eBay is Unfair to Buyers

Every time I bid on eBay I see this:

Notice that bit about “You are agreeing to a contract — You will enter into a legally binding contract to purchase the item from the seller if you’re the winning bidder.” Why don’t sellers have to adhere to it too?

Time and again when I finally manage to score a really good deal on something, the seller cancels the auction, refuses to sell the item, tries to change the price or terms after the close of the auction, or otherwise reneges on the deal. If my bid is a contract, why isn’t their listing? Or conversely, if a seller can back out of a deal whenever they feel like it, why can’t a buyer?

eBay provides a valuable service, and network effects have shut down almost all its competitors over time, but buyers and sellers are extremely unhappy with it. Make no mistake, eBay is vulnerable. A savvy competitor could challenge it within a year. Paul Graham figured this out two years ago:

I suspect EBay could now be attacked on its home territory, and that this territory would, in the hands of a successful invader, turn out to be more valuable than it currently appears. As with dating, however, a startup that wants to do this has to expend more effort on their strategy for cracking the monopoly than on how their auction site will work.

I wonder if anyone’s taken him up on it? I’m too comfortable in my current job to be very entrepreneurial about this opportunity right now, but if I were to find myself suddenly unemployed, this is probably the arena I’d attack. That said, if anyone wants to go after this and needs the strategy, contact me (or figure it out yourself–it isn’t that hard.) Be warned that like most great ideas, actually implementing an eBay killer is 99% perspiration, but I’d be happy to sell the 1% inspiration for 1% of the company.

This entry was posted on Saturday, February 6th, 2010 at 7:49 AM and is filed under Economics. You can follow any responses to this entry through the Atom feed. You can skip to the end and make a comment. Pinging is currently not allowed.