The implications of eBay for real networks': the distribution

http://www.essex.ac.uk/chimera/

CHIMERA WORKING PAPER NUMBER: 2006-08

Implications of eBay for ‘real networks’

The implications of eBay for ‘real networks’: the

distribution of goods, money flows and the Internet

infrastructure of e-commerce

Chimera Working Paper Number: 2006-08, January

Ellis, R. M. & Haywood, A. J.

[email protected] & [email protected]

The growth of eBay into the world’s largest e-commerce site has been built on the back of three ‘real networks’ – those which deliver goods, those which involve money flows and an Internet infrastructure which allows the flow and exchange of data. The ‘eBay phenomenon’ (Bunnel and Luecke, 2000) has had interesting and complex implications for these ‘real networks’ which underpin the exchange of goods considered in this paper. The amount of items being sold on eBay has not merely put pressure on existing networks or increased their business, but led to complex negotiations by eBayers in terms of choosing between existing intermediaries and cherry picking their services, and substituting their business to new intermediaries which have grown up to cater for eBay and e-commerce. In addition, eBay is not only supported by the ‘real networks’ of distribution, money and an Internet infrastructure, it in turn has also supported them. Without eBay, for example, it is likely that many more local post offices would have closed (cf. Henry, Goswami and Young-Abraham, 2005) due to diminishing revenues from elsewhere in the business. eBay has also been one factor in encouraging the fast adoption of Broadband by eBay buyers, and is the ‘killer ap’ of Broadband adoption for eBay sellers – who cannot sell and list on a regular basis without it. eBay makes highly visible problems with existing ‘real networks,’ particularly with its globalising effects on the exchange of goods. Where no service exists to cater for eBayers’ needs, this often stops them bidding for such items and affects saleability – real networks affect what materialises on eBay and the ultimate destinations of eBay items. Using eBay gives people an alternative perspective on real networks, often through greater use and differential requirements to ‘non-eBay’ use. eBayers’ user perceptions of real networks are therefore also explored in this paper in order to understand the implications of eBay for those real networks, including their unmet needs.



© 2007, University of Essex

http://www.essex.ac.uk/chimera/ Page 2 of 48

Chimera

The work reported in this paper is part of the scientific programme of Chimera, the Institute for Socio-technical Innovation and Research at the University of Essex.

Chimera is a post-disciplinary institute employing social scientists, computer scientists, engineers, anthropologists, psychologists, HCI practitioners and interface designers specialising in ‘socio-technical’ research and consulting. It was set up in April 2002 at Adastral Park, Suffolk as a research institute of the University of Essex.

Chimera carries out research which combines the social and technological sciences to:

• generate insights into personal and social use of information and communication technologies,

• ground technological innovation in an understanding of people,

• provide analysis to support evidence-based 'information society' strategies and policies in the public and commercial domain.

We achieve this through a balanced programme of basic and applied research projects, consultancy and publication. For more information see www.essex.ac.uk/chimera

Contacting Chimera

Chimera

Institute of Socio-Technical Innovation and Research

Ross Building (PP1, ROS-IP)

Adastral Park,

Martlesham Heath,

Ipswich, Suffolk,

IP5 3RE

UK

Tel: +44 (01473) 632238

Fax: +44 (01473) 614936

E-mail: [email protected]

Web: http://www.essex.ac.uk/chimera/

Citing This Paper

Readers wishing to cite this paper are asked to use the following form of words:

Ellis, R. M. and Haywood, A. J. (2006) ‘The implications of eBay for ‘real networks’’, Chimera Working Paper 2006-08, Colchester: University of Essex.

For an on-line version of this working paper and others in the series go to www.essex.ac.uk/chimera/publications.html


All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or

transmitted, in any form, or by any means, mechanical, photocopying, recording or otherwise, without

the prior permission of the Director, Chimera.





Table of Contents

1 Introduction – eBay and the ‘real’ networks .....................................................................................4

2 The distribution of goods .......................................................................................................................6

2.1 Royal Mail and Parcel Force – Impacts of eBay on mail and parcels ...................................................7

2.1.1 Perceptions of Royal Mail and Parcel Force ..................................................................................8

2.1.2 Customer experiences of Royal Mail and Parcel Force................................................................14

2.1.3 Unmet needs ...............................................................................................................................18

2.1.4 eBay and post interrelationships .................................................................................................19

2.1.5 Royal mail and customer views on future directions such as volumetric pricing........................22

2.2 Couriers ..............................................................................................................................................25

2.3 Local or face-to-face collection...........................................................................................................27

3 Money flows............................................................................................................................................30

3.1 PayPal .................................................................................................................................................30

3.1.1 Perceptions of PayPal ..................................................................................................................31

3.1.2 Problematic aspects and desired improvements .........................................................................35

3.2 Other online payment methods: Bidpay, Nochex, Eggpay, FastPay ..................................................36

3.3 High Street banking services ..............................................................................................................37

3.4 Cash in the post .................................................................................................................................38

4 Internet infrastructure of e-commerce.............................................................................................40

4.1 eBay and dial-up.................................................................................................................................40

4.2 eBay and Broadband ..........................................................................................................................41

4.2.1 Role of eBay in the take up of Broadband ..................................................................................41

4.2.2 Broadband and how it changes use of eBay...............................................................................42

4.2.3 eBay and marketing Broadband..................................................................................................42

5 Conclusions .............................................................................................................................................44

6 References ..............................................................................................................................................47





1 Introduction – eBay and the ‘real’ networks

The growth of eBay into the world’s largest e-commerce site has been built on the back of three ‘real networks’ – those which deliver goods, those which involve money flows and an Internet infrastructure which allows the flow and exchange of data. The Human Geography e-commerce/ information economy literature has been important in dispelling notions of a new “weightless economy” (Quah, 1999) and the “death of distance” (Cairncross, 1997) in an information age - reinstating the importance of logistics (Murphy, 2003a, 2003b) for grounded, non-ethereal commodities; and the importance of information systems infrastructure in redefining geographies through the exploitation of minute differences between places (Li et al., 2001). At the beginnings of the eBay ‘phenomenon’ (Bunnel and Luecke, 2000), certain difficulties could be predicted for traditional upholders of these ‘real networks’, such as Royal Mail and the High Street banks. The Internet has often caused anxiety in terms of its implications for traditional networks – and that companies who did not commit to the new world order would be left behind (Karpinski cited Herschlag and Zwick, 2002). Electronic substitution was feared by carriers of post – with the rise of e-mail reducing household to household letter mail and replacing some business post. Meanwhile, High Street banks altered their working practices to accommodate the Internet – with online banking and the possibilities of BACS transfers. The Internet, in addition, often led to the rise of new competitors, who were unencumbered by traditional working practices which had been developed over years. It may have been expected that both the Royal Mail and the High Street banks would have been subject to intense competition from new incumbents in the market place in the form of private couriers for the distribution of goods and an electronic payment intermediary for money flows in relation to eBay transactions. It was also anticipated that Broadband could potentially be marketed through the benefits it would have for the ‘eBay experience’ as a potential ‘killer application’ to increase the adoption of Broadband services. Few of these predictions turned out to be true in 2005, as eBay.com reached its tenth anniversary.

The decline in letter post caused by the Internet has been offset to some extent by the rise in e-commerce and eBay-related parcel and packet post. No single private courier emerged to take away the Royal Mail’s share of eBay post, although DHL’s Parcels2go is strongly linked to the eBay brand as a shipping solution for online auctions, having a stand at eBay University events. Customers still preferred Royal Mail, because of easy access to their network via Post Offices, and because of the inherent problems associated with private couriers (see Section 2.2), as well as cost. Ironically, eBay has potentially saved Royal Mail’s network of local post offices from closure, as a compensation for the government’s direct payment of pensions into bank accounts.1 For the High Street banks, the picture was different, and PayPal, their major threat in terms of eBay business in 2002 when the study was conceived, turned out to be more dominant than expected, partly because of a change in the eBay business model. eBay bought PayPal in July 2002, and then began to operate a ‘system lock in’ (Hax and Wilde, 1999) to using PayPal. eBay has tried to lock competitors out of eBay payments in a number of ways, including linking £500 worth of buyer protection insurance to its use, integration into the eBay checkout system and ‘outlawing’ the mention of some ways of paying, such as cash through the post, on eBay sellers’ item pages. PayPal has become part of the payment culture of eBay, and eBay sellers in the study have noted a reduction in other payment methods they receive (such as cheques), and few get paid via online banking transfers. The loss of chequing transactions will not affect the profits of High Street banks, as they do not charge private customers, and may be beneficial as counter staff would not be processing paid in cheques. However, in terms of revenue generating transactions, banks are certainly seen as the avenue of last resort for sending foreign currency abroad, and this is the area where substitution towards PayPal has occurred. Foreign currency transactions at a bank still require visiting a branch, filling out a form and considerable expense compared to PayPal’s arm chair payments and no fees for buyers. In terms of our third network, the Internet, during the period up to 2005, Broadband uptake in the UK has been very strong, and above the OECD average (see Section 4). Broadband users have been convinced of its benefits without the need for expensive advertising campaigns. For eBay buyers, being able to search quicker and snipe easier on Broadband was one factor in getting Broadband, while eBay was a ‘killer application’ in terms of subscribing to Broadband for regular eBay sellers. Many eBayers have already converted to Broadband.

1 Although the decision to phase out Post Office card accounts threatens them yet again.





The paper goes on to explore in detail the implications of eBay for the ‘real networks’ of goods distribution, money distribution and Internet infrastructure. It also explores how the presence, absence or problems with these networks affects the saleability of eBay items.





