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eBay's Square Trade - Do We Need It?

Aug 17, 2007
As an eBay trader, I've built a small but enjoyable business on eBay. I pay my listing fees, I pay my final fees, I pay my PayPal fees. Not a problem.

Now it seems eBay wants more. Let's take it into context: if (as eBay claims) 3 million sites are paying for the privilege of displaying this 'Square Trade' logo - what is eBay creaming from this? The sums are easy - 3 million x $9.50 per month = $342,000,000 a year. That's right. Read it again. $342,000,000! It's a staggering amount of money, probably more than the GDP of some countries! And for what?

You get to display a little green logo on your site. Wow. eBay says this will lead to -

A 43% decrease in future negative feedback. What's that? eBay are presumably here presupposing that you will deal with buyers who are bursting at the seams to give you negative feedback. Piffle.

In any business you will encounter buyers who are, for whatever reason, determined to trash your service. It's just life. It is up to you, as a trader, to ensure that your customers are satisfied with their purchase. It's no good expecting eBay - or anyone else - to bale you out if you're selling cheap rubbish.

Deal with your customers on a professional basis, respect their needs and rights, and they will respond with positive feedback. Ignore them, rip them off, treat them only as a revenue stream and you will fail in your enterprise, eBay Square Trade logo or no.

eBay also seem to suggest that their Square Trade logo will entice buyers who are looking for a seller they can trust. It's a fair point, but surely eBay should do some domestic cleaning and rid themselves of the crooked sellers they still seem to harbour?

The UK's BBC hung eBay out to dry with a documentary recently, pointing to the fact that some sellers - who I am sure are in the minority - cheerily flood eBay with counterfeit and fake designer goods. Now, eBay are not the culprit here, and I would not suggest for one moment that they condone this behaviour. Yet it would be interesting to know just how much of eBay's untold millions is spent combating this unwanted incursion - and what they intend to do to stop it.

Look at the Square Trade sign-up page. Aside from the 'free first month' tempter there is a very salient phrase - and here I think it is fair to quote - 'join eBay's largest community of trusted sellers'.

Does that mean that those of us who do not wish to further line eBay's pockets by joining the Square Trade programme are untrustworthy? The implication is, I think, present. eBay has discovered yet another lucrative revenue stream - the 'trusted seller'. It is unfortunate that, given that eBay was started as a 'matey' community venture, it now sees fit to promote such products as the Square Trade deal.

If eBay are so committed to fair and honest dealing, combined with the wish to promote ethical and honest dealers, then why do they offer this Square Deal to anyone who is willing to pay their fees?

I have just been through the sign-up process ( I haven't signed up). A very annoying point is that eBay ask you what kind of member you wish to be - US or non-US. It's on the same mindset level that, in days thankfully now gone, one used to be asked (in a job application) if you were 'Catholic' or 'non-Catholic'.

Does eBay not realise that by doing this, by setting the US on a pedestal as the 'prime' registration, that they are alienating members in the UK, Europe, India, Australia, South America - in fact, the 'Rest Of The World' (which, in case eBay has forgotten, is a lot bigger than the USA!). If all those members chose to abandon eBay in favour of a more 'friendly' auction site, one can't help wondering how long it would take before eBay realised that they aren't alone in the online world and revised their charges accordingly.

In summary, I would say that eBay are getting above themselves. Yes, they are a huge company. Huge companies come and go (where are IBM now?). Yes, they are (were) innovative. So are many others. Yes, they have made a lot of money. I have no problem with that.

It's when companies squeeze their cash-cow lemon so hard the pips squeak that they should think about a few things - like the fact that there are a myriad of other auction sites biting at their heels. Don't take the mickey, guys.
About the Author
Steve Dempster has been an internet junkie for more years than he cares to remember. His eBay shop can be seen at his site The Invisible Edge
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