Why Should You Care About What I Think of E-bay? Who Do I Think I am?

I am a Chartered Accountant by trade, now referred to as a Certified Professional Accountant, since the Institutes in Canada changed the name of the professional designation. I have been a CA since 1998 - so 20 years now. It took me 4 years to earn my designation, so that I spent a total of 21 years in public accounting before I left in 2015 to start my own business. During that time I helped well in excess of 500 people with their business and tax affairs - maybe more than that. It's hard to count because I worked for four firms during my career, and I am sure that I helped over 100 clients in each one.  When I say 100 clients, I mean families and corporate groups. I don't mean individuals filing their tax return every year. If I include them, then I have easily assisted thousands of people over my career. The training to qualify as a CA is extremely rigorous. While most people outside the accounting world are vaguely familiar with this, few actually know what it entails.

The main takeaway from the training to become a CA, and the one thing that is critical to passing the professional exams is the ability to identify business and accounting issues that are not obvious, from a fact pattern. In our exams we were given business cases. These cases were large fact patterns, often containing a lot of numbers in the form of financial statements, that hinted at some business issues that jumped out, but usually these were worth the least numbers of marks. The critical issues that the examiners were looking for - the ones crucial to pass the questions, often lay hidden in the background, and it took analysis and a step back, after addressing the most obvious issues, to be able to recognize the critical, less obvious issues.

In order to be able to do this successfully, the prospective CA must learn and develop good analytical skills. This is where the public's perception of what an accountant does falls down a hole. A good CA will be able to look at a set of financial statements for a restaurant, for example, one that shows a profit in the current year, and be able to tell if the bartender might be stealing, or whether the restaurant could face bankruptcy in five years. How you ask? By looking at the patterns formed by the numbers and the relationships between those patterns. For example, bartender theft will show up in many ways, but one of them is that alcohol sales are relatively flat, while the cost of alcohol sold is rising, when the accountant knows that prices didn't change. The second example, a restaurant going broke can be forecast if cash flows are low to negative, even though profits are high, or if the cost of food and wages is more than two thirds of revenue, as this is a fairly standard, well documented benchmark of what makes a restaurant profitable over the longer term.

So, I am able to analyze patterns, and I can tell when a pattern is natural, and when it has been "massaged", or otherwise manipulated. Natural patterns have a certain element of randomness to them, whereas massaged or manipulated patterns are too perfect to be plausible. In the case of my dealings with E-bay over the past several years, I can see from my sales pattern, that it is not natural: it shows growth that is too steady and rarely fluctuates and the number of new customers every month is almost exactly the same. Even a successful business will have ups and downs, and these ups and downs will occur at different times and to different extents. As I will show you when I discuss it in greater detail, although an E-bay sales pattern for a seller like me does exhibit ups and downs, they are almost always identical, both in extent and in their timing, to the point that they become predictable. A business should not be able to predict a drop in sales unless it is related to a clearly known and understood factor, like people not shopping on Remembrance Day in Canada, or Memorial Day in the US. Once you as a seller, can accurately predict a drop in sales, when there is no clear reason why it should drop, then you know your sales pattern is being manipulated artificially.

Before I became a CA, my degree in university, which I earned with first class honours included a minor in economics. I never did take all the upper level economics courses, but I did complete both the introductory and intermediate courses in both macroeconomics and microeconomics. In the microeconomics courses we learned about different market models and how to recognize the behavior of the participants in each model. Two of these market models were pure monopoly and monopolistic competition. Monopolistic competition is really just a fancy way of describing a free market where businesses differentiate their products and services, either by advertising them effectively, offering different levels of quality or different levels of service. Monopoly, is a market model in which a single firm dominates the market. Monopolies are usually characterized by high prices, a restriction of supply in the market to keep the price elevated, and a lack of innovation from the customer's perspective. As we will see E-bay fits the profile of a monopolist pretty much to a "T".

So, in summary, I feel that I am well qualified to comment on what E-bay does and why it is bad for both buyers and sellers because of:

1. My experience selling on the platform over an eight year period.
2. My educational background, which has given me the basic tools to analyze E-bay's behavior within the broader context of the market for online selling space, and
3. My training as a CA, CPA, which allows me to meaningfully identify where I believe that E-bay is manipulating the prices realized in its auctions and the sales made by its sellers. My training also allows me to break down their pricing structure for their services and look beyond the legal form in which they structure their business to show instead the true economic substance of what they offer sellers. It is this analysis that will lay bare the fact that nothing E-bay does, or offers either buyers or sellers is truly "free".

