They changed from helpful online auctioneers to sinister corporate giants who take criticism very seriously indeed. Gustav Temple sticks his neck out

Remember that story in the newspapers about the chap who bought himself a house by selling gradually bigger and bigger things online, starting with, symbolically, a coil of old rope? The old rope sold for £5 and he used that to buy a book, which sold for £10, and so on until he had made hundreds of thousands of pounds, enough to purchase a house.

Well that all happened on a platform called eBay, which used to be an easy way to make a bit of extra cash from your unwanted chattels. Nowadays, eBay is an easy way for eBay to make a lot of extra cash from your unwanted chattels. The old rope story, as we shall see, turned out to be a perfect metaphor for eBay’s exponential growth.

In the beginning, there was something fun, friendly and devil-may-care about eBay. You could shove some stuff you found in the loft while clearing out, and the chances were that someone, somewhere, would want it. You could take a chance and list, say, a collection of vinyl records by Andy Williams at auction, with a starting price of £0.99. The beauty of eBay was that, by listing it on their platform, you stood a much better chance of reaching the world’s greatest Andy Williams fan than you would if you took your chances at the local boot sale.

eBay did all right out of it too, taking a modest commission on every sale. Incrementally, with its millions of users, this amounted to a decent income for the company. And all they had to do was set up the tech for people to use it. No office, no stock, no warehouse, few overheads.

That was back in the early 2000s, when the world was a different place. Check into eBay today with your collection of Andy Williams records and you’ll find them much harder to sell. Before your listing has even gone public, eBay will pester you with demands for “promotional fees”, explained in such a way that makes no sense at all. Various options are offered, with the sort of numerical jargon that only a seasoned ad sales expert would understand. “If more than 25% of viewers respond to your product within less than 40% of the listing time, and your product sells for 60% higher than the average price for such a product…” etc. Bewildered by all this language, most of us decline eBay’s offer to promote our product.

The result? Zilch. Nada. Niente. You check into your account after a few days to see how the auction is faring, but nothing has happened. Only one person has viewed your product and no one has bid on it. Spare yourself the agony of checking in countless times, because – and get ready for this – nobody is going to browse, inspect, watch, or show any interest whatsoever in your product. They don’t know it’s there. eBay’s promotional fees are, in fact, a visibility charge – using similar algorithms to Facebook and Instagram – to ensure that, unless you stump up some cash, no one will hear your voice crying in the wilderness. And nobody will know about your Andy Williams collection.

If you’d prefer the privilege of setting a fixed price for your product (“Buy it Now”), rather than taking the risk it will sell for only 99 pence, then the charges begin to mount up, depending on the value of the thing you’re selling. But by far the most lucrative invention of the masters of the universe at eBay is the reserve price option when listing at auction. You set a minimum price that you’d like to accept, hidden from the public. The higher the reserve price, the more you pay eBay in fees. If the bidding doesn’t reach your reserve price, the item doesn’t sell.

“Oh well,” you think, “maybe I’ll try selling it again nearer Christmas.” Then you look at the details of the non-sale and you realise, with thunder in your heart, that eBay has still charged you the reserve price fee, even though your item did not sell. Now, let’s think about this for a minute: imagine renting a market stall for a day, with an arrangement with the market’s owner that they take ten per cent of each item sold. You lay out your 24 items and hope for the best. Trade is OK, but not great, and at the end of the day you’ve only sold half of your items. Then the market’s owner comes over to you and insists on charging you ten per cent of all the items you had displayed, whether they sold or not.

A glance at the corporate history of eBay tells us a lot. Founded in the US in 1995 by Pierre Omidyar, the company grew very quickly, hosting 250,000 online auctions in 1996, and by 1997 the figure was 800,000 daily auctions. Today eBay turns over around $11 billion a year, with annual profits in 2024 at $1.975 billion. Omidyar stepped down from the board in 2020 and now runs the Omidyar Network, an advocacy and philanthropic investment firm, part of whose activities include challenging big tech firms like Facebook and Google.

Meanwhile, without its philanthropic founder at the helm, eBay, disgraced itself in the notorious eBay Stalking Scandal. Bloggers Ina and David Steiner had criticised eBay on their website EcommerceBytes. eBay’s then CEO Devin Wenig instructed eBay’s Communications Officer Steve Wymer to hound the couple, calling Ina Steiner a “biased troll” who should be “taken down”. Wymer in turn told the head of his Security Division: “I want to see ashes. As long as it takes. Whatever it takes.” The result, carried out by internal eBay staff, was a campaign of harassment that included sending the Steiners rotting pig’s heads, funeral wreaths and books about how to cope with the death of a spouse.

The result was criminal charges for seven eBay employees, and later a civil lawsuit was launched by the Steiners against Wenig and Wymer. The case has only just been settled out of court, with no disclosure as to the settlement.

Still want to sell those Andy Williams records on eBay?

This article is from Idler #110.

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