OT: eBay's Death by a Thousand Cuts

Monstro · February 18, 2008

true, i guess i'm trying to say to any sellers that if you have a decent track record and it looks like your not going to jump ship at any moment then i would buy from you.

i'm just saying i don't think feedback is important as some people think.

Monstro · February 18, 2008

if you have 600 positive transactions, but 3 people left multiple feedbacks like so many annoying eBayers do then i don't even pay attention.

Calamerica · February 18, 2008

However, the FACT of the feedback inequities HAS cost ebay some members. There is no denying that FACT. eBay nearly lost me over the feedback inequities. ebay DID lose my sister-in-law and my oldest daughter because of this. This is just MY family, which is smaller than most I know of.

CAL :hi:

cd4ever · February 18, 2008

I think in comics it has added value as there are several sellers out there with perfect feedback but if you dig into the actual comments you will see numerous positive feedbacks that mention poor grading/overgraded comics, etc. So I do find the verbiage itself very helpful. newleafcomics (or something that like) comes to mind as an example.

JOHN who hopes newleafcomics is not a board member.

sterlingcomics · February 18, 2008

eBay's not worth the breath it takes to complain about it. It is what it is, and it's just one possible venue of many for me. I choose the one that fits the product I'm selling. I have distanced myself from eBay for years, so what else is new?

trmoore54 · February 18, 2008

:roflmao:

testinadical-migration · February 18, 2008

Is your wife still bidding with the ID of "pianolady2002"? I hope Ebay didn't lose her too!

Calamerica · February 19, 2008

why don't you go look up her bid history as far back as you can go and post it here for us to see, STU...

CAL :sumo:

Calamerica · February 19, 2008

why don't you go look up her bid history as far back as you can go and post it here for us to see, STU...

CAL :sumo:

Issa · February 19, 2008

I personally don't care if I for negative feedback. Smart sellers will follow-up with useful information, which enables me to trust/distrust a certain seller. As they say, buyer beware.....I think fee increases are more of a problem IMHO.

-Issa

Calamerica · February 19, 2008

Caveat Emptor

Designer Toast · February 19, 2008

Count,

Great posting about e-Bay, they are slowly slitting their own throat. For a company that started in a one room office with a fold-up poker table, a few computers and a couple of chairs, it certainly has grown into a monstrosity with common sense being either very low or non-existent on its list regarding customer service and checks and balances.

I certainly care about my feedback rating and the feedback of other buyers and sellers, even though I haven't sold anything on e-Bay in months. When I was buying and selling vintage Star Wars toys (or anything for that matter), mega negative feedback bidders were banned and I was cautious about doing business with any seller who had a lot of negative feedback.

e-Bay is smoking crack out its backward for eliminating a seller's ability to rate a buyer. Does anyone know if sellers can even respond to feedback in their profile? This whole thing is a bad idea from the word go. e-Bay has just given the buyers a knife and the sellers a box of band aids.

Dear Seller,

There has been a change to e-Bay's feedback system. Here it is: :tonofbricks:

you very much, have a great day, and be sure to pay all your fees on time.

Sincerely,

e-Bay :devil:

Calamerica · February 19, 2008

great post!!!

CAL :hi:

Old Fashion PB and J · February 19, 2008

I've been reading these posts and any articles I can read on the topic. Ebay for whatever reasons is killing itself.. It will take a long time, but its happening. There isnt one reason, its just not that simple. They have managed to make MULTIPLE moves to tick people off and/or deter them . The result angry bitter people looking to spite this company.

The main reasons I have seen are the feedback change. The listing fee change. And my least favorite the change in Final value fees, there cut is way more then there worth. I just stopped selling period. But now I do have to find more ways then just shows every month to sell my books. But id rather sell slowly then give them away so that ebay makes money and I lose.

Annihilus · February 19, 2008

Yeah....been there/done that with newleafcomics. He used to go by another name until right about the time I had to return a 'high grade' TOD 10 (a G 'VF/NM' book), when he changed his name to newleaf..

That's when I really started paying attention to the feedback verbiage in addition to the positives/negatives. Haven't really bought anything of substance after that transaction though.

heinlein99 · February 19, 2008

One day I'll win my Nobel prize in economics for coming up with the formula that predicts when a company has grown too big for its britches. Ebay passed the mark some time back.

My other Nobel will be for linking barometric pressure with crankiness.

Duffman_Comics · February 19, 2008

FTFY

Sorry, but incorrect spelling/grammar etc drives me nuts.

That said, I agree with the proposition.

trmoore54 · February 20, 2008

Unfortunately, some alternative sites seem to be latching onto the same types of protocols and corruption that has plagued eBay...if not outright condoning it or creating it...with a clear disregard for customer service to boot...

While this is not a catch-all or comic-book based auction house (primarily created as a jewelry wholesaler/auctioneer) read on...articles like this make me wonder where the ethics are these days and if short-sighted entrepeneurs aren't just looking to make a quick buck and get out of town before they're indicted...