2 The distribution of goods

The advent of the ‘eBay phenomenon’ has relied very heavily on existing ‘real networks’ for the distribution of goods advertised on the site. Although ‘local collection’ is a part of the eBay landscape, and one which has become increasingly significant with the ability to search geographically and by post code (see section 2.3), most eBay items travel through the exchange process from seller to buyer via an existing distribution network of national carriers and private couriers. The Centre for Economics and Business Research revealed that £4 billion worth of trading was likely to be carried out on eBay this year, representing 1.3% of total retail sales, and that the auction site had particularly allowed people to realise the value of second hand goods they had sitting around in their cupboards (This is Money, 2005). International flows of material culture via these real networks are also a significant product of people using eBay to buy and sell. eBay is, of course, a global market place for goods, where sellers see selling globally as a way to expand their sales (Sinclair and Ubels, 2004) and buyers are taking advantage of eBay’s peer-to-peer global market for a number of reasons. The research reveals their primary motivations are to acquire collectables or other items from around the world which are not available in their own country (such as American radio sets or rare CDs). Buying globally is also used to defeat the ring-fencing of national markets, particularly taking advantage of earlier release dates of films in the US vis-à-vis the UK. Utilising global price differentials is also part of both collectables and new goods/ non-collectables purchasing on eBay, which increases the global flow of goods. Certain items, such as memory cards, are bought from the US because they are much cheaper there and postage is low on such items, while collectors in the study bought stamps or covers and radios because they were cheaper in the US for a number of reasons. Sometimes, US items are cheaper when offered for sale in the American market (eBay.com) because they do not have the rarity value there:

I do look on the American sites and obviously find, I’ve got a lot of covers signed by Astronauts and Cosmonauts, you know. That obviously are a lot cheaper in America, because they live in America. Um, or they seem a lot cheaper in America than in this country. Um, and you know sometimes you get a price in your head, thinking: ‘It’s got to be 20-25 quid.’ But when you work it out, you know in dollars now, they’re selling for about five or six pound. You get this feeling: ‘It can’t be right, they can’t be selling a John Glen for five pound, when you’ve got to spend sixty or seventy pound over here.’

(Gordon, cover collector)

Collectors have also taken advantage of newly opened eBay affiliate sites such as eBay Australia (eBay.au) or eBay New Zealand (eBay.nz) to get a bargain – searching there before other eBay collectors “eBay lookers” (Gregory, radio collector) realised that market had been opened up, and thus buying at reasonable prices because of the lack of competition. Finally, collectors have bought rare British items at lower prices from the rest of the world, because their rarity is not appreciated in that country, and often because other British buyers are put off by the perception of potentially high shipping costs. One radio collector bought a rare Chinese lacquer work Pye record player from the US for £100 plus £100 postage, when the same item would have cost £500 in the UK. High postage costs do not put people off buying globally if there is an overall saving. However, international eBay purchases do attract customs, duty and VAT charges over £18 for merchandise and over £36 for gifts. Those who deliver the goods (Royal Mail or private couriers) are also responsible for collecting this money. This can often be a shock for international purchasers the first time it happens, and certainly in the US there is the feeling that there is generally inconsistency in the application of taxation to Internet commerce (Nesbary, 2000) – the level of customs, duty and VAT to pay may depend on the description of the good on the customs form. They are also highly variable from country to country – in Canada the threshold is only $20 whilst in the US it is $200 (Sinclair and Ubels, 2004). Those bringing items into the UK via a private courier can always expect to be charged customs fees, eventually – whether phoned by couriers for credit card details or asked in a letter. Royal Mail appear to ‘sample’ the packages that come through, so eBay buyers can escape customs charges until they are picked. People resent having customs charges taken from them, and the Royal Mail or private courier as the agent of collection:





What is even more annoying is the Post Office charging you for helping customs to steal your money, because they’ve actually done this wonderful service for you and charged you for it. So that I do object, if anything would put me off from buying abroad, it would be the possibility of people getting hold of things and people wanting to charge me as they come into the country. That is just fundamentally annoying.

(Richard, radio collector)

The administrative fee Royal Mail and private couriers charge is also contentious, as seen above, and people also do not see why they should pay customs on second hand goods which are not affecting anyone’s jobs or being manufactured new abroad. Customs charges, as evident from Richard’s quote, are one element likely to dampen down international flows of goods (other than more obvious issues such as language difficulties, payment problems or poor perceptions of another country’s postal system). This is due to the extra cost, which may turn a bargain into an expensive item, but also because people perceive that customs have held up their goods through the postal or delivery system.

2.1 Royal Mail and Parcel Force – Impacts of eBay on mail and parcels

National carriers such as the Royal Mail and Parcel Force seem, from our study, to have benefited most from the rise of eBay trade. The Royal Mail’s brand strap line recognises its role in e-commerce by labelling it as ‘the real network.’ Research by the Post Office in January 2005 showed 74% of people selling goods on eBay were sending them via the Royal Mail (Henry, Goswami and Young-Abraham, 2005). This is partly because small and medium scale eBay sellers often don’t have easy access to an alternative means of sending their items, and the Royal Mail’s near monopoly for certain types of post:2 “But Royal Mail is always there, you know. I suppose your hands are tied really - it’s like belonging to BT - you can’t use your computer without going through a BT line.

It’s like tied to Royal Mail, there’s no other way, really.” (Sid, radio collector). Accessing couriers often requires a lengthy journey to an out of town industrial estate, or an account to be in place (for high volume sellers only) before they will pick items up: “The only thing about the Post Office is you have to take it down to the Post Office and that’s not such a problem. They’re [couriers] not very interested in the private person, they’re interested in regular business - firms such as Securicor and TNT, these sort of firms, want more regular business, they don’t want to deal

with the little man..” (Arthur, radio collector). Local Post Offices provide easy access to the Royal Mail distribution network, and surveys in the media have suggested that eBay has helped some of them survive in a climate where some face closure. In a Sunday Telegraph survey (Henry, Goswami and Young-Abraham, 2005), out of 100 post offices contacted by the newspaper, 76 identified regular eBay sellers as a source of their rise in custom. 67 of the managers contacted said that more than half of the parcels sent from their store were the result of eBay, and another 8 identified eBay as the source of three-quarters of their parcels business. Nearly 70% of the post offices contacted by the Sunday Telegraph had earned an additional £1,000 to £3,000 a week from eBay sellers. eBay sellers, themselves, perceive the presence of other eBay sellers when they are at the local Post Office: “…if I’m in the post office, the local post office, and there’s like half a

dozen of us with big piles of boxes and stuff, and we all look at each other out of the corner of our eye” (Alan, self employed eBayer) and also the impact of eBay on their own, often very small, local post offices: “Since eBay,

they’ve [my village post office] been sending out a sack a day of, erm, purely items for eBay. It’s like a whole business.”

(Focus group 2E). They also note the impact on the Royal Mail business in general:

A: […]And how many thousands of items are sold every day on eBay? Do they actually let anyone know, in the UK? […] I reckon, daily, even in England alone, it must be in the tens of thousands. So how much money is that generating for Royal Mail. It must be an astronomical amount.

(Focus group 3E)

Local post office staff had also discussed the benefits of eBay for their business with eBay sellers: “actually a couple of the staff have told me how much better [South West] post office had done since they had started to get an influx

2 The Royal Mail has now been opened up to competition in business and consumer markets since 1

st January 2006.





of ebay sellers in the local area.” (Alan, self employed eBayer). Deutsche Post, the national carrier of Germany,

has also seen eBay impact upon its parcels market. During the Christmas period, way back in 2003, 17% of all packages delivered by Deutsche Post were ordered through eBay (Libbenga, 2003).

This rise in Internet-related postal revenue is ironic given the earlier fears by national carriers of the substitution effects of the Internet for letter mail. A report has shown that 67% of users who tended to send more than five e-mails a day claimed to write less letters because e-mails had replaced letter writing, with these figures based on a representative panel of more than 2500 individuals from 1000 households. Substitution of e-mail for letter writing was also shown to increase over the number of years of Internet use (Pasquini; Velardo and Vicario, 2002). While household to household letter sending has decreased because e-mail is more immediate, quick and convenient, small packet and parcel mail has increased with e-commerce - "bits become boxes" (World Bank and Universal Postal Union, 2001: 8), and are higher value post types. As Hanley et al comment (Hanley, Ozawa, Schmid and Wang, 1996: x) "electronic purchases nearly always generate some form of physical fulfilment - the sending of a package, confirmation letter, bill, or statement". eBay users were responsible for 5% of all person-to-person shipments in the US during the last quarter of 1999 (Anders cited Boyd, 2001) and Birch, Gerbert and Schneider (2000) note that eBay related items accounted for more than 15% of all packages delivered by the United States Postal Service in 1999. eBay initially led to its own stream of UK letter mail, with many UK buyers paying for items with a cheque through the post. However, cheques going missing in the post, and the concomitant lack of trust that ensues between buyer and seller over whether the cheque has actually been sent, has led to many more people using PayPal to send payment electronically: “But we’ve had a huge number of cheques go missing in

the post. […] And it’s not uncommon. […] We … to the extent that we now prefer to pay Paypal if we can” (Martin, radio

collector). Using PayPal to send payment, even in the UK, has become more part of eBay culture since eBay’s ruling that sellers cannot pass on surcharges for using PayPal to buyers, and since the introduction of the PayPal Buyer Protection Scheme, which requires PayPal payment to qualify for up to £500 ‘insurance.’

With this paradoxical increase in the parcel and small packet business for national carriers such as the Royal Mail, the project explored perceptions of both the Royal Mail and Parcel Force from a range of eBay buyers and sellers involved in the project. This included collectors of radios and audio items, stamp and cover collectors, self-employed eBayers and eBay buyers with various levels of eBay experience who participated in the project’s focus groups. They were encountering the Royal Mail and Parcel Force through the rest of their everyday lives, but eBay participation was increasing their contact with both organisations. Some eBayers even began to ask whether eBay itself was responsible for perceived pressures on the UK national postal system in this period:

Do you think it’s a coincidence that the postal system seems to be falling apart in some way? Do you think eBay’s got anything to do with that? If it’s had a sudden impact?

