Essentially, the problem is a credentials issue. If you can distinguish "serious" buyers from the "scammers," then you're set. I've done a little freelancing on elance.com, and the way they handle this problem is that they charge a small amount to make bids. Of course, this is somewhat different since one is bidding for jobs and not items (receiving money, not giving it), but it's still not very helpful, since I doubt anyone would pay even a nominal fee to make bids for buying items. Craiglist's solution to this problem is to limit buyers and sellers to their respective local geographic areas, which turns out to be pretty effective, but can oftentimes constrain market opportunities (and of course, there's no built-in auctioning capabilities).
I remember one post on YC a while back was about generating post modernism essays in response to spam emails to the point where a spammer could not possibly sift through all of them in a reasonable amount of time (and the "English" nature of the essays would make them hard to distinguish from real responses). This would make spamming unprofitable. Perhaps this can somehow be generalized to problems like s(c|p)ammers on eBay.
> Anyway, it's worth a rethink along the lines of "can you redefine the problem?"
What if you built an Ebay from scratch around a secure financial escrow service?
Perhaps you could place a hold upon a credit card at the time a bid was placed, release that hold as soon as they lose the auction, and charge the credit card as soon as they win the auction. Don't charge a transaction fee (or charge as small a fee as possible) -- just hold the cash in escrow until the buyer verifies that he has received the product as agreed. If the buyer tells you he has not received the item or that it is not as agreed, you perform some kind of resolution. If no feedback at all is received from the buyer in X days, you pay the seller anyway.
I don't know whether buyers and sellers would love these terms, but they should be securable, and if Ebay is becoming inoperable, maybe they would work.
Ebay does a form of resolution, but I don't know if it's really good enough. On the extreme end you could offer formal arbitration. I'm not sure what's in between.
True. Saying as eBay owns PayPal, they could probably turn it into one though, if only for use on eBay itself. And you've probably already given PayPal your credit card number too.
But remember that in those "anonymous cash transaction" that occur in shops, the person with the goods can see the cash and the person with the cash can see the goods before the transaction takes place. Further, for most shops, at least, there's the presumption that the shop will still be there when a dissatisfied buyer returns with a problem.
Note that /cash/ is crucial when talking about a anonymous transaction. In a cash transaction, after a sale completes, the honest seller has essentially no exposure beyond, say, a warranty return. If you payment is instead made in some way (credit card, paypal, etc) where the seller is on the hook for fraud, things start to suck hard. Unfortunately, no governments/banks like totally anon ecash, for national security reasons (e.g., funding terrorism).
There are certainly ways to make credentials that are not easily recreated. One example, although perhaps not the best, is to send a text message to a cellphone number.
There are plenty of fools out there just gagging to throw their cash away. Note that the "current price" beside each item goes up 7 pence per bid, so it is easy to work out how many bids have been made on each item. For example, at the moment, there is a Play Station 3 up for auction, and it is currently at £38.08. Divide that by £0.07, and we see that there have been 544 bids made on this item. The nominal fee is 50 pence per bid. So the auction site has brought in £272 pounds so far, and the item is yet to be sold. In the time it has taken me to write this, there have been 35 more bids. The auction is likely to last for several more hours, bringing in at least £2 a minute, probably more like £5 a minute. There are many auctions on the site.
Basically, the site is a scam, as people pay to bid on items they will never win. But, it does prove that you can make people pay per bid, they just need to think they are about to get a great deal.
As a side note, this site benefits from having no social aspects, but is a nice example of a site that could not be built without AJAX. (If the people bidding could talk to each other, they would probably be able to work out just how badly they are being ripped off.)
PS: Also, the timeout for posting replies is annoying. Stateless servers do give you less chances to mess about with closures though, so I understand why it is this way...
I can't believe someone used Elance as an example of a solution to Ebay's problem. Elance is wrought with it's own issues of underbidding and serious off-shore dominance of almost every available web project. What was once a great way for freelancers to pick up new work, is now just a project farm for offshore companies looking for American work.
Don't get me wrong, I've used outsourcing firms myself and have no issues with it, it's just Elance is no longer a reasonable venue for small domestic firms.
