Selling tech on eBay. How risky?

[0eeours]

I apologize in advance for the length of this post. I'm hoping a few of you will have the patience to read it through and respond with something other than "TL;DR." If you don't want to read the intervening text, the gist of my questions can be found starting in the fourth to last paragraph below (the one beginning "Based on advice ...").

I created my eBay account in 2005 and since then have concluded over 300 purchase transactions on the platform. I've never sold anything, and have only ever had one account, which is the one I'm posting this message from.

Last year my full-time job was cut and I wound up retiring, although several years earlier than I'd intended. I've been looking into possible sources of replacement income, including selling on eBay part-time. I have reasonably good tech knowledge and skills, and decided I might be able to make a profit by buying up desirable "parts and repair" computers on eBay, refurbishing them, and reselling them, also on eBay. I also have personal property that I'd like to start selling, some of which is also tech.

In the past six months or so I've purchased several "distressed" computers on eBay, having reviewed selling prices and only buying units that I think I can at least double my money on before expenses such as shipping, handling, various eBay and PayPal fees, and taxes. Most would probably be priced for sale in the range of $200-600.

However, I made the mistake of gauging the risk of selling this kind of gear on my own behavior as a buyer. I fully and carefully read descriptions, ask questions about anything unclear before buying or bidding, advise new sellers on how to package fragile items to minimize risk of shipping damage, and work calmly and respectfully with sellers to sort out any after the sale problems that might occur. Over the years, I've left four neutrals and two negatives out of 312 feedback and only once invoked eBay's MBG in a case of a dramatically misdescribed computer where the seller wouldn't communicate with me. I've found the vast majority of sellers to be honest and reasonable people.

Before starting to sell, I thought I might learn more by reviewing the selling forum, and it's been here where I first heard about the kinds of problems that sellers have been experiencing with buyer fraud, including the fact that tech is a frequent target of fraud and abuse. Horror stories I've read include the buyer claiming SNAD and then returning an old, non-working substitute for the working item they were sent, returning the item missing critical components, returning a brick, or returning an empty box. In almost every case described, the seller winds up paying for shipping (twice) and FVFs and, if they're lucky, getting a broken or incomplete item returned to them.

I'm having a hard time envisioning myself spending hours troubleshooting, repairing, cleaning, and testing a computer, carefully packaging it for safe shipping, and then winding up paying to have someone steal or vandalize it, with no recourse other than involving law enforcement. Assuming I create a new eBay account for selling, as I've seen recommended, I'd be starting out with no feedback, which would probably make me even more of a target for scammers.

I've been trying to come up with a revised plan that lowers risk and still has some prospect for success. Selling locally for cash isn't a good option because where I live, the market for the merchandise I've purchased just isn't big enough. That's especially true for the spare parts I'd intended to sell as part of my plan to achieve reasonable profits.

Based on advice I've seen here and elsewhere, before trying to sell whole computers, I should start with lower value items (well under $50) until I build up some feedback and experience selling. Also, I should resign myself to the fact that some sales will be a total loss, and that I should self-insure against such instances by raising prices.

But here's where my confidence is low. I have no idea what percentage of tech buyers on eBay are scammers, and it seems eBay doesn't release any data about fraud on the platform. Without some sense of the occurrence rate, how do I know by what percentage to raise prices to compensate? If any experienced sellers of tech have read this far, what have you encountered lately regarding buyer fraud and abuse? How prevalent is it? What actions do you take to protect yourself against fraud?

To give a sense of my likely activity level, I would expect to be a low-volume seller. At some point, assuming I qualify, I'd probably set up a Basic Store in order to take advantage of the lower FVFs for stores in the categories I'd be mostly selling in (6.15% and 4% instead of 10%). Once established, I wouldn't expect to have more than about 50 items listed at any one time, with the bulk of those being parts, and at most five being full computers.

Thank you. I have a bunch of other questions about selling, but given the length of this post already, I'll save those for another day.

[18704d]

"I'm having a hard time envisioning myself spending hours troubleshooting, repairing, cleaning, and testing a computer, carefully packaging it for safe shipping, and then winding up paying to have someone steal or vandalize it, with no recourse other than involving law enforcement"

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How about, to lower risks, and learn how this customer base behaves(?)

perhaps try.. buying a couple computers.. and instead of refurbishing them to sell as complete funcitonal units...

instead part-them-out, one piece at a time .. at a hefty overall profit?

That way you can start small.. simply selling motherboards, RAM, and other parts.