(Brian, radio collector)

2.1.1 Perceptions of Royal Mail and Parcel Force

Perceptions of Royal Mail and Parcel Force during the fieldwork period were strongly influenced by two ‘Dispatches’ programmes made for Channel 4. ‘Third Class Post’ was broadcast on 29th April 2004 and the other, ‘Re-opening the Post,’ was aired on the 14th July 2005. Royal Mail subsequently complained to OFCOM that it had been subjected to “unfair treatment” in the first programme (Channel 4, 2004), and a joint statement was released from Channel 4 and the Royal Mail clarifying certain issues in the programme which were incorrect or mocked-up. Nonetheless, perceptions of Royal Mail and Parcel Force as organisations remained largely negative during the fieldwork period, partly based on footage from the ‘Dispatches’ programmes, and partly as a result of their own experiences as buyers and sellers. The fact that the Royal Mail had cut 30,000 out of 220,000 jobs during this period (Channel 4, 2004) may also have had an impact on actual experiences of those who were part of the study. The following represents a typical exchange about the ‘Dispatches’ programme during a focus group:





P: Often it’s not their fault. I mean, there was that Royal Mail programme on Channel 4 and I was horrified by it.

B: We all were [laughs].

P: It’s like, now everything goes recorded delivery. Anything that’s over …

B: Special Delivery on the floor and …

R: I just sent something Special Delivery up to four hundred pounds the day before the programme [laughs].

ALL: [laughs].

P: Yeah, I was, I was really shocked by that. Erm, I actually just thought my God. Erm, I’ve always got a certificate of posting just in case, but I’ve also had a few buyers give me the run around recently, so… it’s …. no option really.

(Focus group 2E)

The ‘Dispatches’ programme is shown to be the source of considerable anxiety about the fate of eBay items sent through the post. eBay sellers amongst the group are shown to defer the perceived greater loss of risk by taking more precautions – definitely getting a certificate of posting but also using higher value postal services which offer insurance or a signed for element. This section explores, sequentially, negative and positive perceptions of Royal Mail and Parcel Force as organisations, before looking in detail at eBayers’ actual experiences of those organisations’ services.

Royal Mail

The perceptions that eBayers in the study have of Royal Mail are largely based firstly on the type of problems typically experienced with a large postal system – damaged items, missing items, and late post. However, there is also a perceived change in Royal Mail over time in terms of these factors. As mentioned in the introductory section of 2.1, it is perceived that Royal Mail systems are breaking down or cannot cope with the volume of mail it is currently receiving, increased by eBay trade, while they are still ‘touting’ for new business: “A: And now they have eBay, growing like a cancer… S: But they can’t deal with the amount of letters they’re dealing with. Their spending huge amounts of money getting people to send more letters, but they can’t handle the number

their getting” (Focus group 3E). One of the most emotive problems which appears to cause extreme negative

perceptions of Royal Mail by eBayers is when items, particularly rare collectables, are broken in the post:

I detest Royal Mail. I absolutely loathe them. The whole lot of them are bloody muppets. They’re dreadful. I sent a beautiful bakelite radio to Ireland, the other week, and I wrapped this thing in layer upon layer upon layer of bubble wrap, I put it in a box, packed it round with newspaper, put that box inside another box which was also packed round with newspaper, sealed the whole lot up and sent it to Ireland. When it got there it was shattered. Even the dial was shattered. The only way they could have done that would have been to have thrown it, no other way it could have been done, and of course the man was distraught.

(Arthur, radio collector)

It is perceived that there is a general lack of care by Royal Mail employees, to the extent that items have been either thrown around, or as some quotations mention, used as footballs. This perceived lack of care is also regarded as perhaps malicious by some:

I think the Royal Mail are all right for small things. I think when it comes to larger - we’re talking about the parcel service really - it is a definite fact that if you mark it fragile, it will get broken. Um, but you’ve got to mark it fragile any way, because if it does turn up broken, then the buyer’s going to say: ‘Well, you didn’t sort of say it was fragile?’ So, you’re in a no win situation.

(Ian, radio collector)





Another serious negative perception of the Royal Mail amongst eBayers in the study is that they are ‘untrustworthy’. Partly this is about fragile items - that they ‘cannot be trusted’ with more delicate items - which has prevented eBay buying of such items: “I haven’t bought things like Bakelite radios, which are naturally fragile in the first place. So letting them loose with the post office isn’t a very good idea” (Oscar, radio collector). This lack of trust is also built up because of late and lost items in the post:

I’ve had bills arrive that have been red. I’m thinking: ‘But you haven’t asked for any payment. What’s going on here?’ And I had more of those. If one hadn’t happened, it’s like anybody - you could forget these things. But I’ve had so much that hasn’t turned up, and you add that to stories of a chap I know up in Stafford. He used to subscribe to the Radiophile, but he gave up - because he was never getting the magazine. And we knew that they were being a bit delayed - Chas is a little bit erratic about publishing dates, you know. So Chas initially got the blame, but it was more likely that it was post office. As I say, I wouldn’t trust sending anything remotely breakable through the Post Office.

(Oscar, radio collector)

The Royal Mail is seen as ‘unreliable,’ often because of highly variable delivery services in particular geographic locations, which is in turn perceived to be because they “don’t have enough postmen” (Bill, stamp and cover collector) or because of agency or ‘inexperienced’ postal workers: “We’ve got this postman, who’s obviously just recently been employed as a postman, he looked like he had two brain cells to rub together. He stood on our doorstep, he’s muddling through our letters, dropping them - and you think Christ, of this is the type of person

they’re employing, there’s no wonder they’ve got problems, you know” (Brian, radio collector).

Royal Mail is also associated with problematic perceptions in terms of its accountability for loss or damage of post, and also the role and efficacy of its customer service department. The customer service department is perceived as offering no solutions or explanations – even when a parcel has a tracking number: “People abroad have not received parcels, although you’ve got a tracker number. They go on the website to track it, and they still haven’t received the parcel, you know. So Royal Mail, I’ve written to Royal Mail, complained - and they say there’s really

nothing that can be done about it - they’re looking into it. That’s about all you ever get, you know” (Sid, radio collector).

When insured items go missing, customer services are again perceived as unaccountable in terms of paying the actual value of the item. Many eBay sellers in the study have mentioned the fact that Royal Mail does not accept eBay end of auction pages as proof of value. With collectable items, it is very difficult to prove value, and eBayers believe this is Royal Mail trying to avoid their insurance liabilities:

…mind you the Royal Mail are useless, when I post my jewellery by Special delivery insured up to £500.00, if it gets lost or delayed and you try to make a claim they ask for proof of value of the item, and a ebay invoice or receipt is not proof enough, so how can you prove its value if I buy the item at a fair and sell it for more then I paid, would I show that receipt and would they accept that ,(9 times out of ten I never get a receipt anyway ), and then I would not get enough compensation to cover what the bidder paid for the item ,I would be out of pocket, I think it is a very crafty system ,I am just lucky that so far my items were only late and showed up eventually, God only knows what would happen if a parcel did get lost. […] …every time I’ve tried to put in a claim, they’ve come back with some excuse. And it’s not good. I ask my customers to pay for insurance and tracking, because, as far am I’m concerned it puts their mind at rest, and as far as I’m concerned, I’m covered. And when you try and put in a claim, and they find any excuse not to.

(Valerie, self employed eBayer)

The perception that Royal Mail are trying to remain unaccountable is compounded for items which are not just lost but damaged. One radio collector talked about damaged items being sent back to Leeds in their original packaging, which for him added another layer of unaccountability for the Royal Mail – they could claim it had been damaged in this (uninsured) time of sending back: “But with the post office, you don’t get that. The post office want him to pack the radio up in its original packing, and send it to them in Leeds. […] Can you imagine doing that. And they also want him to send proof of its value, how can he do that with a vintage radio? Proof of its original posting, well I can do that, I’ve got that. And some other proof which was difficult to find, I can’t remember what it was now - four things. Now what a ridiculous system, which idiot thought this system up - sending stuff about that’s already been shattered, how do you know that when we send it to you, it isn’t at that time that it gets shattered, that it gets damaged.





You send it back and it gets damaged. They could say, ‘It was OK before you sent it to us.’ What’s the point of insuring

something of you’re not going to follow through on it. But they really are absolutely awful” (Arthur, radio collector).

Royal Mail are also perceived as ‘passing the buck’ in terms of blame, back to the customer, for choosing an inappropriate service: “And the other thing is improving their complaint handling really, because if you send something by normal post - they say: ‘Oh, you should have sent it by recorded.’ If you send it by recorded, you get: ‘Oh, you should have sent it by registered.’ If you send it by registered: ‘Ah, you should have sent it by some other service,’ and they’re always quick to, you know, effectively bump the blame back on the customer because of the Royal Mail’s inability to do what they’re supposed to do. They’re - ‘if you send it by this service then you’ll get more compensation, or better handling,

or whatever’” (Andrew, radio collector).

The Royal Mail is still in a largely monopolistic position for the majority of eBay buyers and sellers too, even though it has been opened up to competition and has always had competition from couriers, and this quasi-monopolistic position is a second important component of the perception of the Royal Mail. As has been seen from the introductory section of 2.1, Royal Mail are compared by some to BT’s infrastructure – just as it is necessary to use a BT line to use the telephone or communicate, Royal Mail is another perceived ‘natural monopoly’ who has to be used with no other choice possible. And like BT, whose Brand is coloured by its former status as a nationalised industry, Royal Mail is also perceived to be in need of more competition to improve its services:

W: I think the Royal Mail need competition.

