Silly people in HP calculator market...



#9

look it at:

http://cgi.ebay.com/Brand-New-Sealed-Hewlett-Packard-HP12C-HP-12C-HP-12C_W0QQitemZ5806136358QQcategoryZ50575QQrdZ1QQcmdZViewItem

amazing...


#10

They give HP calculator guys a bad name! This gives new meaning to shipping and "handling."

#11

So $52.00 for a new HP-12C. That's pretty close to retail, isn't it?

It's quite possble the buyer knew exactly what was what.


#12

Since I assume that sellers pay a percentage of the final sales price to Ebay as a listing fee (and shipping charges would not be included in this), isn't this seller simply trying to pay less to Ebay and maximize his take? Ebay probably tries to discourage this, but unless someone reports these sellers, they (Ebay) will never know.


#13

And why would you, as a buyer, want to do that? As long as the fees aren't hidden up front and sprung on you after the auction closes, what's wrong with paying 12 bucks for a calculator and 40 bucks for shipping instead of the other way around? The total's the same, either way.


#14

Howard Owen posted,


Quote:
what's wrong with paying 12 bucks for a calculator and 40 bucks for shipping instead of the other way around?

Depriving eBay of funds for the service it provides would ultimately kill said service.

That unethical seller is fond of saying, "If you don't like my FIXED and NON-NEGOTIABLE S&H fees, don't bid." I would say to him, "If you don't want to pay the agent his cut for the lucre he helps bring to you, don't use his services." There is no free lunch.

-- KS


#15

Chya, right. Have you sold much on eBay? They get you coming, going and hanging around. They are so not in financial trouble, they dropped five billion-with-a-b dollars on Skype last week.

But I guess you're right. Why don't you try reporting every seller you see on eBay who's shipping seems too high? How about turning in every mail order outfit that does the same? Impractical? Yes. Why? It's accepted business practice. Unethical? I don't think so. It's unethical to hide it from your customer. But if the terms of the deal are out in the open, the customer has the right not to enter into a contract to buy, and eBay has the right to slap the poor money grubbing slob of a seller down. They'll never do that because those sellers are their customers, and they already soak them for plenty.


#16

It's accepted business practice. Unethical? I don't think so.

I can't agree. Regardless of what we may think about eBay, that does not make it acceptable to cheat them.

Another thing to consider: do you really want to do business with a cheat? How do you know that they won't cheat you? How do you know that you are not being sold stolen property? What if there is some other problem; do you think that you'll get a refund of that "shipping and handling"?

It's better to be honest in your own dealings, and only deal with honest people. I haven't sold anything on eBay yet, but cobubba and other dishonest eBay individuals are on my blocked bidder list because I will never do business with them.[italic]It's accepted business practice. Unethical? I don't think so.


#17

I try to puzzle through ethical matters with a functional sense of right and wrong, instead of a strictly legalistic one. I try to figure out why something is unethical. I use other people's opinions of ethical matters as guideposts, not as holy writ. For me, it usually comes down to actual or potential harm coming to someone who is powerless to stop it from happening. So that's why sexual harrassment at work is immoral, for example. That's why "Thou Shalt Not Kill" as a practical matter is sensible ethics, and the "Shalt Not Covets" too. The latter lead to strain in unequal power arrangements. When those were read to me in my youth, (I'm using examples from my cultural tradition here, I hope it translates OK,) they left me cold, as did most of the proscriptions I was taught. It took some painful bumps and scrapes for me to realize that there was practical sense in all the shalts and shoulds.

For example, in this case, the customer would be harmed if the high shipping fee were imposed by surprise. The seller could reduce or eliminate that harm if adequate notice were given to the buyer. On the other hand, eBay could be harmed if the seller avoids the full auction ending fee. That seems simple, but there are complicating factors.

The balance of power between eBay and the seller is unequal. eBay has enormous power to shape the marketplace it provides. And that marketplace is hugely profitable, to judge by their quartely reports, stock valuation and the $3.5 Billion (plus possible $2 billion additional) they just laid on the barrelhead for Skype. The seller is a small retailer, or medium sized at best. He has limited choice for many of eBay's fees. eBay gets a cut coming, (insertion fees) going (auction closing price percentages and PayPal fees) and hanging around (various services like image hosting and listing aids.) The value proposition it offers in return is access to lots of buyers.

Fair enough, but in retail, margins are typically razor thin. Let's look at the fees a typical seller might pay to list and sell, what, a new HP-12C?

