Is eBay dishonest?

Question: Is eBay dishonest?

I am regularly asked three questions about eBay by would-be shoppers that are disgruntled over what they see to be dishonest practices:

1. Doesn't eBay actually have a team of "shadow" bidders that make rounds bidding on auctions to keep prices high?
   
   
2. Doesn't eBay keep their prices low by charging a lot for shipping and hoping nobody will notice? And don’t they give the false impression that items on their site sell for $1 when in fact they never do?
   
   
3. Doesn't eBay take advantage of people by selling goods that people assume are new and in the box, when in actuality many of them are used or without any accessories?
   
   

Answer:

No, eBay is not dishonest. All three of these questions make the same mistake about eBay: assuming that it's a regular retailer like Amazon.com, rather than an auction house.

Unexpected and Suspect Bids?

Problem: Every time I bid, someone outbids me, either immediately or shortly thereafter.

Suspicion: eBay employees or shills are watching for bids from the public, then outbidding them to drive prices up.

Truth: eBay doesn’t bid on eBay auctions. They have no reason to do so. Millions worldwide shop on eBay, so anything that you want, someone else will also. Most goods will reach fair market prices similar to prices at discount or warehouse stores before an auction closes. If you’re shopping eBay to find brand hew high-definition television sets at a 75 percent discount, you’re barking up the wrong tree.

There are, however, reasons why it might appear as though something fishy is going on. Users unfamiliar with eBay’s proxy bidding system often assume that immediate outbids are the result of eBay shills or employees, when in fact another bidder has placed a higher bid in advance that is automatically being placed in response to a bid.

Many users also monitor auctions they’ve already bid on. When they are outbid, eBay notifies them via email or text message, after which they return to place another bid.

What you can do: Become familiar with all of eBay’s bidding system. Consider waiting to place your bid until late in the auction if you want to minimize the possibility that other bidders will have time to be notified, return, and bid again in response.

Price and Shipping Cost Suspicions?

Problem: Low item prices disguise high shipping costs, or items priced at $1 never sell at the $1 that you offered for them.

Suspicion: eBay is dishonest about their pricing, advertising something other than what you’ll pay.

Truth: eBay doesn’t set the prices for items that you find on eBay. Shipping costs are set by sellers and are always listed along with the item. This cost is a part of the contract into which you enter when you place a bid.

Many items do start on eBay at $1 but almost none of them ever eventually sell at this price. eBay is, after all, an auction house. Final item prices are set by the market—other bidders and what they’re also willing to pay. As is the case with any auction, the item goes to the highest bidder. It is unlikely that you’ll ever be able to buy a car, an iPod, a digital camera, or a leather jacket on eBay for $1; another bidder somewhere on earth will almost always be willing to pay more than that for the item in question.

What you can do: Look carefully before you place a bid to be sure that you’re willing to pay the shipping costs involved. If you aren’t don’t simply bid anyway and expect the shipping costs to be adjusted downward; they won’t be.

Expect to pay a fair market value, not $1, for any item that you see on eBay. If you’re bidding in hopes of winning fabulous goods for pocket change, you’ll be disappointed forever.

Goods not as advertised?

Problem: Many goods that you buy on eBay are used and/or don’t come with all of the accessories or warranty that they come with when you buy at a retail store.

Suspicion: eBay is fraudulently selling subpar goods to an unsuspecting public.

Truth: Again, eBay doesn’t sell anything on eBay. eBay is an auction house where buyers and sellers transact. The sale in question is being made by the seller, and it is the seller who guarantees the quality and condition of the item, not eBay.

It’s not at all uncommon for used goods to be sold on eBay; in fact, this is one of the reasons many sellers love eBay—it’s a great place to sell used or incomplete goods. Many buyers love eBay for that reason as well, since used goods are often just as functional as their new equivalent, but can be bought for much less money.

What you can do: Always read the item listing carefully for details about condition and what is included in the sale. Never assume that you’re getting anything other than what is explicitly mentioned in the listing. Take care to check a seller’s feedback very carefully before you bid. This score is there for a reason, and that reason is simple: to tell you as a buyer how satisfied previous buyers have been with this seller’s performance. If other buyers have been dissatisfied with a seller’s goods, chances are that you will be, too. In fact, this may be the reason why some auctions appear to have very low prices in the first place. Other buyers have recognized that the seller is a rotten apple and are unwilling to bid on their items for fear of not getting what they’re bargaining for.

Remember: eBay Is No Retailer

The most important thing to keep in mind when shopping on eBay—and when wondering about whether something you’re seeing on eBay is suspicious or not—is that eBay is an auction house where independent sellers sell their goods to a worldwide audience of independent buyers who are actively engaged and want the same items that you do. eBay provides lots of features to help buyers to outbid one another, many of them automatic, meaning that many of the bidding wars that take place between buyers on eBay are rapidly facilitated by automatic bidding features that you, too, can use.

At the same time, because eBay isn’t selling anything on its site, it’s not eBay’s responsibility to price, ship, or guarantee items. All such decisions are made by sellers and other bidders against whom you’re competing. If you don’t like the look or the terms of an auction, move on. It’s not the auction for you.

Just as importantly, don’t have unrealistic expectations. eBay is not a secret or little-known place where 90 percent discounts await on every page and in every category. It is the world’s largest online marketplace, full of highly competitive traders. This means that the prices you’ll find on eBay are the closest thing to “fair market value” for a given item and seller that you’re likely to find anywhere on the planet.