Friday, 11 August 2006

In A Perfect Business World, This Would Have Worked

One of the many basic policies of auction platforms like eBay and Lelong, is to only allow sale of items that are already on hand. It is against the Terms of Service if Sellers list something that are not in their physical possession.

For today, let's not talk about scammers who do not have anything on hand except the intention to hook a victim with a bogus listing.

SOME of the Sellers who sell items that are not in their physical possession and do not hold ownership to, are for example, multi-level marketing agents and people who use dropship services.

I'm not saying that these people are not honest Sellers. I believe they are able to fulfill a customer's order if they are well synchonised with their supplier, but if Seller is caught fulfilling a customer's order from some other form of order fulfillment system, the Seller's rights may be revoked.

One classic example was the Skyhobby debacle. Skyhobby (a husband and wife team) had a good reputation as a Seller on Lelong, when they had their products on hand.

They subsequently started to sell electronic items from China that they do not possess yet. As far as I know, they collected all these orders from their winning bidders, THEN only place an order with their supplier. By purchasing in bulk, they get a massive discount, which they were then able to meet the low price that they sold on Lelong.

In a perfect world, this is of course an ideal win-win situation. Seller do not need to fork out any capital for stocks, since Buyers have already paid them in advance upon winning the auction. Buyers, without complaining, then wait for three months for the cargo ship to arrive from China.

But if everything was this easy, then Business Schools would have closed shop ages ago.

Assuming Seller DID place an order with Supplier in China, and assuming the Supplier DID ship out the stocks on time, what guarantees are there that the stocks won't be held up by Customs of either country?

And add in the problems many users of Chinese electronic gadgets face - some items can't even be used, some will break down after using once or twice. This is the reality of China-brand electronic products to date.

Anyway, to avoid this sort of problems, there is this policy of only selling items that we own or have in our possession and if anyone is caught (or reported) selling something that are not physically available, then it's time to look for a back up plan.

Posted by CyberPartyGal at 11:16 am