Wholesale price of calc -25.00

Auction Fees
------------------------------------
Bold Listing Fee -1.00
Buy It Now Listing Fee -0.25
Gallery Fee -0.35
Insertion Fee -1.20
Listing Designer Fee -0.10
Picture Fee -0.30
Scheduled Listing Fee -0.10
Final Value Fee -0.39
====================================
Total Auction Fees -3.69

Income
------------------------------------
Final price: 12.00 (FV fee is 3.9%)
Shipping & Handling 40.00
====================================
Total income 52.00

Post sale and prep
------------------------------------
PayPal Fee -1.56 (.03 * 52.00)
Actual Shipping -5.00
Labor to set up auction -7.50 (1/2 hr @ $13/hr)
Actual handling -3.25 (1/4/hr "" "" )
Shipping Materials -0.50 (Wrap and tape)
====================================
Total pre and post sale -17.81

Total cost of goods sold -46.50

Total profit 5.50
====================================

Now, if we reverse the auction price and shipping above, the final value fee becomes $1.31, an increase of $0.98 in the seller's fees. That represents a whopping 17.8% hit to the seller's bottom line. From eBay's perspective, the lost fee is 15.7% of the revenue they should have received.

Now, none of this directly speaks to the ethical issue. What it does do is to supply context to that issue. The seller, like most retailers, is struggling to make a profit. A 17.8% hit to his margin might well be the pebble that sends him underwater. If that happens, eBay loses, because it can't extract fees on a continuing basis from the bankrupt seller. And we the buyers lose, because we don't get to exploit, in the form of prices cheaper than brick and mortar retail, that seller's willingess to work for next to nothing.

So in a functional sense, who is hurt by this guy, the "poor slob of a seller" I called him above, shaving a few more points at the apparent expense of eBay? Assuming, once again, that the charge isn't hidden, and assuming that eBay's reputation system works to protect both the buyer and the seller from fraud, nobody! eBay could, without a doubt, institute a policy like "shipping and handling charges will not exceed the actual cost of shipping, and 5% of the item's auction value for handling." Why don't they do that? Once again, because eBay loses if the poor slob, living on a razor thin margin, folds his business. It's a delicate balancing act for them. They need to charge enough to keep the billions flowing in, yet not enough to ruin the retailers. I'm sure this keeps smart folks at eBay on their toes, at least five days a week.

So, "no harm, no foul" in my book.


#18

I think your calculation is highly biased in order to minimize the profit.
Let us look at the figures for a realistic seller:
- The price for a new calc may be infact 25$, no problem here. But why would this seller sell a new item with a starting price of 1$ - he should expect that potential buyers also know the price and won't go bid over the market price? A serious seller would probably offer a starting bid of 25$ with a buy-now option of 25$, to be sure to sell it for at least his costs. He might, for a modest profit, try to establish a price of 30$ - would be okay for me as well, if it is an uncommon item, or even try 50$ for a rare item. Or, if he really wants to sell it through an auction, set the starting bid to an amount that will grant a profit.

- You have artifically bumped up the auction fees with items I have never found useful for my auctions - if I have an interesting item, such as a rare HP calc, I can be sure it will be located by interested buyers, even without gallery, bold, and listing designer options. Besides, it is forbidden by eBay rules to shift these costs to the customer, so here is a first unethical part. It is solely the responsibility of the seller to choose advertising options - doing so is not unethical per-se, but trying to get that money back from the customer against the official market rules surely is. This is a difference to the common market where a seller certainly imposes his costs (for advertising, shop rent, storage, personal, etc.) on the customer. There are other market rules.

- There is no requirement to allow PayPal for an auction - if you do, then add it to the S&H costs (which this seller obviously did multiple times).

- Also, a serious power seller will not spend half an hour for designing a single auction page. Either he users upload tools, or predefined page templates or other means to reduce the labor. Thus, reducing the potential profit in your calculation by 7,50$, and even 3,50$+0,50$ for handling and shipping material does not look like professional mail-order operations. I'd believe 5,00$ for shipping, and maybe insurance - the postal services are unfortunately high.

To summarize: other sellers, even power sellers, manage to keep their costs below 40$ by far for a simple calculator sent in a booksize case, so he is unbelievable to actually for normal shop costs. People commonly call such practice rip-off.

