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.

[0eeours]

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@mikeystoyz wrote:

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.

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What do you think is the source of the high disappointment level? I've read that a high percentage of buyers now use the eBay mobile app and that many never even look at the description or item specifics. I can see that leading to a lot of problems, especially for used merchandise. Are there other factors? Also, you mentioned that there are things that sellers can do to knock down the disappointment level. Can you share any of them, or do you consider them trade secrets?

I'd strive for any machine I sold whole to be as close to completely functional as possible so that it can be legitimately listed as "used" rather than "for parts or repair." (As an aside, I think eBay should have a condition description between those two that covers merchandise that's still quite usable, but isn't 100% functional, though that's a subject for another post). My goal would be for as much of the essential description to be incorporated in the listing title (and perhaps subtitle) as possible. But there's no getting around the fact that tech is complex and sometimes the buyer needs to know details such as "this machine has only 2GB of RAM, can't be upgraded, and shouldn't be purchased if you're planning to run Photoshop" or "this machine can't run the latest version of the operating system." Those sorts of caveats can only go in the description.

[0eeours]

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@mr_lincoln wrote:

@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.

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Thanks for the reply. I wouldn't be dealing with the latest and greatest computers, as the cost of acquisition for even non-working units is just too high. Thus far, most of those I've purchased are in the range of 4-8 years old, but are still in high demand. I'm not sure to what degree their age would be a bulwark against fraud.

Unfortunately I live in a fairly rural area, so there is a limited market for local pickup. However, it might still be a useful part of an overall plan to reduce risk of fraud (and increase profits). There being several low- and no-cost options for advertising locally, I probably wouldn't use eBay for such sales.

When I first contemplated selling on eBay, it seemed appealing as a way to make some money that would allow for a flexible time commitment. I've been doing some freelance/contract work that uses a completely different skill set, but that work comes in fits and starts. I might be really busy for a few weeks, and then have nothing for months. I figured I could adjust how many listings I had on eBay to fit the time I had available.

If, however, I need a store to take advantage of the lower FVFs and that commits me to a minimum number of listings at all times, that flexibility goes away. I have some questions about store minimums, but I'll post about that separately.

[0eeours]

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@gracieallen01 wrote:

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.

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Those are good questions, but not ones that I have answers to, at least not yet. I'd be selling used computers. They aren't going to appeal to the person who'd be satisfied with the latest discount bargain machine at a big box store. In general, people seek used goods to save money, or because they need an attribute that's no longer available on new models.

Over the years, nearly all of my own computers have been purchased used. I don't need the latest and greatest features, and the savings have been substantial. I've never regretted buying used, and have had no meaningful reliability problems with used machines that I've kept in service for many years. I make an effort to keep my computers from overheating, since excess heat is a leading killer of electronic gear. For laptops, liquid spills also take a big toll, so I ban beverages around mine.

I understand that a "no return" policy doesn't provide any protection, and can even be detrimental at times. In fact, it was coming to understand the situation around returns and refunds on eBay that prompted my post. Given eBay's current policies, I'd probably offer 30-day free returns. If a buyer is unhappy, they're going to find a way to force a return. I figure if I make it easy for them, they might behave a little better in the process.

[0eeours]

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@luckythewinner wrote:

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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. 

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I agree that the current system makes it difficult for eBay to discern who's telling the truth. What's needed is a trusted third party intermediary, but the cost for a service to affirm the contents and condition of a package in both directions would probably be prohibitive for all but the costliest of items.

A number of sellers in this forum have advocated for self-insurance as a means to deal with fraud. That is, upping prices on all listings in order to cover the losses associated with those that go badly wrong. Your suggested approach may also be valid for some types of merchandise, but if a seller has enough unavoidable fixed costs, they may be unable to cut them sufficiently. I mentioned in a previous response that perhaps I should seek out lower cost sources than eBay for computers in need of repair. But I don't know if such sources exist, or if they do, that I can access them without being a wholesaler or otherwise making much more of a commitment than I'm currently willing to.

[fashunu4eeuh]

As you read, new seller limits at one time were applied more uniformly on the platform ($500/10 items a month over a 3 month probationery period). Now eBay sets the limits based on a number of factors (some we know, others we don’t because eBay does not usually share that info with sellers). Being an established eBayer with a history and feedback will help get you a higher limit starting out (hopefully).

You won’t find any policy that covers how long a new seller must wait initially til his limits are raised. It is a fluid situation but we do know you can request higher limits every 30 days. Below is the link to the Seller Limits policies. You have probably found this info already, but it is included  in case it’s needed by others. Good luck to you.

https://www.ebay.com/help/selling/listings/selling-limits?id=4107

[mikeystoyz]

People buy a low-end computer from you and ask why it cant run the latest steam game.  People don't read the description.  People want apart and remove it and send it back.  Those lead to disappointments.  You need to handhold people through the description.  Describe what can and cant play.  If you are buying an I3 computer you arent going to play games that require an I7.

Packing - you have to double box everything.  FedEx, the Post office, DHL and UPS do not know how to handle anything that weighs more then 10 lbs.

[0eeours]

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@futuretomorrow wrote:

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. 

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Thank you very much for this detailed and sobering assessment of the current selling landscape for tech on eBay. I can see that my wariness, particularly regarding sale of whole laptop and desktop computers, is well-justified.

I'm perplexed by the CSR's claim that more detailed documentation in the listing somehow increases the seller's chance of winning a false SNAD or other fraudulent return claim. I thought eBay's position was that they can't know what was actually shipped by the seller, so it's irrelevant how thorough the listing is. In fact, based on how eBay has been handling such disputes recently, it seems that the only "proof" they might accept would have to take the form of a signed affidavit about the nature and condition of the merchandise from a trusted third party, most likely the shipper. If returned, the package would then have to go back through the same shipper and re-examined to confirm that the contents match the description on the original affidavit. In other words, a standard of proof that's virtually impossible to meet.

I'll have to re-evaluate the prospects for local, cash-only sales. With no eBay or Paypal fees, no handling or shipping expenses, and much reduced chance of a return, I could lower selling prices. Maybe I could attract buyers from a somewhat larger geographic area than I initially anticipated. The biggest challenge would be to find a safe venue where I could demonstrate the equipment and carry out the transaction.

Thanks again for taking the time to share what you've learned.

[futuretomorrow]

Thanks for the sound advice and comment. Not to get deep into the weeds of what I have going on but I'll soon be leaving the platform and focusing on "my brand", not someone elses. I learned a lot here, met some great people, have some great regulars I'll keep in touch with after I'm gone through other avenues that don't circumvent direct communication with buyers.

It's going to be an incredibly slow climb to anywhere near what I was doing here in even the slowest of times but at least I'll know that it's entirely up to me and not the ever changing position of a platform. One that I actually pay money to, eBay isn't free, but I have zero say in how it works and now, how I manage sales and customer expectations.

When things started to go really South earlier this year I had two large potential sales I could not complete because of how the system here is structured. When eBay told me the only solution was to break their own rules and suffer the consequences of "an off site sale", I knew I was officially done and it was time to move on. They don't provide the basic or standard tools needed to properly manage a business and when one tries to improvise, they get in trouble and are made out to be a bandit.

Thanks again.