eBay Bans Auctions Of Digital Goods

from the another-market-mucked-up-by-digital-goods dept

We’ve pointed out more than a few times how digital goods muck up traditional markets that are based on the concept of scarcity, and it appears that eBay has come to the same conclusion. It’s now banned the direct sale of purely digital goods from either its auctions or its direct sales offerings. Instead, those who want to sell digital goods need to put up a classified ad on the site, rather than a transactional platform. The basic reason has to do with the (wouldn’t you know it?) infinitely reproduceable nature of digital goods. That allows eBay sellers to list the same product many, many, many times over, since they have an infinite supply. This practice is screwing up listings and (more importantly) is being used to manipulate feedback ratings, and so eBay has done away with it.

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Companies: ebay

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Comments on “eBay Bans Auctions Of Digital Goods”

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69 Comments
Oliver Wendell Jones (profile) says:

In response to #1

I tried over the weekend to find a dirt cheap DVD player. The one in my boss’s office is dead and our budget for a replacement is tiny, so I hoped to find a good deal on eBay. I’ve bought used players for as little as $5 before and got a couple of years of use out of them.

I did a search for “DVD Player” and sorted by cost – low to high and a vast majority of the listings that show up are “Portable DVD Player” with starting bids of $0.99 and only when you read the listing do you see that it’s an opportunity to buy a list of wholesale DVD player vendors where you can buy them for up to 70% off of retail.

Some of the ones I read tell you in the description – “DO NOT BID ON THIS AUCTION – Send an e-mail to someaddress@somedomain.com and I’ll let you know how to get this list” I tried to report the auction to eBay by clicking the “Report this auction” link and after answering several questions I was directed to a help page with information about what is and what isn’t acceptable on eBay and was never given the opportunity to actually report the auction”.

After having to filter through all of that crap, I have no problem with them doing away with auctions of this type. Of course, the vendors will just switch to printed copies of the list that they snail-mail to you instead of e-mailing you a digital file, but at least it will cut into their profits some.

ehrichweiss says:

gooooood

I’m glad. I’ve watched a bunch of my buddies’ books get pirated in PDF format thanks to this and it’s near impossible to report the listings thanks to the fact that ebay wants you to jump through their hoops so you’ll get tired of reporting scams, etc.(you didn’t think they actually wanted to stop those scammers from making them money did you?)

Teilo says:

It's about time!

Frankly, I get pissed off whenever someone takes an online service, and uses it for a purpose completely different than what is intended, and what the consumers of said service are their for. It is arrogant and obnoxious. It devalues a useful service and makes it less useful.

If I am searching for a DVD player on eBay, I want to see hardware, not bogus crap like a wholesaler list. The jerks who post this crap are nothing but spammer scumbags. They are using eBay for free advertisement by using eBay categories as demographic targets.

comboman says:

also stops pyramid scams

This would also stop some of the pyramid scams I’ve seen on eBay. The auction is for a PDF eBook that tells you how to “make money fast”. The eBook tells you how to set up an auction on eBay to sell the eBook you just bought (though you also bought the rights to resell the eBook so does that still count as a digital goods auction?).

Paul says:

crafters

While there are many scams out there, this will unfortunately hurt many legitimate businesses such as craftspersons who create templates, or designers who create graphics packages. Sure they can use the mail to deliver originals but the convenience of digital transfer has a positive impact on sales. I think we will see the migration to niche sites like etsy.com.

Umer Khan says:

Argh

I think this sucks 🙁 I personally haven’t been exposed to the misuses of digital delivery of goods, but I did used to create original publication content in PDF format and sell it via eBay for some decent money. Now I would have to sell it as paper – and unnecessarily waste paper, make a trip to the post office, spend money on shipping, and the recipient would have to wait some days to receive it, and when they do receive it, it wouldn’t be in a searchable format.