A: Competition?

F: They haven’t got a very good […] right now. […]

W: They have like, you know, Watchdogs and stuff like that, but unless they’ve got competition pushing them in, and like giving people a viable choice, then I think…

(Focus group 2E)

The perceived quasi-monopolistic position of the Royal Mail (“We are tied to these people, really,” Sid, radio collector) is particularly resented when things go wrong. People would like an alternate provider to turn to, but are not prepared to pay more: “If there was anybody else who’d deliver parcels outside the UK, without it being

Royal Mail, at round about the same prices, I’d be grateful” (Valerie, self employed eBayer).

Not all perceptions of Royal Mail are negative, however. Some people believe that damaged or lost items in the post are the result of poor packing or using the wrong addresses, rather than being the fault of Royal Mail. Royal Mail are also perceived relationally to private couriers, and often come out favourably when comparisons are made. They are seen as the cheapest way of sending items, and also much quicker at settling compensation claims: “It took me six months to get my money back from City Link. Whereas the Post Office

when they’ve lost things, I’ve made two claims, and got that within a month, and without argument” (Derek, radio

collector). One eBay seller found them more trustworthy than private couriers:

…at the beginning I thought about using a private courier - but considering that the first and only item I sent by private mail - a piece of my artwork that was supposed to go to Portugal - wasn't picked up when it was supposed to be - got delayed at Heathrow - then got lost - then found again - I decided to use the post office. stuff has gone missing - usually in a strange void of Oklahoma and northern Texas - nothing ever seems to arrive in that whole area - very strange - but i do trust the post office - despite what people say.

(Alan’s Blog, self-employed eBayer)

Several eBayers were happy with Royal Mail and their service, because they realised the number of post items Royal Mail had to deal with, and the fact that they were sending and receiving items all over the world:





So far it has been amazingly good. As a buyer I can only recall one incident of damage - and that was down to the packing. To my knowledge nothing has gone astray. I have posted all over the world - and amazingly it has all got there - although it can sometimes take a long time.

(Niles, radio collector questionnaire)

One participant in the study recognised the influence the media has on perceptions of Royal Mail: “…but generally, if you ask me the question ‘what do you think of the postal service?’, I would’ve turned round and said, erm, ‘it’s

OK - it’s not as bad as the papers make out’.” And, indeed, customers are extremely happy in relation to one aspect of the Royal Mail service – the local, regular postman or woman – because of the high quality personal service offered. However, when the local postie is away or people move to a different area, they perceive the service as again highly variable in quality:

I live in a very remote area, in a village, we have a postal delivery by car, and Sue comes up in her little van, and if there’s no-one home, she puts it in the glass house and signs for it [laughter], and it’s such personal service. And that’s the thing about Royal Mail, it’s so inconsistent. I get the most phenomenal service where I live, and yet I know also that want I was living in other parts, when I was living in South Essex, it was very dodgy, a bit unreliable.

(Essex focus group 3E)

We find that sometimes that if we get a regular post person it’s brilliant, they know what they’re doing, they bring our mail promptly, usually first thing in the morning. We don’t wait until after lunch to get it, er, but if they’re off because they’re sick or having a break or something like that, we become second class citizens and that irritates because we’ve spent a lot of money with the post office and I think it was brought home to us that we sent out a very valuable document.

(Clive, stamp and cover collector interview)

In terms of perceptions of the Royal Mail, the relationship between a local, regular postman or woman is the biggest contributor to positive perceptions of the organisation. The local postie is known by name and has established a trusted relationship with individual customers in terms of the appropriateness of signing for items on the customer’s behalf when they are not at home3, and safe places to leave parcels (such as the greenhouse, above). When there is no local postie, this system is disrupted: “…because we know our Postman

by name, but when he’s on leave you get the parcels left on the backdoor-step in the rain and all the rest of it” (Martin,

radio collector).

Local post offices are also viewed very positively. Many eBay sellers talk of the personal service they get from them, especially when they have a lot of parcels to send:

PL: Although the village my mum lives in is in Wales, and it’s pretty good, actually, because it’s, erm, when I was there over summer, I used to be able to go in, like drop my stuff off and they would post it for me, stamp the certificate of posting, and I’d come in, like, later that day or the next morning, and I’d pay them. It’s a sub-Post Office so it’s slightly different.

RW & RE: Yeah.

PL: But they wanted the business because I was sending thirty-odd packages, so … and I didn’t want to queue up.

RW: My village Post Office doesn’t mail …. I just like drop it off and they fill it all out for me, because they know us, because it’s a small village. You just fill out the address and they’ll do it.

PL: I think they want the money, that’s the thing. It’s like, if it’s a sub-Post Office they depend on it. And I always get better service.

3 Which is technically against Royal Mail policy.





(Focus group 2E)

Local post offices are happy to accommodate eBay sellers, apparently, because of the extra business they produce. Some eBay sellers had built close relationships with their local Post Offices – some even saved boxes for their regulars, and this appeared to be part of a relationship of mutual assistance:

…was at the post office today - as I am most days - and they gave me a load of boxes as I said that I was finding it difficult to get a variety of boxes for particular items. Wasn't that nice of them. I must admit - building up a relationship with your local post office is well worth the effort. [SW England] Post Office know when to expect me and when are my busy days - they even seem to know when I've had a good or a bad week. I have said this before - but the woman who served me yesterday said that so many services had been taken away from the post office - that eBay had been a bit of a saviour to them. considering that I suppose I must spend about £100 a week on postage - and I'm only one eBay seller - they must do pretty well out of us.

(Alan, self employed eBayer)

Parcel Force

In terms of perceptions of Parcel Force, these are strongly interconnected with customer perceptions of Royal Mail’s standard parcel service, and are not strongly differentiated in people’s minds. As with Royal Mail’s carrying of parcels, the most negative perceptions of Parcel Force relate to items getting broken:

Um, I have heard Parcel Force referred to as brute force by some sellers, and I did receive, from [eBay radio seller] actually, a very, very well-packed record player, and at some point, somebody in Parcel Force must have stood on the parcel, because the lid of the player had been pushed down far enough for the autochange spindle to go through it.

(Richard, radio collector).

There is considerable anxiety about sending items via Parcel Force, because of this reputation: “well I normally now just say, I’ll say look, ‘You pack it up, I’ll get it collected’, so you haven’t, you’re not at the mercy of, you

know, Parcel Force, which is another element of eBay well, not concern me, but is a sort of a worry” (Philip, radio

collector). And yet Parcel Force also has its supporters, amongst those people who have had no problems with it, and because it offers a very convenient pick-up service with Parcel Force 48, for customers shipping more than a parcel a week. Some sellers believe Parcel Force’s ‘bad press’ with breakage is more the result of people’s inability to pack carefully:

G: I only use Parcelforce.

RE: Yep.

G: Erm, Parcelforce get a lot of stick…

RE: Yes.

G: … but that’s down to the people that pack the things. Whatever it is, if it’s packed well - and obviously you’re going to get some things damaged from time to time, it can’t be avoided. But packaging’s absolutely essential.

(George, radio collector)

This report now explores various customer experiences of Royal Mail and Parcel Force in relation to their eBay buying.





2.1.2 Customer experiences of Royal Mail and Parcel Force

Customer experiences of Royal Mail are revealed to be highly variable in the study. As mentioned previously, having a regular postman or woman with local knowledge and a knowledge of your preferences in terms of where to leave post when you are out, versus agency postal workers, seems to lead to better customer experiences at the customer end. As one radio collector, Allan, put it: “And whereas the normal postman knows

not to put letters through the letter box because the dog eats them, you can’t tell agency people that.” Geography also seems to play a part in the customer experience. Rural areas tend to have regular post men and women who stay in their jobs, rather than agency workers, but there are also post code variations, as this quote reveals:

A: I live in a very remote area, in a village, we have a postal delivery by car, and Sue comes up in her little van, and if there’s no-one home, she puts it in the glass house and signs for it [laughter], and it’s such personal service. And that’s the thing about Royal Mail, it’s so inconsistent. I get the most phenomenal service where I live, and yet I know also that want I was living in other parts, when I was living in South Essex, it was very dodgy, a bit unreliable.

S: I think it depends on the person who actually delivers your mail.

A: Yeah, and the local sorting… I heard the other night that IP has got one of the best records, because I’m in the Ipswich area along with central Suffolk, so, the IP zone apparently has the best record in East Anglia, but if you’re CO it’s absolutely appalling and if you’re Chelmsford it’s absolutely abysmally poor there. So if you’re postcodes a CM or a CO, you’ve got much more likely to get poor service.

(Focus group 3E)

As has been seen above in terms of perceptions of Royal Mail and Parcel Force, receiving damaged items is the principle negative aspect of the customer experience mentioned by eBayers. As part of the study, two different collecting groups were interviewed – radio collectors and stamp/ cover collectors. These two groups have very different items to send and receive through the post in terms of their materiality – radio collectors tend to send and receive bulky, heavy yet fragile items via the standard parcel service and Parcel Force at high cost, while stamp/ cover collectors send and receive envelopes which fit through the door. It would be expected that radio collectors would have had worse customer experiences of damage than stamp and cover collectors. Indeed, many radio collectors did receive damaged items or send items which were received damaged. Often, they acknowledge this is due to poor packaging. However, some packaged their items with considerable care or received well-packed items which were still damaged: “I put massive red labels on the box, ‘extremely fragile, please handle with care.’ You might as well write it in Arabic because they take no notice, they can’t take any notice. Like I said, in this case and other cases I’ve had where damage has occurred, everything’s been boxed thoroughly, and yet the damage occurs, and I really don’t know how they could have done this particular radio because it

was so well packed, it’s just hard to believe, and not only did they damage it, but even the dial was shattered.” (Arthur,

radio collector). Big and heavy items are regarded as ‘difficult’ to post, and one radio collector had so many radios smashed he stopped collecting: “Have had several radios smashed by ParcelForce. At one stage, I stopped collecting because of this. Complained to them on several occasions, but little satisfaction. I eventually got compensation in

most cases, but often after a lot of hassle” (Niles, radio collector questionnaire). Some radio collectors believed

the last ‘local loop’ to be involved in a lot of the damage – when items went out for delivery or had to be redelivered:

It does seem to suggest to us, that that’s where the bulk of damage occurs. I think if they can’t deliver it and they ring the door bell and there’s no-one there, they perhaps just sling it in the back of the van and couldn’t care less of whatever. […] That seems to be, to our point of view, to be where most of it happens. My partner buys quite a lot of bits and pieces on eBay - all sorts of odds and ends, you know not radio-related, just all sorts of bits and pieces, but as I say that goes to the PO Box, and again it nearly always survives. Whereas if stuff’s sent to home, it seems to have a worse survival rate.