Link: http://www.latimes.com/business/la-fi-bidz19feb19,1,1280773.story?ctrack=1&cset=true

Actual article

Criticism puts auction site Bidz.com under microscope

Bidding patterns, customer complaints raise concern

By Michael A. Hiltzik and Joseph Menn, Los Angeles Times Staff Writers

February 19, 2008

A few weeks ago, the chairman of online auction site Bidz.com forecast good news ahead. The company was headed for another blowout quarter, David Zinberg said, with sales topping the already-rosy projections made in November.

The announcement was designed partly to quell questions that had been swirling around the Culver City-based company for months.

The questions involve, among other things, what critics say are irregularities in bidding patterns on the site, as well as persistent customer complaints that have led the Better Business Bureau to give the company a grade of “F.”

Critics also have raised questions about Bidz.com's relationship with Saied Aframian, a primary jewelry supplier who served time in prison for receiving stolen property.

Zinberg, an immigrant from the former Soviet state of Moldova, attributes much of the criticism to short sellers -- investors betting on a drop in a company's stock price, and who aren't shy about trying to push it in that direction.

Indeed, public records indicate that investors had sold short nearly 3.9 million Bidz shares as of Jan. 31, a significant proportion of the roughly 10 million shares available for public trading.

Still, the questions appear to be having an effect; Bidz.com's shares have tumbled more than 30% since Zinberg's upbeat Jan. 14 announcement.

As Zinberg tells it, there's no mystery to the company's success. He says Bidz is enjoying strong growth because of the allure of its auction style and management's hard work.

"We come here at 7 a.m., we're the first ones to show up, and we love what we do," he said in an interview at the company's 52,000-square foot headquarters and warehouse.

But there may be reasons for the stock's downdraft other than short sellers' innuendo. Nearly half of Bidz's shares are owned by Zinberg and his sister, Marina Zinberg -- and they have been selling relentlessly, unloading 210,000 shares for nearly $2 million since Aug. 15, regulatory filings show.

In recent months, moreover, the company's two largest institutional stockholders dumped their combined 1.5 million shares. Neither would discuss their reasons for divesting.

Zinberg says his stock sales make up for his decision to take no salary from Bidz. Nevertheless, he cut the pace of sales back sharply starting in December.

The successor to a chain of 12 Southern California pawn shops Zinberg owned in the 1990s, Bidz offers fast-moving online auctions, mostly for cheap costume jewelry but occasionally featuring precious gems and fine watches it says are worth tens of thousands of dollars.

The auctions start at $1 and carry no reserve price, meaning that bids don't have to reach a minimum level to win an item. Unlike EBay, which brings individual sellers and buyers together, Bidz is the seller of almost every item on its website.

The company raised its first $20.5 million in capital through a series of private stock sales dating back to the late 1990s. In regulatory filings, the company has acknowledged that these sales were in violation of federal and state securities laws.

Bidz.com, which trades on the Nasdaq stock market, never completed a conventional public offering of the sort that normally involves extensive scrutiny by the Securities and Exchange Commission.

The company's leading supplier of jewelry is Los Angeles Jewelry Production Inc., a downtown jewelry district firm managed by Aframian, who also is listed in regulatory filings as a co-owner of the firm.

An Iranian immigrant, Aframian served a two-year term in state prison in the 1980s for receiving stolen property. In a 2006 civil suit, a New York jewelry wholesaler accused him of stealing $285,000 in jewelry that he had left overnight in Los Angeles Jewelry's office safe. The case was settled on confidential terms.

Aframian, who declined to comment, is the third-largest shareholder of Bidz, behind the Zinbergs.

Frequent complaints

As for its customer service, the Better Business Bureau says Bidz's "F" is based on customer complaints of shoddy merchandise and misrepresentation of items' quality or value.

A frequent target is the company's "compare" price, a dollar figure Bidz posts for many auctioned items that purports to represent the maximum price that has been advertised online for items that are "similar or the same."

Karen Leonard, a Philadelphia-area resident who filed a complaint last month with the Better Business Bureau, said she paid $800 for a diamond ring on which the "compare" price was $10,769.

After getting the shipment, "I knew immediately that it couldn't be worth $10,000," she said in an interview. "But the description [on the Bidz website] made you think you were getting a really good deal."

She said Bidz has refused to refund the full purchase price on grounds that the item was "as described" and therefore subject to a 15% restocking fee.

Bidz.com often offers buyers an "appraisal" of their item for a $33 charge. The reports are invariably produced by Woodland Hills-based American International Gemologists, which acknowledged to The Times that it does not physically inspect every item for which it provides an appraisal.

That raised a red flag for Jeanine Woodling, director of education at the nonprofit International Society of Appraisers. For a solid appraisal, "It's important for them to actually be able to see the piece," Woodling said.

Critics of Bidz, including some who claim to be customers, say they suspect shill bidding has driven up the prices of many auctions.This allegation was published onlinein November by Citron Research, a Los Angeles website run by short seller Andrew Left, and has also appeared in postings on Ripoffreport.com, a website that collects consumer complaints.

