eBay Discriminates Against Ebook Sellers, Squashes All Digital Downloads

Lame eBayIn what will go down in Internet history as probably one of the lamest decisions ever in e-commerce, running second only to the firing of AOL CEO Jon Miller in 2006, eBay announced yesterday it will no longer allow any digitally downloadable product to be sold via an auction. You read that right, if you sell an ebook, digital recording, electronic forms, WordPress templates (or any template), digital graphics, ecards or anything else that can be transferred electronically, you are being kicked out of auctioning your goods on eBay like a red-headed stepchild. Don’t let the door hit you on the way out.

This utterly remarkable and shortsighted policy update was announced only 7 days before its scheduled implementation, giving those who make their living off of digital goods little recourse. All digital goods are scheduled to be removed from eBay auctions and stores as of March 31. All sellers of digital goods will now have to spend $9.95 per listing to place their products as a 30 day listed classified ad. This policy will put many eBay Power Sellers and hundreds to thousands of others effectively out of business because of the high initial cost of a classified ad. Sellers who market their digital downloads through eBay stores and have been able to list goods for mere pennies, cannot afford to list hundreds of ebooks, mp3’s and other items for $9.95 each.

eBay hastily decided this arcane policy because some digital sellers use these goods to manipulate the feedback system and artificially boost their status. The way this works is some sellers market near worthless ebooks for 1 to 99 cents and list hundreds of auctions only looking to increase their feedback numbers and ratings. So instead of eBay dealing with the problem, they make a blanket policy that hurts everyone, good and bad, who markets these products.

This is an incredibly ignorant move on eBay’s part. I have personally sold our Vegan Meal Planner on eBay via auction and classified style and have had much better success with auctions. Auctions excite people into making a buying decision, classified ads don’t.

If you are listening eBay, the answer is not to move backwards. Last time I looked at a calendar it was 2008, the digital information age, and the last company (AOL) that forgot where they were, lost more than 60% of their users nearly overnight. The answer is to deal with the people who manipulate the feedback system if that’s the problem, not to put legitimate merchants out of business.

To see how completely out of touch eBay is on this issue only requires one to read the completely inept statement issued just yesterday on their web site. Brian Burke, Director of Global Feedback Policy states, “Digital goods are often reproduced at little to no cost to the seller.” Well, yes they often are, but often they are not. My wife and I poured about 70 hours worth of work into our vegan meal planner and I am sure many information sellers spend multiples of those hours producing their products as well. The duplicity of this statement is evident in the fact that much of the junk, and I do mean junk, sold on eBay comes from the country that is the worst violator of human rights on the planet. Many of the hard goods sold on eBay are produced in the sweatshops of China, “at little to no cost to the seller.”

Lame eBay, just plain lame.

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23 Responses to “eBay Discriminates Against Ebook Sellers, Squashes All Digital Downloads”

  1. That noise you hear is the sound of a million affiliate marketers heads exploding.

  2. I used to sell “websites” on eBay – in particular one that encrypted & decoded the PayPal forms using silly Javascript. It was a good run while it lasted, but I stopped selling them over 5 years ago and there are STILL eBay auctions linking to my graphics. I guess that’s going to stop now.

  3. A decision with this amount of backlash leaves a huge opportunity for an on-demand startup to create an “intellectual property auction site.”

    Nudge nudge… =P

    At any rate, this is an incredibly stupid idea and I am positive they will get an earful for it.

  4. It sounds like most of the dollar auctions (aka. “Feedback” auctions) will be moving to the “You are bidding on a single, white, envelope” variety.

    I’d agree with Collin that this would be a great time for a digital auction site to launch, but I think by the time it would be running reliably, that Ebay will have changed its mind. After all, the loss of even the listing fees must be enough to make them hurt.

  5. If I knew a web developer that could tackle a project like that and I had the time myself, it would be worth looking into.

  6. At first read I thought this was an early April fools joke.

    This proves once again Ebay is so far out of touch with the market it’s not funny. The Harvard and Yale suits that make these selling decisions have zero, zip, nada experience in the trenches selling on Ebay. Much less selling on Ebay for the last 7-10 years.

    It’s almost as if 10 of these Harvard suits jump out of their BMW’s into the Ebay boardroom, pass around a crack pipe to all 10 of them, after 5 minutes of smoking come up with the latest and greatest “plan” to make Ebay better.

    Give me back the Ebay of 1998. 100 times simpler and 100 times easier to make money. I won’t be holding my breath.

  7. They should just set up their own blog and use wpauctions to sell their ebooks.

    Plus, we can provide them the traffic from our live auctions page.

  8. Well, i hope some clever guy now puts ebay out of business by creating a new one with a better system :) One can only dream.

  9. Well, I’m sorry for the good people that are making a legit income selling digital goods on eBay, but I for one, was getting tired of shopping on eBay and having a good 30-50% of the results being crappy eBooks.

    On the other hand, I think eBay should have gone down another route (The classified thing is aweful, and seems useless). They should have created a separate category tree for digital products, and enforced it.

  10. I used to be able to make decent money on ebay but here of late, it stinks. Not only for digital ebooks but other items as well.

  11. It’s unfortunate that eBay is going that route. However, this will create to opportunities for creative individuals to profit from this misguided action.

  12. One of the most inept and bungling moves I’ve seen in a long time. I couldn’t adequately state how I feel about this in just a comment on this post, so I posted eBay kills eBooks instead.

  13. Once again eBay thinks only of itself. Remember the fiasco over the PS3’s? eBay busted the chops of legitmate sellers left and right, but allowed fake accounts to bid up the prices outright. Only 1 in 3 buyers were real people. eBay was watching like a hawk. There’s no way they could have missed so much fraud going on under their noses. I figure it’s just a matter of time before someone comes along and beats them at their own game with a better system.

  14. This is really bad news. Does this also apply to half.com? I occasionally buy ebooks.

  15. I dont blame them, people were just spamming the shit out of ebay with useless crap. Sure some legit downloads and such will be lost but i would rather not have to search through crap. Just burn whatever it is on a cd and mail it to them.

  16. I think all this will do is give space for another competitor to come and take the lead.

  17. Guitar Hero Aerosmith has a good point. Just burn it on CD. It wouldn’t be the first product that’s done well even though it was mailed out to clients.

  18. Burning your product to a CD, although more work, should only increase your cost by $1.50 or so once you factor in the blank CD, envelope and postage. If it is a good product people won’t mind a small markup since they will be getting a physical product.

  19. Ebay is making some serious moves to discriminate and alienate their sellers. It’s too bad.

  20. With a variation on Guitar Hero Aerosmith of burning them onto CD, the workaround could be advertise the Ebook as a CD/Printed matter with P&P then after the sale offer the client the chance to save the P&P by downloading it.

  21. I cant believe that they would have the lack of vision to put such a stupid policy into place.

    They have made moves like this before to discriminate and aleinate sellers, and I am sure they will do it again. Basing a business solely around Ebay sales is now a thing of the past, or one on borrowed time.

  22. I’m an ebay seller – interesting article. I just had to comment when I saw your vegan site as I’m a nutritional science maniac and I was pleasantly surprised to see your link! I’ll check it out in depth soon :) Thanks.

  23. Personally, as someone who buys a lot of ebook on ebay, I find this very disappointing from eBay. It was great to go and do a search on a subject I was researching. I could nearly always find an ebook on ebay and could be reading it within 5 minutes with the digital download. Well it’s their business and who knows where they want to take it. I know for sure though they are upsetting a lot of their customers at the moment. Their reply though – ‘They’re doing it for us”. Right…

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