Anonymous Coward says:

Re: Argh

Now I would have to sell it as paper – and unnecessarily waste paper, make a trip to the post office, spend money on shipping, and the recipient would have to wait some days to receive it, and when they do receive it, it wouldn’t be in a searchable format.

No, you don’t have to “sell it as paper”. They’ve got these things called CD-Rs now. You can put a PDF on one and it’s still searchable. You should check them out.

Misty Olen (user link) says:

Not So Sure This Is Good

This may be a good thing, but I’m not sure. I recently bought a Tracfone and a 60 minute phone card. I had my kids take the Tracfone with them on a trip because they were flying alone. The phone came with 20 minutes so I didn’t use the 60 min card. I was thinking of listing it on Ebay as a digital delivery thing and just emailing the code. Now, I could mail the card to the person that won, but that just seems like a waste of time when all they need are the numbers off of it. So, I’m not sure how this impacts things like this, but it does seem like sometimes digital delivery would be a legitimate deal.

Twinrova says:

Another eBay mistake when bigger problems exist

One poster described eBay as a cesspool and I have to agree.
I recently went there to find a part for my vehicle and the site was completely different than the last time I visited.

I was appalled at the number of crap listings with “0.99” starting bids but had a $49.99+ shipping & handling fee.

Then I come to find out buyers are no longer susceptible to negative feedback from sellers in addition to increased fees to sellers. Translation: The buyer is going to get screwed big time.

I didn’t find the part I was looking for, which is probably a good thing. I, for one, will never return to eBay again.

Cesspool is an understatement. If any site proves my point that capitalism is dead having replaced by greed, it is eBay (both sellers and the company).

Long live Amazon. 🙂

ererle says:

Re: Another eBay mistake when bigger problems exist

I’ve watched a bunch of my buddies’ books get pirated in PDF format thanks to this and it’s near impossible to report the listings thanks to the fact that ebay wants you to jump through their hoops so you’ll get tired of reporting scams, etc.(you didn’t think they actually sexy lingerie wanted to stop those scammers from making them money did you?

SP says:

This may be a good thing, but I’m not sure. I recently bought a Tracfone and a 60 minute phone card. I had my kids take the Tracfone with them on a trip because they were flying alone. The phone came with 20 minutes so I didn’t use the 60 min card. I was thinking of listing it on Ebay as a digital delivery thing and just emailing the code. Now, I could mail the card to the person that won, but that just seems like a waste of time when all they need are the numbers off of it. So, I’m not sure how this impacts things like this, but it does seem like sometimes digital delivery would be a legitimate deal.

This type of sale would still be allowed as far as I understand. Something like a code to “recharge” minutes on a pre-paid phone can only be used once. It’s not “infinitely reporduceable” and therefore the seller couldn’t offer the same code to 100 different people. Some digital downloads or “electronic delivery” items like this should still be allowed. Someone correct me if I’m wrong. I think this is a good move, too. It will get rid of all those damn “wholesale list” ASSHOLES. Now I suppose they are going to start spamming Craigslist with their BS…yay.

Tack Furlo (user link) says:

Re: phone card

As #21 mentioned this is not infinately reproducable, but also, couldn’t you just email them the code and also snail mail them the phone card? In this way, you’re selling them the card (i.e. a physical item), and yet they can go ahead and use it right away.

Of course, by that logic, you could also snail mail them the distribution list but go ahead and email the PDF of it now. Perhaps I need to rethink this comment…

John (profile) says:

Instead of worrying about feedback manipulation

If I’m reading the article correctly, eBay is making this change so sellers can’t manipulate the feedback system.

Instead of worrying about manipulating feedback, perhaps eBay should look at making the reporting process better, as in:
1) Make it easier to report a seller who doesn’t ship.
2) Make it easier to report a buyer who doesn’t pay.
3) Make it easier to report a fraudulent auction, instead of “going through hoops” as one of the above posters said.
4) Make it easier to report phishing e-mails. It seems like every time I report a phishing e-mail to eBay, I get a reply saying “The e-mail can not be processed” or some such.