(Andrew, radio collector)

While it was anticipated that radio collectors would have problems with damage, stamp and cover collectors were not immune. Often covers were folded, even when they were put in hardback envelopes by sellers and marked ‘do not fold.’ Automatic sorting also caused more problems for stamp/ cover collectors:

H: Oh yeah, I mean you get these pretty envelopes that says ‘Please do not bend or crush’, you know, and er… […] I don’t know if it’s the automatic sorting offices or what but er, I’ve phoned the post office on several occasions about this and haven’t got anywhere

RE: Yeah, did you get compensation for the damage?

H: Er, I got one book of first class stamps. […] With a letter saying that the problem was from my local post office and not, you know, from the general sorting offices. […] And I told them at the time that was absolute rubbish. […] And they said they were going to reprimand my postman who I know quite well. […] And he knocks on the door and says, ‘Look [H]., I’m not putting these through the door - look at the state they’re in’

(Henry, stamp and cover collector)

Missing post was also a major problem. One radio collector found that so much post was going missing, that he was having to get a certificate of posting to prove he had sent eBay cheques:

Um, yes - it actually got to the stage where I actually thought I must be going mad. I mean I joke about it now, but I had so much stuff go missing, um, or things that didn’t arrive, I should say, that I sent - that I was really starting to think I couldn’t have sent it. This business of: ‘Oh my God, I’m going mad - literally!’ You know. And I was so convinced that I’d posted it, but so much stuff was going missing that I thought: ‘I can’t have posted it.’ It’s only since I’ve started using - always, when I send anything, I get proof of posting. Not because it means it’s worth anything. But at least (a) if somebody doesn’t receive something, you can, at least, say: ‘I did send you something, honest.’ If I’m paying for something on eBay and the cheque doesn’t arrive, at least I can prove that I sent them something. And also for me, so I know I’m not going mad [laughter].

(Oscar, radio collector)

Oscar lives in a large urban area in central England, and some eBayers suspect that post going through large urban areas has something to do with going missing: “I do notice that when post does go missing it always seems to

be London for some reason” (Alan, self employed eBayer). The reasons for the post going missing are largely

opaque to the customers. Sometimes they feel this is nothing to do with Royal Mail – a result of bad handwriting on the parcel or even buyer’s fraud – declaring that they haven’t received an item in order to get another one. However, some stamp and cover collectors had their suspicions about why items had gone missing, although unproven:

W: […] In fact one month I didn’t have any covers sent to me although I’d ordered, and then I asked the post lady, and she said to me: ‘I don’t know, but there is somebody I know, that works at the post office, who is interested in first day covers.

R: Oh no.

W: So perhaps they’re being intercepted. Funnily enough, a month later, all the covers that I had were popped through my door. Not on a post day, but on a Sunday morning.

R: That’s very suspicious.

W: Yes it was. Yes it was suspicious. But everything seems to be going OK now. I don’t know if the person left, or realised they’d been rumbled or what. Yeah, so. But otherwise, everything otherwise seems alright.

(Wendy, stamp and cover collector)





The fact that postal workers were often interested in stamps and covers made stamp and cover collectors more suspicious about the whereabouts of missing items (although theft wasn’t proven), and many had experienced missing items. One collector had bought an entire collection from someone in Dover, which was sent by registered post, only to have it go missing at before its final destination. The collector was able to talk to a supervisor on the mail train, and the missing collection turned up late the following day. Stamp magazines also regularly went missing until they were wrapped in a grey covering, and one collector spoke of interference in the contents of her mail where a special label was removed and the item resealed. Sometimes theft of post occurred which was categorically nothing to do with Royal Mail. University students were particularly vulnerable to getting post stolen in multiple occupancy accommodation with open access pigeon holes, or student houses – and they would be unaware of the point at which the theft occurred.

Often items which people fear have gone missing eventually turn up late, and various forms of late post were a negative part of the customer experience. One radio collector, Henry, reported his experience: “…yes I sold some magazines to a chap in London a couple of months ago, er, and it took almost a month, it actually took three

and a half weeks, nearly four weeks to get to him.” Another eBay seller sent some kilt jackets with £100 insurance

through the post, which took two and a half weeks to be delivered. But complaints about late post also concern getting deliveries late in the day. Royal Mail have merged the first and second delivery, and many eBayers report getting post late in the day:

Because we’ve got security locks and our security locks here are off for two hours in the morning - quarter to seven ‘til quarter to nine - to allow the post in. Well, in the old days, they used to come in, and we get our post here, what, half seven at the latest. And now, well, I’ve had the buzzer go at half past two on a Saturday afternoon - ‘Yes, who is it?’ ‘Postman.’ And this is happening now every day of the week.

(Wilf, stamp and cover collector)

Some reported getting no post at all on some days, because they are considered a low volume round, and this is perceived to be exacerbated by the loss of their regular post man:

B: Er, in general I’ve had very good experiences of the post, except here in Macclesfield we have a problem in that we don’t have enough postmen. […] And so we go days without post. […] And if you ring up and say ‘Where’s my post?’ they say ‘Oh you’re low volume round and it won’t be delivered until tomorrow’

RE: Oh I see

B: And we have missing days. […] Er, and we don’t have the concept of our own postman

RE: You don’t have..

B: And so it’s nothing to do with eBay and nothing to do with collecting, it’s everything to do with the way the post office delivers its mail

RE: Yes, so you don’t have a regular postman who you can..

B: Well we did but er, he broke his leg or er, he was a young athletic guy who played football and he broke his foot or his leg, and then we ended up having stand-in postmen while he was off for months on end, and we’re still on this thing so our mail comes mid-afternoon but delivered by whoever feels like delivering it after they’ve finished their own work. […] And er, if there’s not very much of it, it doesn’t come until the following day. […] And the longest we’ve ever been is three days.

(Bill, stamp and cover collector).

Customers take a very dim view of having no post on a particular day, and some even feel they are being lied to when told they have no post, because they usually receive large volumes: “…what irritates us is when they turn round to us and say you haven’t had any mail when we know damn well we have because we know the sort of, we

know that we get it is an exceptional day if we don’t get a single piece of mail” (Clive, stamp and cover collector).





Many problems eBay buyers and sellers reported, occurred at the postman/ woman and customer interface. Some of these involved simple delivery problems, such as delivering to the wrong address, especially when redirections were in place. Customers never knew if these items had been put back in the post box for redelivery, even though opening post not addressed to you is a crime. Most problems occurred with ‘inappropriate’ leaving of mail. One stamp and cover collector, living in a London block of flats, found mail abandoned near the building’s lift:

And we’ve also come out, we’ve found the mail when we’ve gone out, the door at the end of the corridor to go to the lift, there’s mail stacked up outside the lift door. […] I’ve walked out the door to go down the corridor, and our mail’s just been pushed, the whole lot of it, under the door. […] No, I mean it’s just unbelievable.

(Wilf, stamp and cover collector)

For those living in individual dwellings, inappropriate leaving of mail when people weren’t in was a common occurrence. Some reported high value items being left visibly in porches in urban areas. Sometimes items have been left outside, exposed to rain: “… sometimes they leave, leave things at the back of the house, and they did

that with one of my boxes of Jiffy bags and it absolutely tipped it down, and luckily it had the box to protect it” (Focus group 2M). This was seen as particularly inappropriate for ‘signed for items’: “Well, my best experience, so far, is the postman chucking stuff over the back garden fence and it falling behind the flower pot. And he chucked two letters over

there that were meant to be signed for.” (Focus group 2E). People also resented ‘signed for’ items just being put through the letter box. At least three people interviewed had items delivered to their work address because of ‘inappropriate leaving of mail.’ If people are not at home, and no ‘appropriate’ method of leaving mail has been established (although this is technically against policy), such as putting items in a greenhouse or hidden area, then they believe a card should be left. But people often resent receiving a card through the door, which may mean a long and difficult trip to the sorting office for those without cars. Some students have even left it too long to pick up items, and they have been returned to sender. However, one respondent in the study received a card through his door when he was at home, with no knock at the door:

J: We’ve found the opposite, where…

T: Too many cards.

J: No. We’ve actually been sitting there are watched the chap call, come and put a card through the door and get back in his van and drive off…

M: Oh yeah?

[Loud group laughter].

J: So what’s happened there, it’s quicker for them to go round and put cards through, and then everybody goes and picks them up.

L: They don’t expect people to be there.

(Focus group 2M)

Another respondent reported that her post man or woman did not leave cards, so she had to trace back an eBay item when it didn’t arrive: “No, I have to know I’ve ordered something from eBay, it hasn’t arrived, check with

the person that they sent it, and then phone the sorting office” (Focus group 2M). In terms of the customer

experience, which is exacerbated for eBay buyers who are receiving a lot more mail than previously, procedures need to be followed rigorously for the customer to have a good experience of mail. ‘Appropriateness’ of leaving also needs to be established with individual customers if possible in terms of where items can be left and if customers would prefer it if they were taken back to the sorting office for security reasons (although this is against policy). However, it is difficult to see how this knowledge might be transferred to temporary post men and women.