?

Lynn

[smenkveld]

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@0eeours wrote:
In the past six months or so I've purchased several "distressed" computers on eBay, having reviewed selling prices and only buying units that I think I can at least double my money on before expenses such as shipping, handling, various eBay and PayPal fees, and taxes. Most would probably be priced for sale in the range of $200-600.

Your going to go broke if you think that your going to make any money by doubling your money before expenses. At the very minimum you have to at least double your money after all expenses and you really need at least 10 times markup to make it worth while.

[sidemouse]

I've tried what you speak of, the problem with distressed machines I found... Some are easy and simple enough to fix, but with others it's one problem after the next and it doesn't take long before something slips out the door where the real problem only shows itself after it arrives at the buyer's location...

I don't think the risk was so much in ways of scamming buyers, that fortunately I didn't see much of. 

But long story short, awful thin profit margins.

I think I'll stick to small engine parts and repairs, which that's an awful tricky razor thin profits line of work too... Granted there is money in it all (computers, weed eaters, chainsaws, doesn't really matter which) but it takes some time to narrow down a good line of products in all of that.

You never know, you might find out eventually that you were born to be a RAM salesman, or maybe graphic cards are your specialty, or maybe a little of everything or even something completely unrelated.

What I'm saying is you will want to play with it and figure out where to go as you make progress, mostly it takes a bit of a while to carve out that niche (the corner of the market you want to be in) before it's all over, so take it easy and good luck.

[fashunu4eeuh]

Hello, welcome to the Selling board. First, i would use this account to sell and open a new account for buying and posting. This way you take advantage of having a nice feedback number already. This will help prevent you from appearing to be a first-time seller target. Anyone who investigates your feedback can see the number of transactions are based on buying but you are not claiming anything different. The hope is the scammers will pass you by on their way to another newbie with low to no feedback. 

Second, you are right to start small and work your way up to higher dollar transactions. I would go ahead and list a few items to get the feel of the platform. You are very well spoken and have done your homework, i think you will do well here. I don’t sell tech but i have found that buyers who spend at higher price points are very honest and i have never had an issue with one in nearly a decade of selling. Most buyers are honest and just want their item in the condition as described in the listing, delivered in a reasonable timeframe. It pays to be cautious but keep in mind that the majority of transactions go off without a hitch. The problems you read about here on the boards are the exception rather than the rule.

New sellers may find they are limited in quantity and dollar amounts on what they can sell when just starting out. And PayPal may hold your payments until the item shows as delivered. As time goes on and you get more sales under your belt, those limits are raised. 

Last, I would wait to open a atore until you are passed the new seller limits and can list a quantity that makes having a store financially feasible. 

Good luck to you moving forward, please come back to the boards anytime you have a concern or question.

[mikeystoyz]

Selling tech on ebay, on a scale of 1 - 10 I would say it is right around an 11.  Honestly, you will have broken stuff 50 percent of the time.  You will have buyers disappointed about 50 percent of the time and you will have SNADs often.  Not kidding either.  That all being said, there are things you can do to protect yourself and knock it down to about 30 percent.  I sold tech years ago and when people are happy they are very happy, when they are sad, well, you know the rest of the story.  The heavier the item, the more likely the SNAD.

[mr_lincoln]

@0eeours  Really high priced stuff you can always try Local Pick up and accept cash only.

Risk is simply that, risk.  If the refurbished computers are not the latest and greatest then there is a better chance of avoiding scams.

Scammers come in all shapes and sizes, the Partial Refund scammer, the Full Refund scammer who sends you an empty box return then either keeps the device for their own use or turns around and sells it themselves.

You might investiage eBay's Classified Ads whereby you might be able to offer repair services.

I would start by selling your personal items that you mentioned which will allow you to learn the ropes on the selling end of things.

[gracieallen01]

Personally, I think you should consider who buys what kind of computer.  Is it someone that just ones a good working 'puter and can go down to Costco and get one or is it some 'person' who wants a gaming or video machine and will scrounge parts to make one that will be 'just to their liking'?

At the end of that consideration, who are you going to be selling to and what kind of problems might you have with them? 

Bottom line is that ebay may not have mandatory returns, but, they do have mandatory refunds.  (So, how much can go wrong with a used system?)

Oh, you will NOT find any stats for types/reports of fraud.

[luckythewinner]

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it seems eBay doesn't release any data about fraud on the platform

The entire problem with third party transactions is that when a sale goes south, eBay has no idea if the buyer is defrauding the seller,  or whether the seller is defrauding the buyer.

