Digital Downloads Banned From eBay Auctions

eBay's new policy limits sale of electronic files to classified ad listings.

by staff writer
- Apr 22, 2008

Merchants who make a living on eBay selling downloadable recipes, music, books and other so-called information products will have to rethink their business models in the wake of a policy shift by the e-commerce giant.

eBay in March announced it will no longer permit listings of digital downloads in its auction or fixed-price formats. Effective March 31, anything that can be electronically transferred must be listed using the fixed-price classified ad format.

Classified listings run for 30 days and cost $9.95, irrespective of the item's selling price. Still, for many sellers in the information products category, the price of the ad alone would be more than auction listing fees and final value fees combined.

According to Brian Burke, director of eBay's Global Feedback Policy, the rule change is intended to "preserve the integrity of the feedback system," a crucial element of eBay's online community that helps buyers and sellers gauge the trustworthiness of potential trading partners.

Because digital downloads can be easily replicated, Burke says, there's an easy opportunity for sellers to list thousands of the same item in an attempt to manipulate the feedback system.

"It also creates a perception that even legitimate sellers of digital goods are manipulating the feedback system," he adds. "This dynamic—real and perceived—undermines trust across the entire marketplace."

Classified ads are considered lead-generation tools, so no feedback is exchanged between buyer and seller.

eBay has been under extra scrutiny since January, when it unleashed a series of policy changes that many sellers took to be a raw deal. The most controversial change was an effort to reduce feedback abuse by no longer allowing sellers to leave negative or neutral feedback for their buyers.

eBay's Burke explains that the digital downloads policy is designed to neutralize unscrupulous activity eBay believed would escalate as a result of earlier policy changes—such as the decision to make Detailed Seller Ratings a key factor in Best Match search results and PowerSeller status.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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