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Why You Shouldn't Buy Or Sell Music Gear On Ebay

May 1, 2008
The online auction pioneer eBay originated in sunny San Jose, California on September 3rd, 1995 by French born Iranian Pierre Omidyar. Launching as an imprint of AuctionWeb, Omidyar's personal website, the trading post was among Pierre's other musings, such as a witty tribute to the ebola virus. Growing quickly, AuctionWeb's bidding site branched out in to eBay shortly after its' inception, and was dubbed as such after Mr. Omidyar attempted to register the company's domain as Echo Bay Technologies, and found this was unavailable. Shortened to eBay, the company was poised for exponential growth, hiring both its' first employee and first president a year after it went live.

The first transaction on eBay was a broken laser pointed, which closed at $14.83 USD. Mr. Omidyar spoke with the auction winner to confirm that he was aware that the laser pointer was not functioning. "I'm a collector of broken laser pointers," was the response he was met with. From there, the company flourished. Originally, it was believed that Pierre created the website in order to bolster his fiancee's PEZ dispenser collection. However, it was revealed in Adam Cohen's 2002 The Perfect Store that this rumor was in fact a fabrication set forth by an eBay public relations manager in 1997.

One may find just about anything they should need on the internet auction block, including musical gear. The list ranges from oboes to French horns, music stands to notation paper, and far beyond. Quite often, much sought after defective or out of circulation gear will retail for obscene prices, as demand for these few and far between pieces are rather high. Regardless, the fess associated with such gear, brought on by listing costs, eBay percentages, and shipping, may make it not seem worth the transaction.

As it stands, there are 161, 814 pieces of music equipment listed on eBay. Were the average price of the products to work out to $500 USD, the gross amount changing hands would work out to $80,907,000 USD. When the consumer checks out using PayPal, a subsidiary of eBay, the payment service charges the vendor roughly 3%, leaving PayPal with $2,427,210 USD. Depending on where the transaction took place - United States or internationally, the percentage taken by PayPal may be slightly higher or lower.

To host your product on its' website, eBay charges the sellers a $3.00 USD insertion fee on musical products starting at no less than $200 USD, and no more that $500 USD. The end value will be 8.75% of the beginning $25 USD, resulting in a $2.19 USD charge. Additionally, 3.50% is taken by eBay on the closing price when auctions end between $25.01 and $1,000 USD. This pulls in a total of $54, 722,549.48 USD for eBay. I have arrived at this number via the following calculations. 161,814 musical products multiplied by the initial insertion fee of $2.19 USD brings us to $354, 372.66 USD. The $500 USD, less the initial $25 USD, is multiplied by the 3.50% closing value balance, working out to $16.63 USD. That $16.63 USD multiplied by 161,814 listings brings us to $2,690,966.82 USD. When you add the insertion fee total and PayPal's $2,690,966.82 USD, we arrive at eBay's take of $54, 722,549.48 USD.

Should you be a seller, it may not work out in your best interest to auction your music gear off on the website. From the start, eBay will take roughly ten percent of the final value sales price, which is of course, in addition to the fee they charge you to list your product in the first place. If your buyer decides to use PayPal to complete their transaction, you may find yourself out another three percent, which could bring you down 15% of what your piece of gear actually sold for.

As a buyer, to purchase your instrument on eBay might be a poor decision. For one, you lose the intimacy and connection one feels when they pick up a piece of equipment that they fall in love with. Many instruments differ in timbre, color, and feel, even from products manufactured in the same day from the same materials. In addition to this, there is the worry that your instrument may be damaged in shipping. And on top of this, shipping cost is set by the vendor, which may be inflated to cover the extra costs incurred on him by eBay.
About the Author
Do not pay pay to host any of your Music Gear Auctions on Ebay! Check out Gear-Vault for the newest Music Gear Reviews!
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