I am in the midst of getting my website up and running so I may not be able to post again for a few more weeks, but will continue to do so where I can.

A quick disclaimer: the conclusions expressed in my blog are my informed OPINION, as someone who has dealt with E-bay on a daily basis for the past 3 years of the 10 years that I have been dealing with them. The question of their ultimate guilt is up to the governments to decide and so what I say here should be interpreted in that light. I am also not attempting to harm the E-bay brand. I am simply attempting to relay my experience, find some common ground with other sellers and hopefully set in motion a chain of events that will result in the leadership team at E-bay being held accountable. 

The Reason For Writing This Blog: To Raise Awareness of E-Bay's Unethical Practices and Give Sellers A Way to Escape Them

I am a long time seller on E-bay. I have had an anchor store in the stamp category for the past 5 years, and for nearly three of those years I have operated my business full time. Like nearly every seller who signs up with E-bay, I thought that the possibilities were endless. I have come to discover, though like most sellers that far from having endless possibilities, most of us struggle to operate within a system that makes it impossible for us to grow and succeed, all while bilking us for more and more money.

Online forums are replete with thousands, if not tens of thousands of stories from angry sellers who feel frustrated, duped, cheated and betrayed. They cannot understand why a company like E-bay would treat its true customers this way.

The problem with all this is nothing gets done about it. E-bay's business practices are indeed both unethical and illegal, because they are stifling competition in the marketplace and interfering with the natural workings of the capitalist markets. The law has simply not kept up with the advent of the internet. But even this being the case, they are still in violation of the clearly expressed spirit of the competition laws in Canada, and I suspect the anti-combines legislation in the US. There just isn't anybody yet who has been able to gather enough evidence and show the appropriate regulatory bodies that the laws have been violated.

Their business practices are not a fluke. The things that are happening are not "glitches" or unintended consequences of policy changes. They are part and parcel of a long-term market domination strategy that has been in place for a very long time. E-bay's highest executives are fully aware of what they are doing and therefore they are involved in a criminal conspiracy.

So the purpose of this blog is threefold:

1. To help sellers understand the ways in which they have been defrauded by e-bay and to help them understand what kind of evidence needs to be gathered to hold E-bay accountable once and for all. This is serious stuff: violations of the competition laws in Canada can carry fines of 25 million per violation and prison terms of up to 14 years. Suing E-bay and otherwise trying to hold them accountable through the legal system is a non-starter, and has never been successful. The key to holding them accountable is to have them investigated and charged with breaking the law. This will require patience and a methodical gathering of the evidence, which is everywhere.

2. To help buyers understand how their privacy rights are being violated and how E-bay's market domination will ultimately limit their choices as consumers, in the long run. It will also show how you can continue to shop on E-bay, but do so in a manner that frustrates E-bay's attempts to dominate and control the market.

3. To help sellers break free of E-bay's control once and for all and become the free and independent business people that they had always intended to be.

My first posts on this blog may not appear for the next few weeks and may be sporadic, as I myself am in the process of trying to get my own website finished so that I can leave E-bay. However, my first one will address the first question on every reader's mind: who do I think I am? and why should anyone care what I think? I am fairly confident that once I explain my background, how I became an e-bay seller and what is at stake for all of us, that most of you will see that I am not some nutjob, but rather a well educated, intelligent man who is concerned about what is happening, and wants to help make a difference.

It is my hope that eventually readers will come forward and share stories of how E-bay's anti-competitive practices have harmed them. I hope to gather as much evidence as I can, which will become the basis of formal complaints that I will file with the appropriate regulatory bodies in Canada and the US.

Thanks for reading and welcome.

A quick disclaimer: the conclusions expressed in my blog are my informed OPINION, as someone who has dealt with E-bay on a daily basis for the past 3 years of the 10 years that I have been dealing with them. The question of their ultimate guilt is up to the governments to decide and so what I say here should be interpreted in that light. I am also not attempting to harm the E-bay brand. I am simply attempting to relay my experience, find some common ground with other sellers and hopefully set in motion a chain of events that will result in the leadership team at E-bay being held accountable.