Finally, it is not unethical of eBay to request all the fees, and surely there is nothing unethical in an unequal balance of power between eBay and the seller. Everything here is an option for the seller: the seller may choose whether to enter the eBay marketplace at all, which option he chooses for advertising, which starting price he requests, etc. He is nowhere forced to go to eBay at all (given your cost calculation, this apparently stupid seller would be even less successful in the real market (or he isn't as stupid).

OTOH, a buyer also has the option of not buying from a seller who wants to rip off customers in such an obvious way. So probably, two idiots have found each other. No need at least for me to join such a circle. This is what is actually meant by "unethical" - it does not match my own opinion of correct trading behaviour.

Holger


#19

It is perfectly ethical for the seller to do what he does. Ebay allows it.

Is it unethical for me to pay the absolute minimum federal income tax, by showing all my itemized decutions and such? What you are saying above would lead us to believe that it is "unethical" to minimize one's tax burden. It is a similar situation. The seller is minimizing his fee burden--and he is working within the system.

The point is, ebay has the discretion and the power to decide where to draw the line on "reasonable" shipping and handling charges. Since they allowed this auction, it is therefore legal.

That is That.

You-all that are trying to trump up the ethics issue are totally losing the point--that ebay can and will clamp an auction if it fails their criteria.

They did not clamp it, therefore it is legal. Period!


Edited: 20 Sept 2005, 10:02 a.m.


#20

Short and sweet.

#21

The numbers I quoted aren't exact. I have no idea what the wholesale price of a 12C is, for example. The fee structure was taken from one of my own auctions, so I'm the "stupid seller." I did assume that the sale was fixed-price buy-it-now, which doesn't seem unreasonable. PayPal is optional in the way lots of things that attract customers is optional. At any rate, neither fee is a huge part of the final cost of goods sold.

But, let me repeat, none of that speaks directly to the ethical issue. It just sets the context. Trying to be as succinct as Bill Platt below, I think that context is "Retail margins are thin, and eBay fees are high." Now, to the meat of the ethical issue, for the last time, the buyer is not harmed under any theory of real damage, and I don't count a sense of outrage as such. eBay might be harmed, or it might actually be more in their interest to allow this sort of thing. In either event, their fee structures encourage this sort of optimization on the part of sellers. Also, either way they could suppress this behavior with policy and/or technology and they don't. They therefore don't appear to think they are being harmed, and they are in the best position to make that determination.

In my functional ethics, no harm == no ethical problem. Q.E.D.

#22

So in a functional sense, who is hurt by this guy, the "poor slob of a seller" I called him above, shaving a few more points at the apparent expense of eBay?

Aren't you overlooking one small detail?

Since the sale price is $12, that's also the refund price if the buyer has to return it for any reason. Suppose it is DOA? Suppose it turns out that he bought it as a gift, and it turned out that he was supposed to get a 12C Platinum (yes, I know that people here would consider a 12C to be inferior, but you know what I meant...).

I don't know if the package was insured; if it was, then if the package is lost or crunched by the postal orifice then $12 is all the buyer gets.

Now, these all may be unlikely; but the fact is that something is being taken from the buyer when the sale is formulated in this way. The priced value of the item, which represents value to the buyer, is reduced.

I agree with the comment that one cretin found another; and the one is the other's proper prey.


#23

I did overlook that detail. Of course, every eBay seller I have ever returned an item to refunded the shipping (both ways) too. It's a "what if" in this case. If the seller refused to refund that charge, I'd call that unethical.

As to insurance, what the seller charged the buyer for shipping and handling and what the shipment is insured for are two completely separate quantities. UPS automatically insures up to $100.00 in value, for example. The seller would have no reason not to insure for the total charge amount, since paying off in the event of loss wouldn't come out of his pocket. And he'd have less chance of negative feedback if the buyer got a full refund.

In fact, all these hypotheticals ignore the eBay reputation system. If a seller screws enough buyers, their reputation gets shot to hell, and at best they have to start over with a clean slate, for which trick eBay really will slap you down if you are caught at it. But assuming the seller successfully starts a new account, he then has to build up a positive rep with that account. That can't be done with phony $.01 auctions alone. (I know I'm not alone in actually reading a seller's feedback and looking at the auctins that generated a sample of the feedbacks.) So that means the seller has to treat a couple hundred customers right before screwing 10 or so and starting over. And then there's the risk of getting caught again. Aren't your suspicions starting to rise at this scenario? Doesn't it strain credulity a little? Isn't it simpler to assume the seller will not screw his customers?

