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'Integrity of eBay markeplace' at risk - sellers' group

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It has been a bad few days for eBay. Last week more than $12bn (£6.4bn) was wiped off the value of the dotcom auction house as it warned that its financial performance for 2005 is unlikely to live up to bullish expectations.

Now discontent is growing among its big traders, who are dismayed with recent price rises imposed by ebaby and alarmed about the reputation of the online marketplace.

The Professional eBay Sellers Alliance ( PESA) - a trade group for business merchants operating on eBay - reckon that the "integrity of the eBay marketplace is the single largest issue challenging their businesses on eBay".

PESA represents "600 high-volume eBay sellers representing a wide variety of goods and services, PESA members currently generate over seventy million eBay transactions each year and over $1bn in annual eBay gross merchandise volume". It is worried that "negative buyer experiences and the associated media coverage have created a strong caveat emptor mentality among shoppers when considering browsing eBay".

A quick trawl of news stories in recent weeks reveals the PR problem facing eBay. Illegal items such as drugs and weapons can be sourced with little effort. Stolen - or non existent - goods are also up for sale, although eBay buyers often only find out to their cost when it's too late.

For instance, Cleveland.com reports that police have broken up a $100,000 (£53,000) a year scam in which car radios were stolen from car dealerships only to be sold on Ebay. While a three-month investigation by MSNBC.com revealed the easy availability of illegal drugs such as anabolic steroids used by people looking to bulk up their bodies.

Earlier this month, California man Jerry David Hasson, 55, pleaded guilty to violating the US's Archaeological Resources Protection Act for selling a 200-year-old skull of a Native Hawaiian that was stolen from a beach on Maui via eBay. The issue of antiquities isn't just of concern to the US. Last year the British Museum called on eBay to pull listings for ancient artefacts after it warned that hundreds of items - which should be assessed first under the Treasure Act - were being offered for sale via the auction outfit.

Trust me, I'm an online auctioneer

And one of the most damaging stories to hit eBay recently came after a judge sentenced a Leicester woman for flogging non-existent tickets to the Glastonbury music festival. Sentencing the former payroll clerk, Judge Richard Bray said: "There may be certain safeguards that I have not been told about, but that appears to be the case and you took advantage of that. These trusting people, they get on the internet and they ask for a ticket and they send a cheque without any knowledge of who they are sending it to. Provided you don't have fraud against you on eBay, you are all right as a fraudster. You can get on and sell anything you like."

And the stories go on. "eBay scammer indicted for $66k fraud", "Eight fined in eBay auction scam", "MP takes aim at eBay over gun sales", "Teen eBay fraudster pleads guilty to £45k scam"... It makes not a jot of difference whether these stories originated in the US, UK or wherever. With a global brand operating over the boundary-less expanse of the net, the cumulative effect of negative press stories is taking its toll.

Stories of fraud and illicit items may make some punters wary, but there is another issue that is causing concern. Whether real or perceived, there was at one time a sense that you could pick up a bargain on eBay. Unfortunately, the chances of that happening appear to be diminishing. As one eBay veteran told El Reg he's been caught up in auctions on a number of occasions only to find that he'd paid over the odds for goods. Experiences like that have dented his enthusiasm for eBay.

On the flip side, some traders claim that increased competition has hit their prices.

"During the past year, our members have seen the eBay marketplace weaken. While competition in the market has increased, we believe that the state of mind of the shopper is the primary underlying issue. Conversion and average selling prices have slid across most categories. Buyers appear more price conscious than ever. We believe that a shift of balance of buyers versus sellers as well as an erosion of buyer confidence from fraud experiences and media attention has caused the flattening growth of eBay US.

"Although eBay started as an online flea market, many of the merchants that have joined the site are now offering new merchandise. Unfortunately, buyers still perceive eBay as a flea market with shady sellers and poor customer service."

What's more, there are genuine concerns that eBay doesn't seem to be acting to address the issues. Late last year eBay users in Spain threatened to boycott the service unless the company addressed their concerns. In the UK, eBay regulars are just as bothered at the way the operation is heading.

One UK eBayer told us: "One of our main gripes is the ease at which someone can join eBay using false details. At the moment anyone can complete the online registration forms and put in any made up address they desire." This, he fears, leads to "auction wrecking" and other disruptive behaviour which goes to undermine consumer and etailer confidence.

This is echoed by PESA: "We believe that eBay needs to implement policies that will prevent people with negative intentions from doing excessive damage to innocent shoppers. eBay should verify the address and identity of sellers as well as place restrictions on selling activity until certain criteria are met. A new seller should not have an issue providing a verifiable name and address before needing to list 50 plasma televisions or laptop computers."

Still, it's not all doom and gloom. Where would we be without someone trying to flog a cheese toastie with a picture of the Virgin Mary, a Texas snowball for sale or a skint Londoner who tried to sell "absolutely nothing? ®

Related link

PESA statement on eBay security

Related stories

Internet fraud is easy, says judge...
eBay Hawaiian skull vendor avoids jail
eBay scammer indicted for $66k fraud
Eight fined in eBay auction scam
MP takes aim at eBay over gun sales
Teen eBay fraudster pleads guilty to £45k scam
eBayer bids $20k for Texas snowball
For Sale: Absolutely Nothing

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