BOOT CAMP ARCHIVE 2005

  

 

BOOT CAMP 382 (21/06/05)

ebay Top Tips part 1 -- Getting Started

 

When we last looked at online auctions almost two years ago a relatively obscure company called ebay (www.ebay.co.uk) had just emerged as the front-runner following a fiercely fought battle between rival Internet auction websites. Since then ebay’s growth has been nothing short of phenomenal and the statistics are simply mind-boggling. 

 

Ebay now has around 120 million users worldwide, almost 10 million of them in the UK, with upwards of 25 million items offered for sale every day and it is possible to buy just about anything from a box of safety pins to Margaret Thatcher’s handbag (a snip at £15,000) or a Gulfstream executive jet, which sold last year for £3.4 million.

 

Ebay has evolved from an online car boot sale into something altogether more sophisticated. Whilst most sales still involve individuals selling their unwanted junk, treasures and collectibles to one another, ebay has spawned thousands of businesses, moreover large companies and multinationals have set up shop turning the website into the world’s largest global marketplace.

 

In the next few episodes of Boot Camp we’ll show you how to safely buy and sell goods on ebay, some of the tricks of the trade that should help you to nab a real bargain, sell your unwanted bric-a-brac and avoid the scams -- and there are plenty of those, but we begin this week with a broad overview of how it all works.

 

There are basically two ways to buy and sell goods on ebay. The most common method is to bid for or sell an item in an auction lasting between one and ten days (most run for 7 days) and the highest bid wins. The second option is ‘Buy It Now’, which is mainly used by traders and businesses and mostly involves new goods, sold at a fixed price.

 

Buying on ebay is free but sellers have to pay a basic listing or ‘insertion’ fee plus a commission (starting at 5.25 percent) based on the final selling price. Ebay seller’s fees are explained at: http://pages.ebay.co.uk/help/sell/fees.html. Winning bidders are notified by email and expected to pay the seller within a few days of the end of an auction. Payment methods -- chosen by the seller -- includ cash, cheques, postal orders, bank draft, wire transfer or ebay’s in-house electronic payment system PayPal.

 

Payments through PayPal are free for the buyer but the seller has to pay a transaction fee. It is by far the most secure and efficient method and the money is instantly transferred into the sellers account. It is also a quick and simple method of buying from overseas sellers and currency conversions are carried out automatically at the prevailing rate. 

 

In order to buy or sell on ebay you have to sign up for an account by clicking on the ‘Register’ link on the ebay homepage. It’s free and involves providing a valid email address, credit or debit card details and choosing a Username and Password. Powerful encryption handle the data so registration is at least as secure as any other type of online transaction.

 

Once that’s done you can buy and sell straight away. Nevertheless new users should spend a few minutes reading through the simple to follow tutorials by clicking the ‘ebay explained’ link, also on the homepage.

 

Understandably most buyers are concerned about what happens when the goods turn out to be faulty, not as described or they simply do not exist. Fortunately the vast majority of ebay sales go smoothly but in an auction the usual rules of the retail marketplace do not apply. Goods are bought and sold on the basis of trust and goodwill between two complete strangers, so remember the old maxims ‘buyer beware’ and if something looks too good to be true, it probably is!

 

Ebay has a range of measures to help protect buyers and sellers against fraud, (see this week’s Top Tip), and punish offenders but it’s obviously better to avoid problems in the first place and the best indicators of a seller’s integrity are how long they have been trading on ebay and the ‘Feedback’ system.

 

When an auction has ended and goods and money have changed hands participants are encouraged to award each other a Positive, Negative or Neutral rating and write a one-line testimonial. In this way buyers and sellers build up their Feedback and hence their reputation, which both parties can easily check. It follows therefore that an established seller or trader with several hundred positive Feedback points can be assumed to be more trustworthy than one with just a few sales and several Negative or Neutral ratings. This information is clearly displayed in the Seller Information box on every auction page along with the date they first registered. Legitimate sellers and traders take pride in their rating and will usually endeavour to resolve a dispute amicably to avoid receiving Negative feedback.

 

Next Week -- ebay Top Tips part 2 -- Buying

 

Part 2 3 4 5

 

JARGON FILTER

 

INSERTION FEE

Non-refundable charge based on an item’s Start or Reserve price. A basic listing for goods valued from £0.01 to £0.99 costs 15 pence

 

PAYPAL FEES

Charges for receiving payments through PayPal, on a sliding sale from 3.4 percent (plus 20 pence) on sums up to £1,500 to 1.9 percent (plus 20 pence) on transactions over £55,000

 

WIRE TRANSFER

Payments made through companies like Western Union. Money, once collected at the other end can be very difficult to recover in case of fraud 

 

 

TIP OF THE WEEK

Sales conducted on ebay are a legally binding contract, but between the buyer and the seller. Ebay offers only limited protection against fraud up to a value of £120 (actually £105 since there is a £15 processing fee). This rises to £500 if payment is made through PayPal, and there may be additional protection if the PayPal funds are sourced from a credit or debit card. For high value sales there is also Escrow, where payment is held by a third party, once the goods have been sent and the buyer is satisfied it is forwarded to the seller.

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