In terms of the eBay postal experience, international mail warrants its own section. Many people are now receiving international mail regularly, bringing items unavailable in the UK, collectables and items which are significantly cheaper than available on the UK market. In terms of items going missing, people do not perceive that international mail goes missing more than domestic mail. However, the US post is regarded as a major culprit for lost post: “the US is really bad for lost post though. the UK post office will blame the US post office

for lost mail and the US post office will blame the UK” (Alan, self employed eBayer). Alan also notes “strange void

of oklahoma and northern texas - nothing ever seems to arrive in that whole area.” The US post is also regarded as

being slow compared to the Canadian or Hong Kong post. But, people often report they have lost no international items when they have lost several domestic items. There is also the perception that international post is often more carefully handled than domestic post:

I mean, I do get the sense that things get bashed about less in the international post than they do in domestic. […] Yeah, it is, but you know, if you just look at the state of the external packaging when it arrives. […] Er, very often it’s, it’s corner’s mashed when it’s come from 20 miles away, but when it’s come from the other side of the world it’s in pristine condition

(Henry, radio collector)

2.1.3 Unmet needs

eBay buyers and sellers in the study were asked if they had any unmet needs in relation to eBay and the post. Some of these were highly predictable in light of certain negative customer experiences of post, and Royal Mail’s recent change to one delivery a day. The first involved trying to prevent damage to the items in the postal system, and it was believed that this could either be achieved by more training (“And I think if anything could be improved, I think it would be training, I suppose. But it’s such a big organisation, and a parcel goes through so many parts of the network before it ends up at the buyer’s address, that it could be damaged anywhere along the

line. So it could be difficult” (Ian, radio collector)) or just being told to take more care – although

mechanisation was also thought to be to blame for damage:

Well, yeah I mean it can be, obviously if it’s in cardboard packages with ‘Please do not bend’ I mean, I think more care should obviously be taken, but I don’t know if it’s, you know, because most things are automated now, it just sort of you know, slides on down the conveyor belt and gets bashed at the end as it goes round the corner or something like that […] Or the amount of mail that’s on the conveyor belt, or is it manually thrown around I don’t know.


People also want more accountability and traceability as part of a standard service, rather than having to use Special Delivery as part of higher value services. One of the eBay drop shops interviewed only used Royal Mail for a few items vis-à-vis couriers, because of a lack of track-ability for the basic services: “Trackable is absolutely important. […] Royal Mail, we sometimes use them. Erm, but in terms of customer service there is

no track-ability” (Donald, eBay drop shop). A stamp and cover collector, Wendy, also commented that she’d

like her post earlier in the day – since the change to one delivery a day, she was receiving post much later, and felt aggrieved that this could be as late as 5pm.

In terms of more novel suggestions, eBayers wanted more integration of eBay and Royal Mail services, so that adding postage to an eBay end of sale happened in a seamless way, like paying via PayPal:

J: They [Royal Mail] could - the way that eBay and Paypal have integrated themselves, um, to do that would make life a lot easier if they built that process, so when the sale finishes, automatically e-mails are going off and you could just check the e-mail and it’s taken the money out of your bank account, paid the guy and everything. That process is absolutely brilliant. There’s absolutely no reason at all why they couldn’t join forces with someone like





Royal Mail, for ready reckoners, label printing, for all these sorts of stuff. And also, if it’s a large item, you could arrange for Parcel Force to, you know, come and pick the thing up.

R: So just have it as an integrated system?

J: As an integrated system.

(Focus group 3E)

Such a potential service was likened to Screwfix’s (the mail order DIY company’s) delivery services – next day, seamless delivery. This idea was replicated across two of the focus groups. In one focus group discussion, it was suggested that Royal Mail should move quickly to integrate with eBay, otherwise other competitors will move in: “Now why eBay hasn’t got their act together and done a deal with Royal Mail, Royal Mail are going to lose out big time, if someone says: ‘We’ll provide that level of service, and we’ll do it at a very discounted rate’”

(Focus group 3E). During our steering group meeting, a Parcel Force representative confirmed that the company was planning more integration with eBay. Another desired improvement was suggested by a stamp and cover collector, Mark. Mark collects high value stamp and cover items and buys from around the globe, but mostly from the UK, importing to the US. He also sells surplus parts of his collection. Mark can only get insurance up to $44 when buying stamps from the UK.

Finally, an unmet need that was specific to eBayers was that an eBay invoice or receipt should be seen as proof of value for insurance claims with Royal Mail:

The other thing is, of you take out compensation as I do with anything, I think the parcel is insured up to £20 or something like that, but then you can by insurance on top in different stages, er tiers. Whatever the item has gone for on eBay, you know, I’ll make sure the item’s insured to cover that amount. The problem arises though, if you do have to make a claim, the Royal Mail are very funny about the prices realised on eBay, and is that the value of it? […] Um. So I think they need to be a bit more flexible, um, I think on the one item I had to claim in that respect - I was very lucky that I actually had the receipt. And funnily enough, when I got the receipt out, I was rather surprised to see it was actually worth slightly more than what it went on eBay. So um, that went on and they couldn’t do anything. They actually had to pay out more in the end, so I was quite pleased about that.


It is notoriously difficult to establish value for many collectable and older items, which is ultimately why many are auctioned on eBay (cf. Smith, 1989; Pinker, Seidmann and Vakrat, 2003) in the first instance. Many collectable items do not have price guides, and do not come with receipts from previous owners, since they have been in people’s collections for years. eBay sellers have a liability with eBay buyers in terms of recovering the cost of their item with Royal Mail. If buyers have paid for insurance, they expect to be compensated for the amount they have paid for an item. With some PayPal payments, eBay sellers may have to pay out compensation for a lost or damaged item before Royal Mail pay them, and thus they are left exposed to any valuation disparities or problems. If it is true that Royal Mail does not take eBay invoices or receipts as proof of value4, then this is in disparity with a number of third party insurers who have grown up to reinsure the postal market. This includes one which works in tandem with auctionsniper.com, which eBay buyers use to ‘snipe’ items, and DSI (Discount Shipping Insurance). These only reinsure certain carriers (and not the Royal Mail), such as UPS, USPS and Fedex, and therefore mostly insure the US to UK postal market). They accept eBay valuations as proof of value, since they have largely arisen due to eBay trade and the problems of being unable to insure letter or small packet items cheaply via USPS.

2.1.4 eBay and post interrelationships

4 Our Royal Mail steering group member could not confirm or deny this, but acknowledged web page print outs were open to being

fraudulently constructed.





There are several direct interrelationships between eBay and the Royal Mail postal system, where the post intercedes in the eBay exchange process. At its most basic level, postal problems or their perceptions can stop people selling (or buying) on eBay:

S: It’s a residential area, it’s a cul-de-sac off a main road, in a block of flats, but…

A: But that’s the worst scenario, isn’t it.

S: But at the moment, I’ve moved house, and I’ve moved from number 27 to 37 [laughs]. I’ve done a redirection thing, and the postman keeps seeing things addressed to 37, and through the redirection, and being helpful and still thinking I live at 27, put them through the door of 27, and things like that. I can’t sell anything until this has been sorted out, I daren’t even sell because I just won’t get any payment. And it’s just that kind of thing.

(Focus group 3E)

eBay buying and selling requires a high degree of certainty about addresses and items being delivered to the correct address. The post and postal pricing structures also have an impact on what materialises on eBay, and weight is the critical factor. 2kg is the break point for international post. If items weigh over 2kg, they are very expensive to post abroad:

Er, for instance we don’t sell anything that costs over 2 kilos worldwide because it just costs an enormous fortune to send […] And you know, the buyers won’t buy it so, if we had a big tea set of china we would split it up into small packets that would cost less than 2 kilos, er, because of the postage rates.

(Helen, partner of self employed eBayer)

Some items, however, cannot be split up so conveniently (such as radios), and high postage costs in the UK often put off international sellers, unless postal costs are not specified at the outset, when the buyer either absorbs the cost or backs out. Sellers believe Royal Mail’s prices are high: “I know they would say that their prices are reasonable, but it’s noticeable for example, er, the cost of sending any given weight from the UK to somewhere

else is generally a lot more than doing it in the reverse direction” (Henry, radio collector) and that high postage costs

affect the saleability of their items considerably:

A: […]And it was so heavy, I couldn’t possibly post it. He wanted to pick it up anyway. When you’re selling a heavy item, I think it affects your prices. S: It puts people off. I mean I’ve sold books and often, because I start them all off at 99p or something, and, some computer science books cost £40 new or whatever, you know, normally you expect the price to go up quite a lot and normally it does. If they’re heavy, and the postage you list at £5, then nobody bids. Either because they don’t want to pay, or because they think it can’t be accurate, so they don’t trust you.

(Focus group 3E)

Postage costs intercede in the relationship between buyer and seller, and particularly interfere with trust, even when they are genuine. This is because postal charges are notoriously used to increase profits by eBay sellers – to cross-subsidise a low starting price to make an item stand out, to cover PayPal fees, or just to catch out the unwary. Although eBay disagrees with profiteering by postage, they believe postage must be agreed between buyer and seller before the end of a sale, and do not take action against profiteering which is only revealed when an item arrives with a post label showing that it cost considerably less to send than stated: “It’s my big gripe is that, ripping people off with packaging whilst you know as a seller you look at it and think: ‘I know how much it costs to package and sell, it is not £5.’ It is not £5. It will cost you a pound fifty to post, and probably 20p to package it. And I get really annoyed with people ripping off on packaging, and not putting down postage and packaging in the description, and only finding out what it is after, I’m very scrupulous about that. I’ll say: ‘This is going to

cost this.’ I always tell people what it’s going to be” (Focus group 3E). For heavy and bulky items like books, or

sending items abroad, actual postage costs are expensive, but may be misinterpreted as profiteering. As a result, some sellers try and keep postage prices to a minimum: “If it’s cotton, laundered and a little blouse it’s





going to be 50p. So I tend to do that, and do I try and keep it low though, because I know it does put buyers off” (Tamsin,

self employed eBayer and vintage clothing seller).

