Why You Shouldn't Buy Or Sell Music Gear On Ebay
Gear Monkey
The internet auction mogul known as eBay quietly launched in San Jose, California on September 3rd, 1995. Computer programmer Pierre Omidyar first launched the site under the guise of his personal web page - AuctionWeb. In its' early stages, AuctionWeb played host to myriad other topics of interest, one such being his tongue in cheek salute to the ebola virus. Hiring both its' first employee, as well as first president in 1996, the company ditched the AuctionWeb name for eBay shortly after its' inception. Originating as Echo Bay Technologies, Omidyar's consulting firm, the programmer realized the domain name was unavailable, later cropping it to eBay.com, the website we know today.
Ending at $14.83 USD, a non functioning laser pointer was the first ever sale on eBay. When Mr. Omidyar realized the product was not in working order, he contacted the buyer to inform him. "I'm a collector of broken laser pointers," is what the buyer told him, and from there, the company began to grow. Initially, it was alleged that eBay was founded to help his wife trade her PEX candy dispensers. However, when Adam Cohen's The Perfect Store was released in 2002, it became known to the public that the story was simply a spin set forth by a 1997 public relations manager in order to gain notoriety for the website.
Hosting a seemingly insurmountable amount of products on its site, eBay plays host to quite a bit of music gear. From penny whistles to Gibson SG's, double bass cases to sheet music, there is a never ending amount of music products that can be purchased from the company. Inconstant rotation is vintage gear, which sellers list at sometimes obscene prices for gear which is hard to find. Yet, eBay might not be the smartest venue to purchase your next piece of gear at, as their fees and percentages may make it not worth your while.
At the time of this article, there were 161, 814 musical products on the online auction block. If the prices were to average to roughly $500 USD, the cumulative transaction amount would fall at $80,907,000 USD. Should the purchaser choose to check out with PayPal, the seller is charged another three percent each time they list a product on the site, adding up to $2,427,210 USD in PayPal fees. This number may be higher or lower, depending on if the sale takes place in the United States, or internationally.
To list your music gear on the website, eBay charges a listing fee of $3.00 USD if your auction starts between $200 and $500 USD. The end value works out to 8.75% of the starting $25 USD, working out to $2.19 USD. The company also takes an additional 3.50% of the closing value balance when the auction ends between $25.01 and $1,000 USD. This accumulates to a grand total of $54, 722,549.48 USD to be paid to eBay. To justify these figures, I have included my calculations. 161, 814 pieces of music gear, times the $2.19 USD insertion fee generates $354, 372.66 USD. The rest of the $475.00 USD times 3.50% for the closing cost balance translates to $16.63 USD. $16.63 USD times 161,814 auctions adds up to $2,690,966.82. Add the insertion fee, and the number catapults to $3,045,399.48 USD, and when PayPal's $2,427,210 in fees is rendered to the equation, eBay is left with their net 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 purchaser, it may not be worth it to grab your gear from the auction website eBay. For one, you lose out on experiencing the instrument. Each instrument, be manufactured in the same plant on the same day, has a different feel. Each product has a different timbre and playability, and purchasing your instrument on the website may strip you of this initial experience with your instrument. Moreover, there is the ever present fear your product may be damaged in transit, alongside shipping costs, which are set by seller, and may be escalated to cover the costs put on to the seller by the company.
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