sellers market

From: Sellam Ismail <>
Date: Fri Mar 19 20:43:48 1999

On Fri, 19 Mar 1999, Richard Erlacher wrote:

> While it's true that ensuring that no money changes hands except between
> buyer and seller will remove the incentive on the part of the site owner to
> support needless price escalation, that mechanism won't be effective to
> encourage sane pricing unless there's a powerful mechanism, probably one
> stronger or at least swifter than the legal system, to ensure that the
> bidder and seller are held to their obligations.

The only obligations are those imposed by the buyer and seller upon each
other. In other words the system is no better and no worse than what ebay
has. Its an imperfect system. You basically rely on the trust and
reputation of the parties you are dealing with. Seller's will always have
the upper hand in the matter as long as they require payment up front.
Of course there is nothing to preclude any parties from using an online
escrow service.

> My problem with eBay is not that the prices are unreasonable, though I've
> felt they are. My problem is with the 70% advertised successful completion
> rate of transactions resulting from completed auctions. This means that
> only seven of ten auctions in which a bidder offers an amount equal to or in
> excess of the buyer's demand, result in a transfer of funds for the
> merchandise at auction. This doesn't include those auctions which result in
> the buyer receiving a brick, and may (?) not include cases wherein the
> seller receives a bogus check. It only considers those cases in which one
> of the parties backs out.

And in this case since there are no listing fees, the only thing lost is
time on the part of the seller. Fraud is always an issue, and one that
won't be resolved until we are able to reach out and touch someone for
real (so that we can kick their ass if they cheat us :)

But I imagine as the importance of internet commerce expands, new laws
will be drafted to make it easier for people across state lines to pursue
another party for deceptive or fraudulent sales, although mail order has
been going on for a long time and we are still not there. At any rate,
this is an issue that won't soon be solved by casual banter, although I
don't doubt a clever solution could arise to mitigate fraudulent sales if
the right people put their minds to it.

Again, it goes back to reputation.

> Unfortunately, I don't see a reasonable method which can be used to fix this
> problem. The free market says that an item is worth what someone will pay
> for it. How can one depend on the likes of eBay to set the price when there
> is no mechanism to bind the parties to their commitment to the agreed-upon
> transaction? How can we improve on it? What could we do if we had a site

Exactly. A very good point. Who's to say that $12,1000 Altair really
sold for that much? If it weren't for the inquisitive people on this list
who followed through and determined the sale wasn't consumated, people
might have tried to base their minimum asking prices at that amount. One
more reason to NOT rely on ebay prices as a marker for "fair market

> dedicated to the exchange of computer antiquities and oddities, to prevent
> falsely imputed prices resulting from transactions, faked in order to make
> record of prices at which commodities can not reasonably be traded?

A good question. It has always been possible to set up a fake auction on
ebay where a fraudlently inflated price can be established on an item,
and nobody has come forth to ask that question until now. I guess the
short answer is common sense. Like I said in a previous message, just
because an idiot wants to pay $3,000 for an Altair, doesn't mean everyone
else should too. Any seller wishing to base his minimum asking price on a
previous sale that was unreasonable will probably wait a long time before
either a) the price catches up to his exptectaions or b) he finally
realizes he must lower his expectations.

> Before we become too critical of eBay, we should, I think, have a positive
> construct which addresses their shortcomings. EBay is, I believe, a good
> idea, implemented as well as can be, though perhaps not, which, like our
> form of government, is by no means perfect, yet is superior to whatever else
> is available.

Its far from being superior to whatever else is available. It just
happens to have accumulated the largest user base through effective
advertising. It could also be argued (quite easily I might add) that it
has attracted the most sellers due to its mechanisms which give the
advantage to the seller and results in favorable returns for the seller.

Sellam Alternate e-mail:
Don't rub the lamp if you don't want the genie to come out.

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Received on Fri Mar 19 1999 - 20:43:48 GMT

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