I know eBay has to have “going through hoops” policies to weed out people who would file false reports, but like many people are saying, the tougher it is to communicate with eBay, the more likely people will leave.

chris says:

I think this is a good idea, because far too many people who have worked hard to write ebooks ended up losing a lot of money because ebay pirates would sell those same ebooks for $1.00.

It really hurts the market when people do this kind of thing. Maybe now ebooks will start to gain more leverage, and ebook writers will be able to start making some more well-deserved money!

Jake says:

Re: Why not limit the quantity of digital goods?

I see what you mean, but I’m a little confused as to how this hurts your business. For the benefit of those of us with little or no personal experience of selling on eBay, could somebody explain the exact difference between and relative merits of a classified ad and the other systems?

Jake says:

Re: Why not limit the quantity of digital goods?

I see what you mean, but I’m a little confused as to how this hurts your business. For the benefit of those of us with little or no personal experience of selling on eBay, could somebody explain the exact difference between and relative merits of a classified ad and the other systems?

Bob Tabor says:

Allow me to explain why this is GREAT NEWS ...

Ok, for several *years* I’ve been trying to shut down some jerk(s) in the UK and China who have purchased a single license to download training videos I create (and sell exclusively on my website) THEN they turn around and resell that downloaded content on eBay. I know for a fact that there have been literally hundreds of CDs sold illegally.

Sure, eBay has the Verio (sp?) (I think it stands for “verified digital rights ownership” program) which allows us to identify these clowns then after faxing (yes, FAXING) in a document to them, in several days they take down the auction … only to see the SAME SELLER posting the SAME AUCTION again several days later. So, I for one welcome this with open arms. Thank you eBay!

To answer some of the questions posed:

Q: Why don’t I just DRM the videos?
A: Because nobody — especially paying customers — want DRM. And I don’t blame them. I am responsible and I expect customers to meet me in the middle on this issue. Of course, the flipside is dealing with this sort of garbage.

Q: Why do I care? These people who purchase the videos on eBay would probably never be my customers.
A: First, that’s a big assumption. Several people are kind enough to report that they purchased the stolen videos and realized that they were fraudulent … and even offered to buy a license from my website. I sell to a small niche that is well connected. Every potential customer who receives ill-gotten gains is a potential customer lost and money evaporated from my business. Second, that’s MY CONTENT to sell and authorize usage of the content the way I deem. Third, it goes against what is good and moral. Yes, I said “moral” … which doesn’t seem to carry a lot of weight nowadays. Just because you have the technology to skirt the laws doesn’t make it morally right. That’s MY CONTENT and I’ll decide how I want to be compensated for it. If you don’t like it, don’t watch/listen/read the content.

Q: This doesn’t represent a real cost to you, does it? Why do you care?
A: Yes, it does represent a real cost. I have an employee spending several hours each week — and have done so for several years — to scan through eBay and find these auctions, fill out the paper work, and shut these knuckleheads down. No, I don’t have to do this, but I want to do this for all the reasons mentioned before. This full-time employee also does the same thing for bit torrent search engines … which actually are more accommodating than eBay many times!

Yeah, my rationale may make me sound a bit irrational or impractical. I’m obviously speaking in ideals … and I’ve not made a big stink about it. Still, I would say this announcement puts a small smile on my face, as well as all book publishers who want to meet market demands for electronic versions of their content while protecting their intellectual capital. As a consumer, you should be HAPPY for this because when content creators know there is an economic upside to producing content in various formats and know that it is not easily pirated, they are more likely to spend more time and resources on producing more content in electronic format, which often costs much less than printed copies.

To the guy saying he sells his eBook on eBay, I would suggest one of literally dozens of eCommerce tools that allow you to do this and have tight paypal (or other credit card merchant account) integration. Your content offering would appear to be more professional, and you then have the ability to brand yourself (in some small way) in hopes of upsell opportunities.

