This post over at the Saving Advice blog is interesting:
Will You Need A License To Sell On eBay?
Apparently the Pennsylvania State Board of Auctioneer Examiners is taking eBay sellers whose business is established in the state to task, contending that they need to be licensed auctioneers to sell on eBay. From the Board's latest newsletter:
Any online business with a physical presence in Pennsylvania that takes in consignments from third parties and places them online with the intent that they be auctioned, must be licensed as an auction company.
Okay, well how does one determine whether the items are being auctioned or sold by some other means? From the same newsletter:
An auction or sale at auction is defined [. . .] as an offer to sell property by an auctioneer or apprentice auctioneer to the members of an audience congregated for the purpose of making bids for the purchase of the property in an effort by the auctioneer or apprentice auctioneer to advance the amount of the bids to obtain the highest or most favorable offer.
This is a standard definition of auction, and reflects the definition in Virginia law as well. One might make the argument that the bidders are not congregated in an online auction, but I honestly wouldn't want to try to make that argument. (Would people sit in front of a computer for hours at a time in an online chat room if they didn't sense a feeling of togetherness with the people with whom they're chatting?)
The short answer is that this argument may have some teeth to it. EBay, naturally, strongly opposes this view, as it could potentially make the overwhelming majority of its sellers ineligible to sell goods on its website without proper licensure, if this move by the Pennsylvania State Board of Auctioneer Examiners sets a precedent. The popularity of eBay no doubt has rankled licensed auctioneers since eBay was AuctionWeb.com. EBay enables millions of people to sell things to the highest bidder, except that they, as auctioneers, had to (a) go to school for, (b) pass an examination, (c) pay a surety bond for each state they want to sell in, and (d) follow very stringent rules of ethics and oversight. Having gone through part of the process to becoming a licensed auctioneer in Virginia, I can see why eBay is concerned. Going to school is not cheap. Licensing fees, errors and omissions insurance, and bonds are not cheap. Add to this continuing education and other requirements, and it quickly becomes more trouble than it's worth to sell a few hundred dollars' worth of goods a month on eBay.
Is all lost for eBay? I don't think so. Here are a few arguments:
- Selling through Buy It Now is not selling by auction. A sale is not to the highest bidder in a Buy It Now auction. It is a sale to the first person who accepts the price listed. This is a single offer (the Buy It Now price) and acceptance of that offer. I can't see BIN falling within the scope of selling by auction.
- Even selling through Buy It Now or Make Offer isn't really an auction. The offers (bids) if there is more than one, are not sequentially more favorable, because the bidders don't know what the other bidders are willing to pay. This is more like a closed-bid process rather than an auction.
- Exceptions are made in Virginia (and likely other places as well) for selling your own stuff. I can auction off my personal belongings to my heart's content in Virginia without a license. That's an exception to the licensure law. So this ruling may not affect the substantial number of people who just want to clean out their own garage.
- Licensed auctioneers can still use eBay however they want. If there's a big push by state examination boards to force all eBay sellers to follow licensure requirements, then their mission is accomplished, which is to promote and uphold the practice and stature of auctioneering in their state. Licensed auctioneers will get a lot more business because they'll be the only ones allowed to sell on eBay by the standard auction method! Bad for eBay, maybe, and bad for non-licensed sellers, but great for auctioneers.
(This is one more reason why I have to sit my butt down in the chair and study bulk transfer regulations so I can get my license!) 😉
Interesting post. I think a big distinction, possibly not by definition but by spirit of the law, is the difference between Ebay and a physical auction run by an auctioneer. For example, I have never been to an auction , I would not know where to find an auction, and I would have no interest in ever attending any kind of auction for any reason. However, I use Ebay A LOT because it is convenient and it made doing something that should be easy to do simple and convenient for everyone.
Requiring some sort of license or certification would destroy a lot of the benefits of Ebay and only hurt the people in the state where such a law was enforced. Not only that, but enforcement would seem nearly impossible, probably only affecting the people who worked hard and set up an actual brick and mortar location to run Ebay auctions for other people.
I think this is interesting. I can see it from both points of view. The good news is that it doesn't appear to affect individuals, which would be a huge problem. I'm interested to know how this turns out.
Thanks for the nod! You have some interesting thoughts to ponder, and it's good to hear from someone going through the work I wouldn't be willing to do. If I did need a license, I would probably still use Buy It Now on eBay (as a seller), but it's so much more fun to watch the bidding! It's also tough to set a price for some odd items. I would often be way too high or too low.
Somehow, I'm not worried. eBay has the $$$ to put some serious lobbying pressure to get the law changed even it is ruled applicable. In addition, the public (voters) would support the lawmakers as well. I'm sure your license will come in handy in many other ways, though 😉
Once again, the government is pandering to a pack of parasites
that want themselves "protected" from free markets. It's kind of like
the horse and buggy going to the wayside, and because less hay is
being purchased, the farmer selling the hay raises hell with the politicians to try to make the car illegal. This ia all about protecting a few people at the expense of everyone else. If Rendell
signs this into law, I'll go independent. It's time government stops
the bull.