eBay observations

I started buying stuff on eBay about six months ago after writing a couple of first-person columns. The first one,
Amey Stone

I started buying stuff on eBay about six months ago after writing a couple of first-person columns. The first one, "eBay, Who Needs It?", was about why I had never bought anything at an online auction. The second one, "eBay Wins a Convert," was about how much fun I had when I actually tried it -- urged on by readers who responded to my first column.

Last week I had my first bad experience on the shopping network and it has tarnished my rosy view, not only of the shopping experience, but of eBay's long-term growth prospects.

What happened to me is pretty inconsequential -- I suspect I was a victim of what's known as "shill bidding" -- where a seller uses an alternate user ID to artificially bid up the price. I won the item, but it was at the maximum price I was willing to pay and I think I should have gotten it for cheaper.

Here's the real problem: I used eBay's automated feedback system to report my suspicions and got an email right back saying that eBay would investigate and get back to me. I waited a week and heard nothing. I tried again, waited a few days and again heard nothing. The seller emailed me a new invoice and I decided to just pay it.

A friend of mine who is an avid eBay shopper tells me that eBay customer service is terrible and it is next to impossible to get an actual eBay employee to respond to a complaint.

To be fair, I didn't try very hard. But I also don't plan to shop as much on eBay in the future. My initial suspicion about online auctions has been pretty much confirmed: I think I have paid too much for items I didn't need (although I really love some of them).

If eBay is going to keep growing at a fast enough rate to keep investors in its stock happy, it is going to have to give users a level of customer service that they would expect from any online -- or offline -- shopping experience. That means supplying an 800 number and an adequate customer support staff to deal with questions and complaints.

That will add to the costs of eBay's now super-lean business model. But without it, eBay doesn't stand much hope of keeping its more mainstream users happy. A high level of customer service is the price of running a mature business that caters to a demanding public and eBay is eventually going to have to start paying it.

Before it's here, it's on the Bloomberg Terminal.