Anonymous Coward says:

Re: Allow me to explain why this is GREAT NEWS ...

So, I for one welcome this with open arms. Thank you eBay!

Are you confused? I don’t see how this new policy will help the situation you describe at all. This new policy restricts auctions of purely digital goods (i.e. not goods on physical media) and so would not apply to CD’s.

Mike says:

I was just about finished my ebook i was writing

this is stupid.maybe they can have a thing where u send them your ebook and if they approve it, u can sell it on there. and that way they avoid scammers who duplicate ur book and sell it as there own. since they have to submit it to be alowed to sell it. if someone else submits ur ebook, it will just be rejected. that what i think they should do.

Gaspard Leon says:

Sort of a good idea.... but!

The idea is ok, most “infinitly reproducible” “non-scarce” goods should not be sold in the same “bin” as scarce goods…

e.g. you can sell a car and once sold you and the new owner cannot drive/own the car at the same time.

e.g. you can sell a watch and only one person can wear it at once…

these are “scarce goods”…

BUT you can sell an MP3 or an ebook and it can be an exact copy and you and the buyer still retain a copy, it’s not “scarce”

there are legitimate reasons for “non-scarce goods” to be sold, but they should be in a _separate section_

And this gets to to main part of my argument, ebay should enforce categories using ratings. That way, when you search in the “DVD players” category, you don’t get DVD discs or lists or whatever… if something is mis-categorized, you should be able to flag it easily.. if a couple of people (with decent ratings themselves) flag it as incorrect then it automatically gets moved to another category, or de-listed… also if a user has many mis-categorizations, the user is flagged, and followed up by e-bay…

seems simple enough, use the wisdom of crowds…

Nerys (profile) says:

Problem with wisdom of crowds

The problem with this is that it can and WILL be gamed ie there is nothing to stop one competitor from abusing this automated system to “take out” the competition. Does not matter if it can be fixed the damage will already be done.

The only solution is also the only solution ebay will not take. Thats because the solution is to HIRE people and that costs money. No chance in hell they are going to eat there profits hiring people when they can simply BAN IT and keep the profits.

pauldy (user link) says:

EBay is being run by morons now, they aren’t doing anything about the scam auctions or the here buy my information on how to get a free car, laptop, or mac mini. Instead they are going after the digital auctions. I haven’t bought anything from EBay in quite a long time because they are so fraudster friendly, I closed my paypal account as well because they too have made themselves more friendly to fraud by shortening the dispute time.

Richard Rost (user link) says:

eBay Ban on Digital Goods

I would like to go on record as saying that this new policy ABSOLUTELY STINKS. I have built my business upon providing quality digital products in the form of computer video tutorials and ebooks. I have many thousands of satisfied customers. I have only been selling on eBay now for a few months, but I have over a hundred now very happy customers with almost all positive feedback. This new policy is only going to hurt the many legitimate vendors who sell digital goods.

Richard Rost
599CD Computer Training
http://www.599cd.com

Rick says:

World Wide Ban on eBay Takes eBay Sales & Stock Tumbling

I just read some breaking news that there is another BAN going on!

Users of eBay, all accross the world, have been raging a HUGE BAN on eBAY and have not been using the site any more since the new regulations on Feedback, Digital Deliveries, and other problems with the out of control California Based Company.

Users are simply plain “FED UP” and have finally ALL COME TOGETHER to agree to not to use the site.

Reports have indicated, so far, the eBay SALES HAVE DROPPED OVER 35% and THEIR STOCK PRICE IS FALLING Rapidly. Some predict, that if users stick together in this ban, that eBay will drop drasticly as a major player in the market.

News also reports that other sites activities, such as Amazon, Click Bank and others have increased and some new arrivals have come and that the weakened eBay may finally be able to be overtaken by a NEW and BETTER PLAYER in the market!

Its all about COMPETITION in the marketplace. eBay is NOT the only marketplace, said one expert, and the marketplace will correct itself!

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