As can be seen from postage profiteering, the post is an intermediary between buyer and seller, and is used as another ‘actor’ in the exchange process to ‘obfuscate’ the actual price people will pay. The post is also used to create ambiguity in other circumstances, such as when as item is damaged:

I wouldn’t buy anything without a picture, I mean, sometimes the er, picture on eBay looks like it’s cover in very good condition and when you buy it it’s got sort of like a slight corner knocked or something like that. […] When you get it but there again sometimes especially with the post you don’t know if that’s the post, or if that was the case if that was advertised on eBay, and that was the actual picture and it did have a slight sort of bend on the corner


eBay sellers can pass off damaged goods as being in perfect condition before sale, in some circumstances. Buyers then cannot complain to sellers without them potentially blaming the intermediary – the Royal Mail. The post can also become an agent in seller’s fraud or buyer’s fraud. A stamp and cover collector, Frederic, bought an old photograph of a football club on eBay, but never received it after the eBay seller claimed it got lost in the post:

And I won the auction, and I got an e-mail after the auction from someone, saying they made a mistake, they meant to bid on that lot, but for some reason they didn’t and it ended, and whatever reason it was, and could they buy it off me? So I replied: ‘No, sorry, I actually want it.’ But then miraculously, the seller never actually sent it to me, and claimed it had got lost in the post. I suspect what happened is that this person who wanted to buy it, contacted the seller direct, offered him a lot more money for it, and therefore the seller made up some excuse of why they didn’t sell it to me.

(Frederic, stamp and cover collector)

The post was used to obfuscate the fraud, by being another agent in the exchange to blame, and can also be used as an excuse for delays while sellers disappear with the funds. Buyer’s fraud also occurs, where buyers claim items are lost or broken by the post, demanding a refund:

…had a problem with postage. a US customer had one parcel delivered but the other one hadn't turned up. i did offer her a refund if she was sure that the items were lost in the post - she waited a few days and then asked for a refund. i don't like these situations because i don't like letting customers down, but you also never know whether to believe the customer or not. i have read horror stories from sellers - on the notice boards - about dubious buyers with lines like 'the item got broken in the post and i want my money back' - and when sellers ask for some kind of proof of the broken piece - a photo for example - the item was thrown away in disgust by the buyer and the bin men have already taken it away - wheres my refund? hmmm.

(Alan, self employed eBayer, blog entry)

The eBay community boards report instances of buyer’s fraud (see Appendix, Figure 1). Sellers are advised to always obtain a certificate of postage, and to not refund before Royal Mail have refunded them. However, this is complicated by claims to PayPal for a non-delivered item – refunds have to me made by the seller for non-trackable items upfront. But the community pages also raise the question of what happens if Royal Mail in turn suspect buyer’s fraud, and whether Royal Mail have a ‘traceable’ system for non-recorded delivery items in order to identify buyer’s fraud.5 Indeed, it is unclear to what extent the Royal Mail suffers financially as a result of buyer and sellers’ fraud. The sellers may operate the fraud without claiming for the loss – merely supplying a refund as they have received more money from a second buyer. Buyer’s fraud is more likely to involve claiming back from the Royal Mail, although the seller may refund the buyer before the

5 From our steering group meeting, the Parcel Force representative suggested that non-recorded delivery items were not traceable in

the postal system.





Royal Mail has compensated them. Even if there are limited direct financial consequences for Royal Mail, the perceptions of Royal Mail are harmed by eBay buyers or sellers using the organisation as an agent to blame. However, the fact that Royal Mail intercedes in the buyer/ seller relationship can also mean that sellers are blamed when the post is really ‘at fault’:

But I had terrible trouble with an American woman with a sewing machine - Singers. It happened on the 9/11 event, and er, the parcel got delayed because all the parcels were delayed - the planes were grounded, and she gave me terrible feedback - she said: ‘I’ve been waiting 6 weeks for this parcel,’ and according to the tracker number I sent it six weeks previously. And I said due to the September 11th event - but she wouldn’t understand, you know. And then she gave me negative feedback, you know. R: That’s a bit much, isn’t it? S: It’s out of my control. This is what happens with Royal Mail, you see. They get late parcels and you can get negative feedback…

(Sid, radio collector).

The community boards also show evidence of people being left negative feedback for postal losses (see Appendix, Figure 2). Sellers can also be blamed when cash sent through the post unrecorded, goes missing – the involvement of a third party (the post) means that buyers can become suspicious. Sellers can potentially blame the post while pocketing the cash, and when the cash genuinely goes missing in the post, sellers are not believed:

You just reminded me of something - had I had any bad experiences, there was one with eBay. Somebody who ignored my note which said if you are an international buyer, I only accept payment by Paypal, I don’t want any other form, and they sent me cash 60 Euros, and I received an envelope which had clearly been opened with a note inside saying: ‘Here is 60 Euros,’ and there was nothing in it. And that took a little bit - obviously the guy was suspicious of me, and I was suspicious that he’d never put the money in, so there was a bit of a hassle with that. We never found the money. The guy, in the end, accepted - because by the time that occurred I had got a high feedback rating of positive, that probably I was not fiddling him - he actually, he didn’t leave feedback at all, he decided he wouldn’t leave any, and I never left any for him, and that was the end of it. Yes we did have 60 Euros go missing.

(Derek, radio collector)

At its most basic level, perceptions about the post can also stop people buying certain items from eBay. Those which are perceived as too fragile and large for the post, and cannot be collected in person either, are not bid on, such as with this television collector:

…there are certain models or styles that I would like that I still haven’t got - a nice early mid-40s, um, table top set - about ’47. There’s been to Philips ones gone recently on eBay - I would dearly have loved either of those from the same model, but they’re all so far down south that I couldn’t possibly fetch it. There was absolutely no way I would have trusted them to the post.

(Oscar, TV collector)

Perceptions of the post therefore help define what can be easily sold on eBay, with the fragile being potentially less saleable, or only receiving bids from those who can collect in person.

2.1.5 Royal mail and customer views on future directions such as volumetric pricing

As part of pre project proposal discussions with Royal Mail researchers in 2003, they were interested in finding out eBayers’ opinions on a number of future directions they were planning at the time – volumetric pricing, the provision of more packaging items at Post Offices (including ‘pre-pay’ crates or boxes, where the





price of the packaging was included in the postal price), and the provision of a special ‘fragile service.’ Later discussions also revealed an interest in the impact on Royal Mail covers.

Volumetric pricing

The Royal Mail have recently introduced volumetric pricing for UK letter mail, and Parcel Force also use volumetric pricing in sending some items overseas. However, there are no plans to introduce volumetric pricing for UK parcels. However, the participants in the eBay study were asked to assume volumetric pricing would apply to parcels. Few participants were positive about volumetric pricing. Its only benefit was seen for items which are relatively small but heavy, such as books: “…but books will be nice and cheap, that is great, if it means I can buy a book cheaper from eBay, and that book’s going to cost a little bit more than posting a letter, it’s going to

be good” (Focus group 1E). In general it was felt that volumetric pricing would be discriminatory for

particular types of material culture which had a relatively large volume but little weight. The price of posting vinyl LPs was a particular concern in some of the focus groups which contained university students: “I think the new thing they’re thinking of bringing in, where it’s based on size, well, 12 inch vinyl, that’s probably the end of that.

It’s going to cost a fortune to send” (Focus group 1E). Stamp and cover collectors had no strong views about

volumetric pricing, perhaps because they were unaffected by the changes. Some radio collectors felt that they may win out financially by volumetric pricing as radios can be small and very heavy. However, one radio collector identified some radio-related items that might be problematic: “It could be a problem, because some old equipment is light and is big, I’m thinking about old battery radios, sort of ‘20s stuff. I mean there is virtually

nothing in them, but they’re bulky. You would end up paying more” (Derek, radio collector).

Volumetric pricing for parcels, however, was seen as most problematic in terms of leading people to compromise the amount of packaging they use when wrapping up items: “If it’s by size then you’re going to cut down on the packaging, some people may be cutting down on their packaging so you get more damaged stuff through the

post” (eBay focus group 1E). “If you’re trying to be careful, because you know things are going to get damaged, you get

a lot more packaging - you put them in a big strong box or something, and then it just doubles the postage cost” (eBay

focus group 3E). This was the criticism most often mentioned by participants in the study. Concerns about volumetric pricing exacerbate people’s existing perceptions that items are often damaged by the Royal Mail or Parcel Force, and may also contribute to a loss of trust between buyer and seller over the veracity of postage costs quoted. Volumetric pricing is likely to make it more difficult for a buyer to estimate how much it would cost to post a particular item, and potentially more opportunities for postage profiteering by eBay sellers.

