Setting up shop: Part 1.

I’ve been selling second hand items, off and on, for a couple of years now. I’ve always used either eBay or their free-to-list version, Gumtree. What I don’t like about eBay is the fees. They have updated their fee schedule again, and now in addition to double dipping by  charging you a fee as eBay then again as their other company paypal, they want to assess their final valuation fee off the price of the item plus postage.

And here in Australia, that’s a killer. A regular post pack comes in sizes of upto 500g ($8) between up to 3kg ($13) or 5kg ($17). So 10% of those postage costs will now be coming out of your profits on the item sold.

This was after an unsuccessful attempt by eBay to get sellers to offer free postage (they claim this entices more buyers) but add the postage costs on to the item itself. A neat way to give them a bigger cut of the pie that obviously didn’t see the take up they desired because now they’ve changed their fee schedule to ensure that they do get paid a slice of that postage cost, whether you like it or not.

So on to gumtree which is fine but not without it’s problems. For one thing while it is free to list, you will be competing against other people who are paying to stay at the top of search results in categories. To stay at the top for 7 days costs $1.99 but if you really want to shine, the full service treatment costs $14.99, which is pretty unaffordable if you what you’re selling is worth less that $150.

Plus it is a much smaller market, more geared towards household items and furniture that would usually be pick-up only. As such, it’s not really a solution for those items you might sell on eBay seeking a larger audience reach. People searching on gumtree first select their region, so you are not really going to reach many people outside of your area unless they are really looking. Fine if you are holding a rare collectible I guess, but for regular items you are looking to sell quickly and easily, you may be disappointed as your listing slips further back in the search results without ever engaging with people outside of your region.

Additionally, gumtree is set price. There is no auctioning items to the highest bidder. I have recently sold a baby carrier designed for hiking. I thought my price was pretty good, but judging by the number of people contacting me after it sold, the market might have been able to pay a bit extra. If I’d been auctioning it off, I might have made more. Then again,if I’d gone the eBay route, maybe whatever I made would be eaten up by fees.

Lastly, I want to accept payments outside of paypal. Gumtree is almost entirely cash, which is fine, but it means strangers will come to your house to pick up. Staying at home with the baby, I don’t really want random strangers knowing my address. On eBay, I want to encourage people to not pay by paypal, but for a long time, offering paypal has been mandatory. Offering bitcoin payments has been a matter of adding wording to the ad itself and then you are on your own as to how to facilitate that. There is no smooth integration, like with paypal, I guess because eBay doesn’t get a cut of that. (Call me cynical, but that’s their racket, so of course they’re going to block and discourage alternate payment options.)

Thus I have come to the conclusion that eBay and gumtree are no longer viable ways to sell online for me. Additionally, I want to expand from just selling second hand items into crafting some original stuff and I think a proper shopfront is the way to go. To this end, I’ve been looking into etsy, shopify, square or running my own shopfront through a blog, like my buddy Drew over at cryptoparacord.

In my next post I will be detailing what each of these options offer to someone like me and hopefully encourage you to think about why you might choose one to start or expand your own business.

Ebay adds a “virtual currency” section.

In a move that has astounded the altcoin community, Ebay has added a section for the sale of cryptocurrencies and mining contracts. Astounded, because this represents a complete reversal on policy as it has been enacted.

While this sounds like a great opportunity for the mum and dad investor to sell some coins (especially given the huge markups, for instance bitcoin being listed between $800 to a $1000 per btc, as opposed to current market value that is between $400 to $500) I would urge caution. Don’t be fooled into thinking that accepting the transaction fees on altcoin sales is the same as fully supporting cryptocurrencies.

It should be noted that there are many instances of people who have sold their coins on ebay only to lose both their coins and their paypal balance to fraudulent reversal scams.

The problem is that digital currencies are intangible. So long as a buyer can claim they never received anything, paypal will find in their favour. A work around might be the use of paper wallets sent by registered post, but it has been pointed out that many potential buyers will not feel comfortable with trusting a seller to forget those private keys. Additionally, it is very much like sending money in the mail – there will always be a risk of loss or theft. The larger the value involved, the less you will want to be sending it through the mail.

There is one way to clearly show that a transaction has occurred: the blockchain. A public ledger of transactions should be evidence enough that a person has recieved their coins. However, in practice this is not working out, as u/unclejessesmullet says in the discussion thread on r/bitcoin:

“Yep, happened to me. I sold on ebay several times, it usually worked out OK but on my biggest sale a guy ended up doing a chargeback after I sent the bitcoin. I provided both ebay and paypal with proof from blockchain that I sent the bitcoin to the address he gave me, but ebay and paypal both were completely useless and gave the guy his money back. Adding a category for bitcoin on ebay is just supporting scammers.”

and u/px403:

“Believe me, I spent hours trying to get them to understand that a transaction id on the blockchain was like a tracking number, but they didn’t go for it. Why would they? They provide a competing payment network.”

The blockchain is the receipt that sales on eBay need, so why do paypal and eBay not accept it as such? I hate to be cynical, but I think that it is because they simply do not care. So long as they get their cut of the final value fee, they are happy to accept your listing.

The worst mistake you could make would be assuming that this new category in any way represents eBay embracing cryptocurrencies. Seller protection still will not cover you for intangible goods and until there is an updated terms of service that includes intangible goods, you will be exposed to scammers.

It should also be noted that this is the third time eBay has added a crypto category. Each time it has been removed. People are also noting that the use of the term “virtual” currency, which is not standard nomenclature, demonstrates how lightly eBay has looked into this venture.

A lot of the mums I know got their first taste of e-commerce through eBay. It is very easy to set up an ad and do business. So I know a few of you will be tempted to try and sell through eBay, but for now I would have to urge caution. I know I won’t be selling any of my coins through eBay any time soon, but I really hope that one day it becomes possible.

If you could buy and sell coins through eBay, you would have a massive, stable exchange that the average man or woman would feel comfortable using. That could be a massive boost to the use of cryptocurrency! However that day is a long way off – until then, make sure you are always practising good security and if you do choose to sell through eBay consider selling only paper wallets sent via registered post. Remember, it’s not just buyer beware. Sellers must do their due diligence as well.