(Originally blogged November 2, 2008)
In the early 1980s I paid for my university education by being a ‘picker’ – an antiques industry term for a middleman who scours thrift shops and garage sales and then flips those items at a reasonable profit to antique dealers for resale. In those days there were scads of mid-century modern vases and kitchenware, trunk-loads of vintage clothes, and stacks of old magazines to buy.
In the late 1980s a longtime antiques dealer told me that the antiques and collectibles market was about to explode. It had been the fad in Europe for many years to be a collector of something – anything – it didn’t matter. North Americans were just getting into collecting and the trend would grow as the baby boomers entered middle age
Throughout the 1990s North Americans did start collecting, and in a big way. On a trip to New England in the autumn of 1989, from the Maine coast down to Cape Cod, my partner Kenn and I spent two weeks doing nothing but visiting antique stores, finishing off with a two-day visit to the Brimfield antique market in the heart of Massachusetts. Our station wagon was so packed for our return home that I couldn’t see out the rear view mirror. A return trip to New England in the spring of 1991 shocked us as prices had doubled and stock was half of what it had been in the same stores and markets we had previously found fabulous deals in less than two years before. We partly blamed Martha Stewart’s new magazine that was highlighting the latest hot collectables; jadeite glassware, McCoy vases and polka dot Pyrex. There had always been a market for these items but now the baby boom generation were diversifying their investments through the genteel pursuit of collecting.
Meanwhile, in the tech world, the Internet was just starting to become a popular home service for computers in the early 1990s. For those wanting to undertake family ancestry research or access porn without the embarrassment of going to an adult bookstore, the Internet was a useful tool but its potential as a marketplace was still untapped. Then in September 1995 Pierre Omidyar, a French-born entrepreneur living in San Jose, California, married the potential of the Internet to the trend in collecting, and created the first online auction site – eBay. The early rumour of it having been created to trade Pez dispensers to aid his girlfriend’s growing collection was made up by marketers to attract media attention.
During the summer of 1997 I first heard about eBay in hushed tones at antique markets. The very first site I visited once I got Internet service in March 1998 was eBay. For a quarter you could list anything you wanted and a week later you had a high bidding winner and before you knew it, you were in business. I instinctively felt this would become a huge market but would be successful for only a limited time. I felt that once everyone realized the potential, the whole market would become bogged down with junk and saturated with copycat selling sites.
The early days of eBay had few sellers and not a lot of merchandise, which meant hungry buyers would slap a bid on practically anything. Wade figurines (those little brown china animals that came as premiums in boxes of Red Rose tea in the 1970s and littered Canadian garage sales at a quarter a piece) could sell for anywhere up to $20.00 U.S. Amazingly, trite collectables often sold better than high-end antiques and the favourable U.S. exchange rate and low Canada Post shipping costs made online selling very profitable.
Honey – Does this kettle make me look fat?
The number of sellers on eBay at the time was surely not more than a few thousand, and most of us were part time garage sale junkies who had real jobs in the real world. Most of what was being reported about eBay in the media was positive. Headlines reinforced the idea that eBay was a great opportunity for housebound entrepreneurs. Humorous and bizarre tales of eBay sale items often made their way into the news over the next decade: the teenager who sold his virginity; the human liver, the ghost in the bottle, the nude guy in the tea kettle picture, Jenny’s phone number ‘8675-309?, the grilled cheese sandwich that looked like Jesus . . .
A number of copycat sites did spring up in the early days but ‘eBayers’ were loyal and there wasn’t enough room in the market for other sites to hone in on the auction action. Riding the wave, Pierre Omidyar, and his Canadian-born partner Jeff Skoll, hired Harvard Business School graduate Meg Whitman to take eBay public. The second worst financial mistake I ever made in my life was not buying eBay stock but as the company didn’t actually produce anything I failed to see its investment potential. By the end of 1999, the stocks had been split and re-split – I had missed the eBoat…. Nevertheless, eBay was getting good publicity and sales and new buyers were showing up every day.