Without some sense of the occurrence rate, how do I know by what percentage to raise prices to compensate

Raising prices makes your items less competitive and would impact your sales. IMHO you should be asking "am I making enough profit to absorb that level of fraud"?

If you are making $25 per item in profit and fraud is costing $25 per item, I would argue you would need to reduce your costs by $25 - not raise your prices by $25. 

[0eeours]

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@18704d wrote:

"I'm having a hard time envisioning myself spending hours troubleshooting, repairing, cleaning, and testing a computer, carefully packaging it for safe shipping, and then winding up paying to have someone steal or vandalize it, with no recourse other than involving law enforcement"

---------

How about, to lower risks, and learn how this customer base behaves(?)

perhaps try.. buying a couple computers.. and instead of refurbishing them to sell as complete funcitonal units...

instead part-them-out, one piece at a time .. at a hefty overall profit?

That way you can start small.. simply selling motherboards, RAM, and other parts.

?

Lynn

---

Thank you, Lynn. I have considered that, and the profit margin would be higher. As you say, it would also give me an initial sense of how buyers behave. However, I wouldn't want to do that long-term. The diagnostic and repair work is interesting and intellectually challenging. I would find it really boring to just disassemble everything into component parts. and sell them. Furthermore, I don't have the room to store lots of parts.

Since I'm buying computers that have problems, I can't necessarily be certain which parts are functional until I figure out what's wrong with the whole machine. Especially with laptops, testing parts by substituting them into known working machines can be quite time consuming. I suppose I could repair the computer, fully test it, and THEN part it out, knowing all parts work. That strikes me as an odd way to proceed,  but it might just be a practical approach.

I believe in reuse and keeping tech items out of landfills as long as possible. It's true, of course, that providing parts for others to repair their computers also helps to extend the usable life of machines, just not the ones I've purchased. In fact, one parted out computer could potentially save multiple computers from being discarded, so maybe that point isn't really an issue.

I need to think about the proper balance between parting machines out vs repairing and selling them whole. That may be the key for making this work from a risk perspective, a profitability perspective, and a "meaningful work" perspective.

I suspect there is still risk of buyer fraud in selling parts. For example, if I sold a working display assembly from a laptop computer, the buyer with a cracked display could install my working one on his computer, then claim that it arrived cracked and send me back his old one. But the loss would not be as great, either in terms of time or money, as if that occurred with a fully refurbished computer.

Thanks again for your suggestion.

[futuretomorrow]

I called eBay about this category yesterday morning due to at least 1 confirmed scam and a potential other in the past. When those happened, I had about 10 other listings in electronics and I pulled them all and never sold in that category again. I was already very aware of the fact this category carried significantly higher cases of fraud than others. Prior to 2014, I never had a problem in this category. Not 1.

The conversation with eBay left me with little to no confidence I should sell the items I "was" considering here. Zero. 

What most sellers may not know and I just found out yesterday is that to stand a chance of even remotely winning a false case against you all 12 photos must be utilized. Your description needs to be bullet proof. The way the CSR was describing the process left me with the feeling you'd be recreating something close to the devices original documentation and physical booklets and even then there is very little guarantee you'll win a case, especially against a scammer who's been doing this for awhile and knows their way around the ship.

Side note: The 12 photos are not enough when you have a Mac Pro for example that's been so heavily modded, the SSD's and ram alone would take up all 12 photos. One of the machines I'm thinking of as I type this has 6 SSD's in it and 4 sticks of ram. That's already 7-10 photos or more. So there's only 2 photos left, that won't cover the other custom parts, extras, video card et al. 

If I were to take eBay's advice verbatim? I'd need at least 32 photos to properly document just a single computer. As is, any smart scammer can say "oh wow...he didn't photograph the serial number on that $700 video card? Got yah!"

How big of a problem is this category? The CSR said several times "Well I don't mean to scare you but...", in addition to confirming without quantifying the extent that this category is extremely problematic for eBay right now. "Extremely" was his word choice, not mine.

When I hear someone say "extreme" or "extremely", I think of those sauce charts that tell you how fiery you can get your food and "extreme" is always pretty close to "you may need the paramedics", right under "this could be your last meal on Earth. Just saying".

So...

