posted on October 12, 2008 05:38:10 AM
Sorry cannot remember how to make a link. But worth reading .eBay's Bill Me Later a Bad Idea.
http://seekingalpha.com/article/99508-ebay-s-bill-me-later-a-bad-idea. link to article
Doesn't John Donahoe get it? Bill Me Later may increase sales but it will ultimately drive the last seller from eBay (EBAY) because allowing buyers to purchase wish list type items they can't afford without a short term extension of credit doesn't make sense.
There are no details of how Bill Me Later will impact eBay sellers have been forthcoming but this author predicts the following:
1. Bill Me Later will be mandatory not optional for sellers.
2. Seller funds may be held up to 180 days just like Paypal does.
3. Sellers will be stuck with higher fees, more defaults & more chargebacks.
Does John really expect sellers to ship their inventory to buyers who can't afford it and hope they get paid? I think he does because Bill Me Later will generate more seller fees and eBay doesn't have to worry about taking a loss on inventory because they're just a venue.
eBay stock is now at a 6 year low because John has yet to discover that eBay's strength lies in its small sellers who sell hard to find, wacky, wonderful items that used to only be found on eBay. There's not very many of these sellers left because:
1. Sellers can't sell due to ongoing SYI glitches.
2. Search has been manipulated to the point of being nonfunctional.
3. Seller information has been sporadically removed from buyer invoices.
4. Shipping is capped at below actual costs for many popular media items.
5. Paypal holds, chargebacks and buyer refunds have increased by leaps and bounds.
And the list of what doesn't work goes on and on seemingly without end or resolution.
Once the first seller receives notification that a Bill Me Later purchase has gone into default (resulting in a chargeback) the news will spread like wildfire on eBay discussion boards. This is likely to trigger another seller boycott or sellers will simply leave.
But sellers may have the last laugh. If Judge Fogel rules in favor of Malone in the class action antitrust lawsuit Malone v. eBay Inc. then sellers will be able to choose whatever payment method they wish, which has the potential to render both Bill Me Later & Paypal substantially overvalued.
Solution is simple, I will not be using or allowing Bill Me Later on my items. If that is not an option with PayPal, then I will only accept payments through other methods that allow me to control my risk exposure.
My decision will not only be based on my financial practices as a business person but also on my ethical practices as a human.
In my opinion, further encouragement of easy debt for non-appreciating assets is socially irresponsible. My current pet peeve about this financial mess the world has itself in is the fact that so many people think it is acceptable to take on debt for non-essentials and others think it is acceptable to take advantage of their ignorance. I will stop there before I turn this thread into a discussion that belongs on the RT.
posted on October 12, 2008 03:09:39 PM
LtRay Thank you for the link to the extra page on bill me later. And thank you for doing the link on the page i put up. I will also not be using this Bill me now. Your correct about credit. It really is too easy to get and should only be used for important things like houses. Personally , i blame banks for the massive problems that the world has at the moment.
posted on October 13, 2008 02:28:59 PM
I think you may be missing a few very important points here. With transactions, including "face-to-face" types going more the route of plastic, especially with debit/check cards, the money comes straight out of the card holders checking account, so it is a cash sale. All a buyer needs is a Visa or MasterCard endorsed check card and it works just like a credit card, on Bill Me Later OR on Paypal.
Secondly, on Bill Me Later's website it states that they take full responsibility for any chargebacks, NOT the receiver of the money (us). Now, whether Ebay will change that in the future or not is an open question I grant you.
posted on October 13, 2008 05:45:46 PM
Sword, I think we have come to expect PayPal to find a way to pass as much risk as possible on to the seller.
As for Debit or credit cards, the seller still has a risk of chargeback. Bill me Later may extend the window of our exposed risk from 45 days to who knows how long.
First scenario that comes to mind, buyer uses Bill Me Later. The bill will not hit his account for 30 to 60 days. By then, he has either forgotten he bought it or he has bought more than one and does not remember who he bought it from and one of them was defective. He initials a chargeback and your funds are frozen until you can prove that you delivered or that you are not the seller with the defective product.
Ebay/PayPal has already pushed my risk tolerance level about as far as I am will to incur.
