rowan proposes a national electronic market as a public utility. Those providing services (such as car hire) are rated by those using the service – in a similar way to eBay’s feedback system. Investment can also be opened up in NEMs. If there are shortages (e.g. plumbing services), then there would be the possibility of investing in someone to train to be a plumber, and then levy a percentage on each booking of the plumbing after he or she had qualified, or demand a certain return on investment. Those supplying services would need to get certificates validated. Rowan believes the effects of NEMs would be to increase localised transactions amongst the non-corporate sector, as they would be visible when searching the NEM, in a way they currently are not when searching the Internet, vis-à-vis the corporate sector. While NEMs are an interesting concept, they are likely to have some of the problems of the eBay feedback system. People could bribe other people to leave them good feedback, or get someone they know to use their service and rate them favourably. Some people providing services are likely to get a higher number of feedbacks and thus potentially a better reputation because of the nature of what they do – a baby sitter may get more feedbacks than a builder who specialises in extensions which may take 6 months to complete. The feedback also needs to be weighted in terms of the amount spent by the customer. The comments for the baby sitter for £15 worth of work should be less meaningful than those for the builder and £50,000 worth of work. The IPPR has also investigated eBay as part of thinking through if online community is a policy tool (Davies, 2004). As Davies states, eBay has led some policy makers to question whether online reputation systems could be used as a public resource to build trust. Trust is a positive consequence of building social capital (Putnam, 2000). Resnick (2001) has referred to eBay in terms of building ‘sociotechnical capital’ – the “productive combinations of social relations and information and communication technology” (Resnick, 2001: 2/3). Sociotechnical capital is regarded as a subset of social capital, where ICTs have opened up new possibilities for interaction. eBay is described as an example of new sociotechnical relations in terms of support for large groups, where the ability to provide honest feedback enables the maintenance of trust in such a large group online interaction environment (ibid.), and benefits sellers with higher prices. Davies defines online communities as being composed of communities of interest formed around e-mail lists or discussion boards; auction sites organised around reputation systems; local community portals and introduction services for business; friendship and dating. Should the government be involved in creating online intermediaries and spaces where individuals could interact, and where there would be higher levels of trust? Davies cites eBay as the most celebrated example of a reputation system, where a self-regulating market is achieved by having publicly visible reputations, when the monetary stakes are reasonably high. Policy makers pose the question of how to enable trust between people who have not chosen to associate with each other. Davies does not see a reputation system, per se, as a way of creating trust. He sees the eBay reputation system as working because people already have an ideological commitment to the system, and a certain amount of trust. eBay’s reputation system, he argues, is recognised and respected, partly because of its number of users – a new online community’s reputation system would need to earn its trust which would be difficult where people are not already bound together in some way. Hagel and Armstrong (1997) also acknowledge the importance of a critical mass in virtual communities. We would additionally argue that eBay’s trust and reputation systems are driven by norms of generalized reciprocity (see Putnam, 2000). People leave feedback for others which allows the community to assess trustworthiness as a ‘favour’ to others because they expect to buy something where someone has done that in return. There are direct © 2006, University of Essex Page 42 of 46
  • 43. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community and attributable financial gains in these norms of general reciprocity on eBay – you are less likely to lose your money or buy a not as described item because other members have already evaluated the seller and their trustworthiness, and as a seller you will achieve higher prices if you have a better reputation (cf. Resnick, 2001). These generalised norms of reciprocity which build trust amongst people who are unlikely to know each other are motivated by the fact that this makes for an efficient market. Without the market basis to the community, it is unlikely that people would be willing to leave feedback. The eBay community is also said by Davies to be underpinned by Visa and Mastercard – who defer some of the risks involved. Indeed, although eBay is a self-regulating market, it ultimately relies on certain ‘pressure points’ to police it. Credit cards can be charged back, and ultimately the police can be contacted about fraudulent transactions. Ironically, since eBay acquired the payment intermediary PayPal, it has moved towards more formal ways of compensating for lack of trust. As Boyd (2002) comments, their introduction of buyer protection schemes which offer up to £500 insurance if you buy through PayPal and the seller is eligible, replaces trust by stopping the need for it. Boyd sees this as undermining the community of trust (op. cit.) and cites seven elements which contribute to its ‘community trust’ model: individual identities (combined with feedback ratings and icons); reciprocal influence (users report violations and communicate with eBay); shared narrative (shared stories about eBay use); emotional connection (personal investment of time, finding friends etc); “uncommunity” (an antagonism towards those outside the community) and status (the desire to gain status – through coloured stars and feedback ratings). It would be difficult to institute trust into online communities which do not revolve around a common interest, and a sense of ‘uncommunity’ – a sense of who is part of the community by who is not. eBay also increasingly struggles with the ‘uncommunity’ element as it increases in size (cf. Bunnel and Luecke, 2000) – people in our study perceive that a sense of the eBay community is being diluted by ‘newbies’ who do not appreciate the eBay etiquette of long-standing members, and perceive some of them to be criminals or fraudsters attracted by the rich pickings of the site. Trust on eBay is breaking down with the site’s rapid expansion and what is felt to be a dilution of the ‘true’ eBay community. In a blog entry entitled “social capital on eBay”, one blogger describes the deterioration of eBay’s social climate at the same time as it “grows like a humongous mushroom” – seeing the growth as leading to customers not being able to benefit from the earlier relationships they have made through eBay, and negating the original social capital that eBay accumulated in the process (, 2002). Resnick sees ICTs as supporting brief interactions and social ties which may go dormant for periods of time but are able to be reactivated through ICTs (2001). However, the blogger is suggesting that these ‘fleeting engagements’ are unlikely to be reactivated because of the dilution of the initial eBay community by newcomers. 5 References (N.D) ‘Auctions’ [online]. Available from: ns [accessed 12/1/2006]. Amelang, K. (2005) ‘Inconsistent autonomies: entangled subjects, architects of time and paradoxes in projects of self employment based on eBay’, paper presented at Cultures of eBay Conference, Colchester, University of Essex, August 24th & 25th 2005. (2002) ‘Social capital on eBay’ [online]. Available from: [accessed 12/1/2006]. Anon (N.D.) ‘Seller loses two ways,’ [online]. Available from: [accessed 6/12/2005]. Bailey, J. P. and Bakos, Y. (1997) 'An exploratory study of the emerging role of electronic intermediaries', International Journal of Electronic Commerce, 1(3), 7-20. Bakos, Y. (1998) ‘The emerging role of electronic marketplaces on the Internet’, Communications of the ACM, 41(8), 35-42. Bakos, J. Y. (1991) ‘A strategic analysis of electronic marketplaces’, MIS Quarterly, 15(3), 295-310. © 2006, University of Essex Page 43 of 46
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  • 46. CHIMERA WORKING PAPER NUMBER: 2006-09 Implications of eBay for the policy community Slater, D. (2002) 'Capturing markets from economists', in du Gay, P. and Pryke, M. (eds) Cultural Economy (Sage, London), 59-77. Wilcox, R. T. (2000) ‘Experts and amateurs: the role of experience in Internet auctions’, Marketing Letters, 11(4), 363-374. (N.D.) ‘Consumer rights and internet auction sites’ [online]. Available from: [accessed 14/12/05]. © 2006, University of Essex Page 46 of 46