In 1999 I quit my day job, took a stock-buying vacation and settled down as a full time ‘eBayer’. Those of us who were selling on eBay at the time wax poetic about the good ole days – this was the golden age of eBay when stock was cheap and plentiful, sales were brisk and profitable and costs were upfront and reasonable. There were some bad eBayers but the feedback system educated other users who the bad buyers and sellers were and the worst buyers you could get were those who didn’t send you a money order for their purchase.
However, the realities of eBay becoming a corporation started to become evident as the friendly, folksy atmosphere that had been the eBay community slowly dissipated. The first signs of a corporate mentality became evident when the humorously worded emails from HQ were no longer humorously worded; the helpful staff members you could email or phone still worked at eBay but their phone numbers became unlisted and their emails were changed. The only time you heard from eBay employees now was when you did something wrong, and the rules about what you could and couldn’t do were becoming prodigious.
International branches were set up in Germany, France, Britain, Canada and Australia, but negotiations to include these satellites required adherence to various national laws. For example, Germany and France had laws banning Nazi insignia resulting in eBay barring the sale of any World War II material that sported the swastika. This development was sprung on militaria dealers with a couple of week’s notice. Needless to say the last minute dumping of merchandise was spectacular. International bans on the trade of products made from endangered species were carefully adhered to as well – eBay even surpassed the rules by banning species that were similar but not endangered and included antique items that did not fall within the international dictates.
In an effort to stem complaints of selling counterfeit items, eBay created the VeRO ‘Verified Rights Owner’ program for protecting intellectual property rights. Anyone holding rights to a copyright, trademark or patent could become a member, claim a violation and have an auction shut down with no proof or dialog with the seller. Essentially if caught selling a Louis ‘Fauxton’ bag, you were guilty until proven innocent and the only evidence to prove the item wasn’t contravening intellectual property rights was an original bill of sale from an authorized dealer or outlet. Claiming itself as only a ‘venue’ eBay absolved itself of any responsibility and did not take on the role of mediating or educating users. Chanel, Disney, Rolex, Tiffany, Hermes and the owner of the phrase ‘Shabby Chic’ often made lawsuit headlines but ironically, these companies rarely policed eBay auctions. The eBay strategy was to rely on eBayers to fink on fellow eBayers, creating tattle telling and e-rages between users.
One day, one of my listings for a dime store novelty ‘floaty’ pen from the 1960s featuring an inch tall naked woman whose swimsuit fell off when the pen was turned upside down was finked on by a Puritanical ebayer. The pen was removed from a collectable category for being too salacious and moved to the newly created ‘adult’ category, as were all items considered too carnal (short of a baroque painting.) For a brief time shoes could not even be modelled in bare feet! However, the rules were not consistant or finite – underwear being modelled for the purpose of soliciting high bids is still common on eBay. It is the inconsistency of the rules that has always been the most frustrating. Crocodile purses could, then couldn’t, then could, then couldn’t, be sold. I think they are back to could again…
Other changes in policies began to lead to the first rumbles of discontent from eBay users: any reference or links to outside websites were forbidden and chat boards, where eBayers could supposedly communicate freely about issues with other eBayers became tightly monitored by eBay ‘pinks’ (a derogatory reference to eBay officials whose censorial postings appeared with a pink coloured bar.) Chat boards that were at one time a helpful resource became cesspools of name-calling and ridicule because of eBay’s policy of tattle telling. More than one group of eBayers created their own off-site chat boards where they could talk freely and promote their sales without eBay retribution. Despite these growing pains and growing discontent, the bottom line was that sales were strong, the stock values were exploding, and eBay was a household name. Then came 9/11.