What is it about this guy that really ticks you off? You can try to construe this or that element so some harm comes to the "stupid" buyer, but I haven't heard anything that convinces me that anyone is hurt in the slightest. Is it making a profit from the sale of a calculator that annoys you?

#24

Notwithstanding Howard's tedious accounting and long-winded essays, here is the excerpted official policy from http://pages.ebay.com/help/policies/listing-circumventing.html:

Quote:

Circumventing Fees

Users may not use systems or techniques to circumvent, or avoid, eBay fees.

Some Examples

Unreasonable shipping or handling costs - Listings with low prices but unreasonably high shipping or handling costs.

Why does eBay have this policy?

Listings that circumvent (avoid) fees may provide a poor buying experience and always unlevel the playing field by putting sellers who pay all their eBay fees at a disadvantage. Further, these listings undermine the trust and legitimacy of eBay’s marketplace.


So there!

Bill Platt stated,

Quote:
The point is, ebay has the discretion and the power to decide where to draw the line on "reasonable" shipping and handling charges.

... ebay can and will clamp an auction if it fails their criteria.


True -- but only if they know about it beforehand.

Quote:
The seller is minimizing his fee burden--and he is working within the system.

Since they allowed this auction, it is therefore legal.

They did not clamp it, therefore it is legal. Period!


False! eBay doesn't have the resources to validate and pre-approve every auction listing. Someone must inform eBay of a listing that violates its policy for them to terminate it. Consider the cancelled eBay auctions for body parts and memorabilia of infamous crimes.

-- KS

Edited: 21 Sept 2005, 12:39 a.m.


#25

Yup, you got me pal. *cough* It's gettin' dark... (Bugs Bunny would know how to handle this.)

That's the legalistic approach to ethics. You are pointing to the writing, and ignoring the actual effect of the the actions it proscribes. I still haven't heard a refutation of any of the points I made about harm to the buyer, or harm to eBay.

So, I'm not convinced. But I'm happy to leave you with your interpretation of the situation. Good night.


#26

"This means War" - Bugs Bunny (one of my heroes.)

DW

P.S. Pf course, one can adopt the pose and motto
of Soldier Of Fortune magazine: "Kill 'em all;
let God sort 'em out..."

Then there's the Roman viewpoint: "Caveat Emptor"

I am definitely a "Let the buyer beware", sort of guy myself...

Edited: 21 Sept 2005, 3:03 a.m.

#27

Quote:
You are pointing to the writing, and ignoring the actual effect of the the actions it proscribes.

Whatever the heck that's supposed to mean, unless the "actual effect" is that eBay receives the revenue to which it is entitled according to the specific policies and fee schedules by which the sellers agree to abide. The sellers, BTW, are not under any duress to participate, and collectively make much more money than eBay.

Ever wonder why almost all eBay sellers of HP calculators charge actual or near-actual shipping costs? Buyers consider it sleazy to do otherwise. If notified, eBay would quite likely have put the kibosh on that auction for its S&H demands, citing breach of agreement. In other words, bad ethics.


Quote:
I still haven't heard a refutation of any of the points I made about harm to the buyer, or harm to eBay.

There was nothing to hear. Only text that one is asked to read open-mindedly and to understand has been presented.

I'll refute your financial analysis, though: Most sellers of calulators worth $50 did not acquire them at $25 for the sole purpose of flipping them on eBay. They may have bought them long ago for college and no longer use them; they inherited them; they picked them up as surplus for a song. With a wholesale cost of essentially zero, it is not necessary to tack on exorbitant and bogus fee-evading surcharges in order to make a decent profit on the sale.

The same is surely true for other items sold on eBay, even the big-ticket ones that make the majority of the profits -- the wholesale cost was very low, or essentially "sunk".

Quote:
So, I'm not convinced. But I'm happy to leave you with your interpretation of the situation. Good night.

What other rational interpretation is there?

-- KS

Edited: 23 Sept 2005, 4:01 a.m.

#28

I just received a 1983 12C from California here in New Zealand, posted in California last week, via usps Global Priority Mail. Postage was eleven dollars!!! Came in an enormous box too - about A4 size and 2 inches deep. I recommend hpgoodies on ebay as a seller. Also have another on the go from the USA but the seller asked for $80 for postage!!! That actually may be a valid rate via DHL as courier or something, but I told the guy Global Priority Mail will do :-)


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