• I'm not selling the items here and suggest you don't either but this is just my opinion and you seem beyond apt enough to come to a conclusion that works for you and your situation.
• While the CS advice might have calmed down a noob or one with less experience, I found a major flaw or 2 in the advice they gave me. The buyer can still hold their false claim position and "he said, she said" cases usually don't end well for sellers. I have seen exceptions no doubt, but in general, the buyer wins these. 

• eBay isn't consistent in how they rule these cases and in all honesty shouldn't be because most cases if not all have unique details. While we have to accept this reality, it's not ensuring or a confidence builder.

• It really doesn't matter to what greater extent this happens or not because anyone can be the unlucky victim and if one plans to sell in this category specifically, it's not realistic to think you'll skate by without problems. If the problem is already at a level where we're doing extensive research, posting questions on discussion boards and calling eBay, I think we already know how bad this is and we're simply in denial of the obvious.

Using pickups is the only protection apparently but you stated before your area isn't great for this type of merchandise. 

[retrose1]

OP, I have been selling on ebay for 15 years, I have kept up with ebay policies and advise others on how to sell and how to avoid scams and I sell in one of the most problem categories on ebay........

And I would NEVER, EVER list any whole or parts of computers, cell phones, game anything tech on ebay.  The electronics category is the highests scam area on ebay.

There are many people who are doing well selling tech on ebay - because many of them scammed it off ebay to get it.  So their wholesale cost is close to free, so they can afford to take any loss.  You do not appear to be the kind of person who could stomach that selling practice, but it is common around here.  So selling tech is an idea you should set aside for a time.

A lot of new sellers make the mistake of looking at the hot trendy items, and at the prices the merchandise is getting - but you make your money when you buy your merchandise.  If you are buying with the plan to double your money, you will soon be in the hole with no way out.  And if you are buying the merchandise honestly off ebay - the ship costs will be the death of your business.  And remember that everyone is buying wholesale and those costs are fixed, but still high.

I suggest that you experiment with low cost, low value items and keep track of what sells and then do a little common sense research as to why and then if you find something go deeper in that direction and expand in that category and farther away from the high risk/slow moving.  That way when you do find something, you have not lost big money to do it.

A few years ago I hit a fundraising sale and spent about $25 on all kinds of merchandise, but I bought a lot of one genre that had produced good results and was pleasantly surprised when I had cleared over $500 in a month on about a third of the merchandise.   By the end of the year I had sold most of it.  That is something you have to keep in mind when you buy, it is rare that everything will sell for you.

Personally I have 5 different genre categories of items that I keep my eyes open for, and none of them are considered trendy or risky, in fact most of the merchandise I pick up is totally ignored by resellers because of their ignorance, laziness or greed.   It is always a good idea to specialize in a category so you can know the good stuff behind the trendy that gets ignored, but it is a better business plan to be constantly experimenting in completely different areas just in case the trendon your main income starts to wane.

I'd say for you to start to sell the small stuff you have around you, that will not be a big loss if it gets scammed.  Keep your items lightweight or easy to ship - look into the Priority Flat Rate free shipping supplies, my go to is the padded Flat Rate envelope.  It helps me manage my shipping problems and keeps my prices lower than all of my competition on one specialty item.

So far, you are doing everything right in order to be a successful seller on the internet, but you are concentrating on a focus when you should be expanding and looking at all sides of the problem.  There are lots of sites to sell on, and more merchandise than just tech.

[0eeours]

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@smenkveld wrote:

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@0eeours wrote:
In the past six months or so I've purchased several "distressed" computers on eBay, having reviewed selling prices and only buying units that I think I can at least double my money on before expenses such as shipping, handling, various eBay and PayPal fees, and taxes. Most would probably be priced for sale in the range of $200-600.

Your going to go broke if you think that your going to make any money by doubling your money before expenses. At the very minimum you have to at least double your money after all expenses and you really need at least 10 times markup to make it worth while.

---

Well, I did say "at least double". The items I'm focusing on have a very strong market on eBay. Based on reviews of completed listings, units offered at anything like a reasonable price are pretty much guaranteed to sell. The downside of that strong market is that even non-functional units are in high demand and command a good price. Realistically, at least on merchandise sourced from eBay, I would expect units resold on eBay to bring a maximum of 4x purchase price before expenses, and probably an average of 2-3x. The good news is that eBay's FVF for whole computers is only 4%, assuming you have a store.

On the other hand, spare parts, which I'd expect to accumulate a fairly large stock of (from units that aren't worth repairing or which are serving as parts donors to fix other machines) should produce a much higher return on investment, perhaps even as much as 10x cost. However, FVFs for most spare parts (except for storage media, RAM, motherboards, and a few other things, which are also 4%) are either 6.15% or 9.15% if you have a store. Also, demand for spare parts is lower than for whole working units.