As evidence, they cite auctions in which prices were bid up to implausible levels on items available at retail for much less. Late last year, for example, buyers mysteriously bid as much as $11,000 for big-screen TVs that retailed elsewhere for as little as $800.

Zinberg said that the company forbids shill bidding. He said he believed that some of the TV bids "came from a party that was interested in damaging our reputation."

A further curious bidding pattern occurred in November during an auction for what the company described as a 50.71-carat diamond ring. Bids rose to more than $600,000, a level that led skeptical securities analysts on a conference call Nov. 27 to question Zinberg about the bidders' legitimacy.

Zinberg replied that they were "legitimate people with intention to buy the jewelry."

Soon after the conference call, bids that had been made over a period of more than three weeks disappeared from the diamond auction, including all the six-figure bids. Auction records archived on Bidz.com show a 26-day gap for which no bids are listed.

Zinberg told The Times that the company had decided to delete all bids for which bidders "could not verify funds." Bidding resumed at just over $63,000. The diamond eventually was won by a buyer using the screen pseudonym "11219bp," who had not participated in the auction at all before posting his winning bid for $75,407. Zinberg described him as a "very happy customer."

Following the conference call, one securities analyst, Elizabeth Pierce of Roth Capital Partners, told clients that Bidz had defended itself well against some allegations, but "had a tougher time addressing the questionable bidding practices."

The company claims to have a "critical mass of loyal buyers and repeat customers." It says it has been gaining roughly 50,000 new customers per quarter, or more than 200,000 a year.

Zinberg, 50, said he founded Bidz.com as a way to remarket huge volumes of inexpensive jewelry that retailers had returned to their manufacturers. He said he is able to offer the jewelers 20% to 40% over meltdown value by purchasing the closeouts in bulk.

Bidz has been less successful at raising capital in the public markets. A planned $57.5-million initial public offering collapsed in 2006 when the majority of the company's original shareholders refused to sign customary "lock-up" agreements prohibiting them from selling their shares for six months after the IPO. Such agreements are often required by IPO underwriters to keep the market from being flooded with old shares.

One major shareholder says he refused to sign because he was irked at being asked for a lock-up after having "waited years for my [investment] return" from his private investment in the company.

The investor, Mark Abrams, an Orange County business executive, said he was still a large shareholder in Bidz. "I believe in the model and believe in what they're doing," he said.

Supplier scrutinized

As Bidz's appetite for inventory grew, it entered into a close relationship with Los Angeles Jewelry Production, or LAJ.

During 2005 and 2006, LAJ accounted for as much as 45% of Bidz inventory purchases. That share has recently dropped to 10%, according to Lawrence Kong, Bidz's chief financial officer.

The relationship between Bidz and LAJ's Aframian was not merely that of customer and supplier. Bidz paid Aframian with shares for some merchandise. Aframian bought other shares on his own and was listed in his most recent SEC filings as the owner of 1.3 million Bidz shares, or 5.6% of the company.

In 2004, LAJ made Bidz a $500,000 loan secured by a lien on Zinberg's Agoura house, according to Los Angeles County real estate records and a Bidz spokesman.

Zinberg, questioned about the relationship between Bidz and Aframian during the Nov. 27 conference call with analysts, said that he had learned of Aframian's criminal background the previous day.

He said Bidz was reevaluating its relationship with Aframian but that it had no reason to "question [LAJ's] integrity."

A Bidz spokesman contended last week that Aframian's background "has nothing to do with the way Bidz does business. . . . There's been no accusation of Bidz doing anything wrong."

Contacted by The Times, Aframian declined to talk about his record or his dealings with Bidz. "I was advised not to talk about any issue," he said.

A bigger problem for Bidz may be accusations of poor customer service, which are regularly posted -- and occasionally contradicted -- on such public consumer comment sites as Ripoffreport.com and Epinions.com.

Zinberg argues that given the company's stated sales volume of about 2,700 orders per day, its complaint rate is small; the Better Business Bureau, he notes, has clocked only 249 complaints about Bidz over the last 36 months.

Many of the complaints filed with the BBB or posted to consumer complaint sites online follow similar patterns.

One customer who posted on Ripoffreport.com said that he ordered an inexpensive pendant with a single stone of triangular-cut Alexandrite, a greenish-purple stone. He said he received a piece with three round red rubies instead.

The customer, who posted the complaint under the pseudonym "Aussie shopper," talked to The Times but asked not to be further identified to avoid provoking the company.

He said that after he asked Bidz to send the correct item, he discovered that on its website the photograph of the item he ordered had been changed to show the three-stone ruby pendant he had received -- although the text on the page still described a single triangle-cut Alexandrite.

That description was still posted on the Bidz website Monday.

michael.hiltzik@latimes.com

joseph.menn@latimes.com

Aces · February 20, 2008

Ya don't say...

:popcorn:

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OT: eBay's Death by a Thousand Cuts

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