Like most of the world eBay came to a near standstill for the week following the terrorist attacks. Sales had been booming in the weeks previous to September 11, 2001 but they now dwindled. In 1999 a computer breakdown put eBay out of commission for the best part of a week and the company’s stock plummeted as a result. This time, there was nothing to do but spin the situation to make eBay look like a caring, patriotic organization. A charity called Auction for America was launched to raise a hundred million dollars for the victims of terrorism. The idea was that eBay wouldn’t charge any fees for items donated to raise money for the charity but, having been conceived in haste, there were huge flaws with the plan. The seller had to foot the shipping costs to the buyer and the only form of acceptable payment for the charity auctions was Billpoint, the newly created eBay online payment service that had just been launched. For failing to wrap the transparent business motivation well enough in a charitable blanket, the company became an international joke. Few sellers offered anything of real value for sale and the embarrassingly under-publicized final amount barely topped eight million when the campaign was kyboshed three months later.
By early 2002, the company was rallying and an advertising campaign stepped up eBay’s presence in magazines and television. In one television spot, middle-aged suburbanites danced around in grey sweat pants singing the virtues of eBay, where you could find anything for a bargain. However, eBay wasn’t founded as a place for bargain hunters, it was created to access new markets. The powers that be at eBay were no longer concentrating on unique antiques and collectables; they were courting manufacturers to blow out overstocked mass-produced merchandise at discount prices. Collectables categories became inundated with huge numbers of new products, listed in multiples, making finding authentic items arduous. Gold watch chains, for example, suddenly went from a few listings per week to hundreds of listings per week, burying the real Victorian gold watch chains amongst the hundreds of Victorian style gold plate watch chains. The Journal of Antiques and Collectibles noted in April 2004 that antiques and collectibles represented sixty percent of eBay’s gross merchandise sales in 1999 but had plummeted to only thirteen percent by 2003.
In an attempt to rekindle the community spirit, eBay created focus groups to help target markets and answer user complaints and suggestions. I was asked to serve on a vintage clothing committee to define categories and time periods as well as give a workshop on the topic. I resigned after three meetings. The company did not listen to any of my concerns or suggestions and since I wasn’t being paid I really didn’t want to also be ignored! For my service I received an eBay T-shirt that I promptly resold on eBay for $18.00.
Meanwhile, the cost of doing business on eBay was steadily rising. Sellers complained but increases were always cleverly hidden or implemented in small doses to keep the outcry to a minimum. Listing an item on eBay used to be simple and cheap but over the years ‘optional’ features kept being added. If you wanted to compete for sales amongst the growing sea of sellers you had to consider using at least some of the features some of the time: pictures in a gallery, a ten day auction, setting a reserve or prix fixe, highlighting, featuring, second line titles… Little charges here and there added up, as did listing and final fees, as well as accepting credit cards through Paypal, the online payment service bought out by eBay to replace their failed Billpoint. Not all the cost increases were eBay’s fault. Postal rates skyrocketed – a half kilo (one pound) parcel to California from Toronto cost about $6.00 in 1998 and $21.00 in 2008. However, finding affordable stock became the worst problem. The ubiquity of eBay meant that everyone was using eBay sales results to set market prices – even in thrift stores and at garage sales.
The other problem were the ‘two percenters’ – no matter how much diplomacy and tolerance you employ there will always be two in one hundred people you just can’t get along with. Two-percenters complain, demand, bounce cheques, suffer from buyer’s remorse, and lie to get their own way; the worst two-percenters omit damage reports, refuse returns for valid reasons and even exhibit criminal behaviour by selling fake merchandise. The worst I experienced was a fake charge-back for $600 from a slippery lawyer who found a loophole in the proof of delivery system by playing off paypal and his credit card company against each other. I put an end to it by calling the Los Angeles legal firm where he worked and asked the senior partner if it was custom for his firm to hire criminals… The problem was resolved within the hour. (added March 2019: apparently this lawyer was well known in the antiques community. He eventually committed suicide and his collection of Napoleonic items was resold at auction to pay for some of his debts.)