Check out Dawdle (http://dawdle.com). A friend of mine started it, its a pretty nifty E-Bay like site based around video games which takes a stab at solving the credentials issue.
i checked out the site, but I can't tell how it solves the credentials issue. Besides having a really tight focus on product niche - how is this different from Ebay in terms of credentials?
The only site selling stuff that I know of, and actually tackles / comes closest to solving the credentials issue is Facebook. The only problem with them is that I don't see that many listings compared to craigslist and ebay
My site, I'll answer - because you're guaranteed to get paid. We handle the payment processing, and only notify a seller that you've sold an item after we've captured payment. There's no PayPal two step.
As a seller, you don't care who your buyer is, only that you can get paid and that the buyer agrees to have it shipped reasonably. We take shipping choice off the table - everyone has to ship USPS within the US only (no foreign transactions yet, we'll add this choice later, but that's the brute force way to solve it for now).
Don't you pretty much open yourself up to fraud? Instead of the seller needing to check the transactions manually and taking the risk that the person won't charge back all the money, you are the one getting the short end of the stick?
We do the standard anti-fraud stuff and have very good relationships with the credit card companies. Knock on wood, it's been a manageable problem so far.
You know, that's been our biggest issue - people approach the differentiators very differently depending on their experience. As a result of that, we've had a devil of a time really getting the benefit statement and the elevator pitch down pat. We'll probably go with some version of "safe and easy", but I'm all ears.
from my point of view, your front page (and even your 'how we do it' page) is not really any different from the n number of auction/trading sites that I've seen.
I wouldn't have even known that you guys have system/mechanism of guaranteed payment (and even delivery?), had you not posted it here
The problem with starting another Ebay is Metcalfes law that states that the value of a network is proportional to the square of the number of users of the system. They have a lot of users, and thus their network is valuable - even if you try to sell Nigerian stamps from 1800 there will probably be a bidder. A startup will have big trouble getting the first million users, simply because there aren't already a million users. It's a catch 22 situation.
The same is btw. true for facebook, etc. Their value is not in their technology but in their size.
True, attracting enough buyers and sellers will be a challenge, even if a scam-free model is invented.
This actually reminds me of the story of the Arizona Stock Exchange, which was technically a better model for selling stocks, but couldn't convince enough traders from NYSE and Nasdaq to give it a try (http://www.businessweek.com/1997/09/b3516129.htm).
I sold my laptop on eBay about a year and a half ago. The winning bidder had a 100+ feedback rating, so I thought everything was fine, but then I get the email that he wants me to ship it to Nigeria. I contacted eBay via their chat support, and they were actually not that lame -- they agreed that obviously one of these scumbags had pwned a legitimate account, and refunded my money. When I relisted it, it sold without incident.
Another data point. I just sold mine a year ago and had no problems.
I bought a laptop and 3 months later got a work laptop negating my need for the other. Sold it on ebay at a loss of just 50 bucks from the original price. Yet another reason to buy a mac. The resale value remains really high.
I've sold two Mac laptops on eBay--one 12" Powerbook G4 and the other a 13" Macbook (white). The 12" sold within 24 hours (August 2006) for $500 (!). The 13" sold within three days for $900 (I paid $1200 and it was 1 year old, refurbished). The 13" did come with some other goodies, like Parallels and Win XP Pro, however.
Craigslist should be thanking eBay, because all the scams and fraud on it have made all the people weary of shipping things, So local classifieds thrive.
eBay is a rule unto itself. They love buyers and do not care much about sellers.
I used to be a powerseller but stopped as I was fed up of people lying on eBay, especially buyers who received goods and complained to eBay they did not. In many cases I provided the shipping tracking numbers and eBay+PayPal could see the items were sent and recieved by the buyers but still they would refund buyers so sellers lose out.
They do this as it is easier to push around a seller (eBay tell you that you have to take the buyer to court but then will refuse to give you the buyers details) than a buyer (who can simply tell their credit card company to sort it out).
how do you sell your laptop on ebay? just list it as a single-priced auction, set shipping to USA only, reject any bidders that don't have a paypal account, etc. anyone who can't sell something on ebay without running into trouble like this is an idiot.
There must be a startup opportunity there.