eBay and auction integrity

Following on from my previous post bidancient’s eBay account is showing as “no longer registered”.

Very right of eBay to do this. Granted, despite bidancient‘s “Titanium Power Seller” size, he only ever contributed an imperceptible fraction of a percentage to eBay’s revenue, and so eBay are hardly going to be crying about his loss. But given the enormity of the allegations (shill bidding and fake goods, as alleged by The Sunday Times, are little short of fraud) it was right for eBay to take the opportunity to stamp out dodgy behaviour when it came to their attention.

Cynics might say that this behaviour definitely happens with other sellers, who no doubt also have excellent feedback scores, so why make such a fuss over bidancient? But that is to miss the point. It’s like saying “Theft happens, so there’s no point in punishing it when it’s discovered”.

The point is that eBay works because if you want to sell something, it’s worth doing it on eBay. Why is that? Because that’s where the buyers are. And why are the buyers there? Because they have faith in the integrity of the auction. Challenge the integrity of the auction and the market eventually falls to pieces. “Eventually” might be a long time for a company with a $44bn market cap – but it is heartening to see eBay taking this issue seriously.

This applies similarly to procurement auctions (subtle differences in legal definition of a sales and a procurement auction notwithstanding) because procurement auctions rely on suppliers taking part and competing and smart suppliers are not above walking away from an auction that they perceive to be dodgy.

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eBay, dodgy sellers and good feedback scores

The Sunday Times on 28 Jan 2007 ran an article: Make me an offer: the eBay bid scam.

In it a Titanium Power Seller is brought to task for:

  • Getting his mates to place fake bids to drive the price up
  • Selling items that might not be all they were cracked up to be

Shill bidding might seem a relatively innocuous activity, because no-one is being forced to buy anything at a price they are not prepared to pay. But because of it distorts the market it is frowned on, at best, and illegal, at worst.

Equally importantly are the allegations that the goods for sale by this individual might be counterfeit.

Apparently his account has now been suspended.

It is odd, though, that according to Cronaca this individual had a feedback score of 99.5% positive – only 23 negatives in 6 and a half years. So despite any attempts he may have made to distort the market, his buyers seem happy.

Or maybe there’s a problem with the feedback mechanism. It takes a lot of nerve to leave someone negative feedback, especially because most of the time you’d expect people to sort out any issues rather than leaving negative feedback. Also there seems to be a process in place now on ebay where sellers wait till a buyer gives them good feedback, and then gives good feedback in return. Looks like people are trading feedback because both parties gain from giving each other feedback.

A more interesting feedback mechanism would

  • be more objective – how fast exactly did someone pay? how soon after payment was something actually shipped?
  • force sellers to leave feedback for buyers immediately after they have received payment. After all, buyers have to part with their cash and trust the seller to send the right goods
  • weights feedback based on how new someone is. The first trade anyone does is pretty daunting, so good feedback from someone who has bought something for the first time is more significant than for someone who uses the system every day of the week
  • but on the weightings side of things, an active ebayer who usually does leave feedback but does not leave feedback on a particular trade – well that is in effect a piece of bad feedback, right?