Overall, making it work would require finding the right balance between whole refurbished machines and spare parts. Alternatively, I could try to find a lower cost source of computers needing repair.

[0eeours]

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@sidemouse wrote:

I've tried what you speak of, the problem with distressed machines I found... Some are easy and simple enough to fix, but with others it's one problem after the next and it doesn't take long before something slips out the door where the real problem only shows itself after it arrives at the buyer's location...

I don't think the risk was so much in ways of scamming buyers, that fortunately I didn't see much of. 

But long story short, awful thin profit margins.

I think I'll stick to small engine parts and repairs, which that's an awful tricky razor thin profits line of work too... Granted there is money in it all (computers, weed eaters, chainsaws, doesn't really matter which) but it takes some time to narrow down a good line of products in all of that.

You never know, you might find out eventually that you were born to be a RAM salesman, or maybe graphic cards are your specialty, or maybe a little of everything or even something completely unrelated.

What I'm saying is you will want to play with it and figure out where to go as you make progress, mostly it takes a bit of a while to carve out that niche (the corner of the market you want to be in) before it's all over, so take it easy and good luck.

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Thanks for this perspective and for sharing your experience. One of the more challenging aspects of the used computer market is that inventory depreciates rapidly as technology and software compatibility marches on. I'm trying to focus on units that hold their value better than most, but I still can't afford to wait too long to move things out, or else risk an even narrower profit margin.

I take to heart your comment about never being certain if all the problems with a non-working unit have been fixed. Although I'd put each machine through a significant burn-in period after repair, some intermittent problems will manifest only under just the right conditions (temperature, humidity, vibration, etc.). I know I'd have to deal with some legitimate returns in addition to the fraudulent ones.

[0eeours]

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@fashunu4eeuh wrote:

Hello, welcome to the Selling board. First, i would use this account to sell and open a new account for buying and posting. This way you take advantage of having a nice feedback number already. This will help prevent you from appearing to be a first-time seller target. Anyone who investigates your feedback can see the number of transactions are based on buying but you are not claiming anything different. The hope is the scammers will pass you by on their way to another newbie with low to no feedback. 

Second, you are right to start small and work your way up to higher dollar transactions. I would go ahead and list a few items to get the feel of the platform. You are very well spoken and have done your homework, i think you will do well here. I don’t sell tech but i have found that buyers who spend at higher price points are very honest and i have never had an issue with one in nearly a decade of selling. Most buyers are honest and just want their item in the condition as described in the listing, delivered in a reasonable timeframe. It pays to be cautious but keep in mind that the majority of transactions go off without a hitch. The problems you read about here on the boards are the exception rather than the rule.

New sellers may find they are limited in quantity and dollar amounts on what they can sell when just starting out. And PayPal may hold your payments until the item shows as delivered. As time goes on and you get more sales under your belt, those limits are raised. 

Last, I would wait to open a atore until you are passed the new seller limits and can list a quantity that makes having a store financially feasible. 

Good luck to you moving forward, please come back to the boards anytime you have a concern or question.

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Thanks for the welcome. You've made some interesting suggestions. I've already made puchases of items I intend to resell using my current account, and those are mixed in with items I purchased for personal use, so I guess there's no harm in opening a new account for additional purchases and using my current account to sell. I can at least hope that my feedback score would scare off a few novice scammers.

Besides this message board, one of the things that tipped me off to the occurrence of buyer scams is that some of the "distressed" merchandise that I already purchased came into the sellers' hands via such scams. That is, they sold a working computer to someone and via a false SNAD return, wound up with a completely different, damaged computer in return, which I then bought. It's sad that people are willing to violate the trust of others in such a fashion, but it's clear that kind of fraud does happen on eBay. What's not clear is how often it happens, and whether it's happening more often now that word is spreading about eBay's practice of nearly always siding with the buyer and unwillingness to review fairly convincing evidence of buyer fraud.

I haven't been able to find definitive information about limits and restrictions for new sellers within the eBay help pages. I found some older information that talked about a probationary period of 90 days during which a new seller would be limited to 10 sales per month totalling no more than $500, but haven't been able to confirm that in current policy documents. Does anyone know?

If such limits still exist, and I initially focused on selling lower cost items, your suggestion about waiting to open a store makes a lot of sense.