CHIMERA WORKING PAPER NUMBER: 2006-09
Implications of eBay for the policy community




The implications of eBay for the p...
CHIMERA WORKING PAPER NUMBER: 2006-09
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The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
The implications of eBay for the policy community: eBay as a ...
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The implications of eBay for the policy community: eBay as a ...

  1. 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. rellis@essex.ac.uk & ahaywo@essex.ac.uk http://www.essex.ac.uk/chimera/
  2. 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 www.essex.ac.uk/chimera 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: chimera@essex.ac.uk Adastral Park, Web: http://www.essex.ac.uk/chimera/ 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 www.essex.ac.uk/chimera/publications.html 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 http://www.essex.ac.uk/chimera/ Page 2 of 46
  3. 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 http://www.essex.ac.uk/chimera/ Page 3 of 46
  4. 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 http://www.essex.ac.uk/chimera/ Page 4 of 46
  5. 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 http://www.essex.ac.uk/chimera/ Page 5 of 46
  6. 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 http://www.essex.ac.uk/chimera/ Page 6 of 46
  7. 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 http://www.essex.ac.uk/chimera/ Page 7 of 46
  8. 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 http://www.essex.ac.uk/chimera/ Page 8 of 46
  9. 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 http://www.essex.ac.uk/chimera/ Page 9 of 46
  10. 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 http://www.essex.ac.uk/chimera/ Page 10 of 46
  11. 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 http://www.essex.ac.uk/chimera/ Page 11 of 46
  12. 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 http://www.essex.ac.uk/chimera/ Page 12 of 46
  13. 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 http://www.essex.ac.uk/chimera/ Page 13 of 46
  14. 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 http://www.essex.ac.uk/chimera/ Page 14 of 46
  15. 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 http://www.essex.ac.uk/chimera/ Page 15 of 46
  16. 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 http://www.essex.ac.uk/chimera/ Page 16 of 46
  17. 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 http://www.essex.ac.uk/chimera/ Page 17 of 46
  18. 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 http://www.essex.ac.uk/chimera/ Page 18 of 46
  19. 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 http://www.essex.ac.uk/chimera/ Page 19 of 46
  20. 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 http://www.essex.ac.uk/chimera/ Page 20 of 46
  21. 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 http://www.essex.ac.uk/chimera/ Page 21 of 46
  22. 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 http://www.essex.ac.uk/chimera/ Page 22 of 46

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