By 2004 the favourable exchange rate with the American dollar (my largest profit margin) was beginning to slide. However, according to company statistics, there were millions of users on eBay. Really? Everyone I knew bought and sold with different identities, some even had third identities for posting on chat boards and less scrupulous sellers used ids for bidding on their own items (an illegal but not uncommon practise called shilling). Then there were the users who registered with eBay at the beginning, bought something and never went back. Hundreds of thousands of identities sat idle and hundreds of thousands more were duplicates but they all counted as unique eBay users.
The stürm and drang and shrinking profit eventually got to be too much. We stopped selling full time on eBay during 2004. The golden age was over. It was now a struggle to get steady good sales and the increased cost of everything meant you couldn’t waste time on $20 or $30 items. It took, on average, almost an hour to find, prepare, photograph, list, answer e-mails, pack, ship, and account for each and every item put up for sale. One person could deal with about 50 items per week as a full time job; Kenn and I pushed ourselves, frequently listing up to 200 items per week for nearly six years. We did extremely well in the first three years but by 2002 the profit margin was dramatically shrinking due to the increased cost of everything from purchasing goods to Paypal service fees. By 2004 we were making less than minimum wages. There were items that sold well like a hockey puck found at a garage sale for 25 cents that sold for $75.00 and an oil lamp sold on commission for $1600.00. But there were duds too like a massive load of vintage clothing that had undisclosed problems from the person we bought it from, and for which we only broke even on the hard costs.
The ‘eBay factor’ shifted the antiques and collectables business in its first decade of existence. Some markets, dolls for example, plummeted in value due, in partl to over-availability while other markets, such as vintage clothing, exploded by bringing buyers and sellers together who would have never met. The result is a shrinking local antiques market. Two years ago we took a side trip to Binghampton New York’s antique district (as advertised by highway road signs), but when we got there we discovered only a few shops remained in business. The owners I spoke with blamed customers who preferred to shop from home on eBay for their collectables. Even though as anyone who buys regularly on eBay knows, a lot of purchases are disappointing. Items arrive with damage not disclosed in the listing, there are downplayed condition issues and up-sold quality, as well as the carefully positioned photographs that shadow visible damage. Some collectors are returning to the shows and sales, antique markets, and auctions where items can be handled and inspected before purchase.
An announcement from eBay in early 2008 told of the imminent dismantling of their feedback system – the final front of protection for sellers and buyers to warn others of problems with transactions. Long time sellers looked to move to other auction sites or open their own websites. Meg Whitman had seen the writing on the wall and took leave in March 2008, ending her ten year run at eBay. According to Forbes magazine, traffic had been falling since 2006 and by 2008 was 11% lower than it had been two years earlier. Meg’s replacement decided that to boost stagnant revenues, eBay would impose a price restructuring that in reality was a hefty price increase for eBay sellers. It was clear that eBay was out of touch with its users. In fact it made you wonder if anybody who worked for eBay actually ever bought or sold anything on eBay!
I had endured all the changes over the years and by March 2008 had nearly 7,000 feedbacks with an average 99.8 % of them being positive (the .2% negs I received were almost entirely retaliation feedbacks from bad buyers and sellers.) However, almost exactly ten years to the day that I first signed up with eBay the last straw came for me when I was cheated out of $45.00 for the last time by ‘JungleJane’ – a seller in San Diego who strung me along and lied about not being able to send my purchase because her mother had died. A fellow dealer contacted me after she heard ‘Jungle Jane’ boasting at the LA flea market about how she had stiffed her eBay buyers and was reselling the items. I relayed that information to eBay but they would not do anything. I was fed up with eBay protecting its criminal element of users even though they swear they are only a ‘venue’, an argument that is being increasingly challenged in court.
Today, eBay is an inaccessible multi-national out-of-touch fortress corporation that protects its bad users and dismisses its good users; the site offers too much junk for sale, has high costs, dwindling numbers of buyers and no effective feedback system. So is this article just sour grapes? Perhaps, but I knew it was too good to last… I should be happy I was there when eBay was at its best.