Currently, many eBay sellers use a combination of a pair of scales and the Royal Mail’s online postal calculator to judge the postal charges they should put on their item description pages. However, it is perceived that volumetric pricing would make it very difficult for sellers to judge the cost of sending their item without visiting the Post Office to enquire: “They have enough trouble with a set of scales. God help us if they

had to calculate or assess the volume of irregular solids (the KISS principal applies - Keep It Simple Stupid!)” (Christian,

radio collector questionnaire). Volumetric pricing is only perceived as workable if it involves very basic volumetric measurements based on maximum dimensions:

A lot of people will find the maths involved too complicated, for example. […] Knowing the general level of mathematical ability of most of the public, you know - a lot of people, you know, how often do most people have to think about volume? Most people can pretty much comprehend weight, and can look up a table of weight versus cost and manage to work that out, that’s not too difficult. Volume actually involves having to do some calculations. I think it will just cause confusion. […] The only thing I can see logical is if they - I have a feeling that they do this anyway - if they have an over-size thing. If one dimension of your object is over x inches or x metres, then it’s subject to special handling or something. […] If it’s larger than a metre or three quarters of a metre in any direction, then, you know, a different scale of charges apply, because that’s the kind of thing most people can cope with.






Packaging

Participants in the study were asked if they had any problems sourcing packaging material, and that Royal Mail were thinking of supplying more packaging in Post Offices. Participants were resistant to the idea of Royal Mail packaging because of the perceived expensiveness of it: “Tiny little piece of bubble wrap costs a

pound” (focus group 1E). eBayers typically used Staples or eBay to buy packaging material like Jiffy bags or

bubble wrap in bulk. Additionally, there was a lot of recycling of packaging materials, sometimes from being an eBay buyer: “And I always use recycled Jiffy bags - I always use recycled stuff from suppliers - I recycle everything” (Peter, radio collector). Many people in the study worked for businesses or owned businesses that had supplies of bubble wrap and boxes for sending items through the post, and took items to work to wrap:

Yeah, I do all.. I do mostly buying and a little bit of selling, er, selling as I said to a friend last night can be a real pain in the butt because you have to pack it all up, er, frankly, I mean, I work for an electronics company, a hi-fi company in [x] anyway, and we’ve got lots of cartons and packing lying around so I can take the item into there and pack it up, therefore the packing costs me nothing.

(Philip, radio collector)

Jiffy bags were unproblematic to obtain, but boxes a little more difficult. Some build relationships with shops who want to get rid of boxes: “Erm, I’ve got a couple of very good sources for packing materials, that are only too delighted to help me. […] I’ve got a large electrical company that does light fittings and what-have-you… […] and they save

all the boxes and everything for me”(George, radio collector). Others go to their local supermarket to pick up boxes. Many of the eBay sellers interviewed in the study took great pains and pride at wrapping securely, often making bespoke packaging from modified boxes and sculpted polystyrene.

Fragile service

Participants were asked if they would like a special ‘fragile service’ where fragile items were subject to more careful handling. There was considerable anxiety about sending fragile items through the post. eBayers were generally favourable, but there was a high degree of price sensitivity as to whether they would support such a service. The price they would pay is described in relation to that of a courier:

Yes, something where if they see ‘fragile’ written on the box, rather than throwing that even harder against the wall, they should be honouring the fact that it is fragile, but in all seriousness, a service which takes account of the fact that you’re sending something that is breakable - er, and that would obviously cost an extra fee - that’s absolutely fine, I’d pay that. Some people wouldn’t, some people would. But I’d personally be prepared to pay extra for special, careful handling. Something between the cost of a courier, who’s taking it individually, and the cost of ordinary mail. But something that does give you a little bit more security, yes.

(Richard, radio collector)

Many felt it would be exorbitantly priced, potentially because of the insurance implications. One participant felt that if an item was properly packaged, that there was no need for a ‘fragile service,’ and another attributed damage to mechanisation of the post. Finally, one respondent felt a fragile service was dangerous because items sent the ‘non fragile service’ way might be handled more roughly. In addition, he believes that this would make Royal Mail ‘unaccountable’ for damage – with the customer being blamed for using the ‘wrong’ service:





To a certain extent it would be quite good, but then it would also tend to be another excuse for the Royal Mail if something that wasn’t sent by the fragile service got broken. ‘You should have used our fragile’ service. And I think all it would mean is the stuff that wasn’t sent by the fragile service, would be even more horrendously abused, so… So to a certain extent I feel they should just take a little bit more care with everything there.


Royal Mail as Escrow payment intermediary

Ideas were raised at the pre-proposal meeting about the Royal Mail acting potentially as a payment intermediary – either having some kind of ESCROW service where they held the buyer’s money until the seller brought the item in to post, or electronic postal orders. However, eBayers didn’t feel they were lacking in payment intermediaries or payment choices, with the plethora of options including PayPal and BidPay (credit card based) and those which involve transferring between bank accounts (Eggpay, Nochex, Fast Pay). Indeed, since eBay have taken over PayPal, they have tried to create a greater PayPal ‘lock in’ (cf. Hax and Wilde, 1999) by only offering the £500 PayPal Buyer Protection ‘insurance’ when using that payment intermediary. ESCROW services of any kind were not used by anyone in the study.

Impact of eBay on collecting Royal Mail covers

During the course of interviews with stamp and cover collectors, some collectors mentioned Royal Mail branded covers. These were generally seen in relation to other cover manufacturers’ covers such as Benhams, Buckingham Covers or Cotswold Covers. The collectors interviewed viewed Royal Mail covers less favourably than the other cover manufacturers’ covers:

N: Cotswold, themselves - they are gold embossed you see. And they’re very nice covers. And sometimes the old GPO ones I what you’d call pretty bland, I think. Not much imagination, whereas something like a Cotswold, or like Ellie’s - Internet Stamps or Buckingham covers - they’re nicely illustrated, very nicely illustrated. Because of that fact, people think they don’t want the GPO because that’s blander, they’ll rather have a Buckingham or a Wessex or a Cotswold, because of the illustration.

(Neil, cover collector)

Many of the collectors interviewed collected covers for their aesthetic qualities, and it was felt that ‘GPO’ covers were more bland than others they could purchase. eBay has also opened up wider purchasing opportunities for collecting these other cover manufacturers covers at bargain prices, which may lead to substitution spending away from new GPO covers. Collectors also described GPO covers in a way that suggested they were of little real collecting interest – because of production numbers, they had little rarity value and therefore little market value in the long run: “I bought post office covers which was a disaster ‘cause

they’re produced in such huge numbers and nobody ever wants any of them” (Bill, cover collector).

2.2 Couriers

Most people in the study had experiences of couriers and eBay items. These experiences were often seen relationally to their experiences of Royal Mail and Parcel Force. Mostly, using Royal Mail and Parcel Force were seen as preferable to using couriers, except where items were being sent through a business which





had a long-standing relationship with a particular courier. Having a long-standing relationship and a valuable account made senders believe couriers would have to take more care or lose the business:

That’s it yeah, I mean, obviously no courier service is angel, and they’ve taken some of our products and bent them in two, but they’re on the sort of I suppose, the understanding is we’re shipping UK wide, I don’t know a hundred parcels a week or more, and obviously it’s a good account for them and you know, as soon as they start messing around we get them in and give them the fifth degree and if they don’t perform we get rid of them so, they’re tagged by their performance and the girls in the office are nicely, they don’t mind me sort of saying, ‘Look, I’ve got to pick up this other piece of rusty old valve equipment’.

(Philip, radio collector).

Often, those with business accounts could send heavy items cheaply than via Parcel Force: “I’ll send it via UPS, United Parcel Services, which is fully trackable, and because we have an account with my business, it’s not very

expensive for me, up to thirty kilos for less than £7” (Peter, radio collector). They also get their business couriers to pick up items they have bought from sellers. Couriers are also used instead of Parcel Force in particular circumstances. For radio collectors, the recent reduction in the maximum weight it is possible to send through the post has meant substituting to couriers for delivery: “I generally now, I think what started it was, earlier this year, I think it was the beginning of June, the Royal Mail did away with the up to 30 kg weight limit on the standard parcel service. I think it’s only 20 now. So, for the bigger stuff, forget it, they just won’t take it. So I have an account with Amtrack, and I’ve had no problems with them. And generally anything that’s valuable will go by Amtrack

now” (Ian, radio collector). Two radio collectors mentioned the reduction in the maximum weight had led

them to substitute to couriers for eBay items. Couriers were used selectively by eBay sellers instead of Parcel Force for a variety of other circumstances. More valuable items are often sent by courier because they offer a completely trackable system and because they can insure up to a higher value: “I’ve only had to use a carrier once, I used UPS, and that was to send a very expensive book to the States, that was because the Post Office wouldn’t offer insurance high enough, and also with a carrier you can follow its progress on the Internet, where it is, so if anything went

wrong, you’d know where” (Jason, radio collector). Trackability is also needed for issues of customs and duty.

One eBay seller had a customer who wanted to return a ring. It had been sent out by the Royal Mail Airsure service, but the sender could only send it back by UPS. UPS did not recognise the Airsure service as proof that the ring had been sent from the UK. Only sending via UPS on both legs of the journey would have meant a ‘get out’ for paying customs duty.

A variety of couriers were mentioned by eBayers, including Amtrack, City Link, UPS and Parcels2Go. However, couriers were generally regarded less favourably than Royal Mail for a number of reasons. Although Parcel Force is often colloquially known in derogatory terms as either ‘Brute Force’ or ‘Parcel Farce’ in radio collecting circles and by participants in this study, couriers are seen as taking even less care with fragile items:

Couriers I’ve actually found, tend to be worse. They’re not particularly careful with things, and I’ve watched them collect a box from here, which is clearly marked ‘fragile,’ and has a TV in it, and watched them heave it in the back of a vehicle, and said to them: ‘What on earth, are you doing, I just told you it was fragile.’ They say: ‘Don’t worry about what I do mate, just wait until they change lorries.’ That television did arrive smashed, incidentally. […] It took me six months to get my money back from City Link. Whereas the Post Office when they’ve lost things, I’ve made two claims, and got that within a month, and without argument.

(Derek, radio collector)

Again, as stated in section 2.1.1, the Royal Mail have a good reputation for a quick settlement of insurance

claims in relation to couriers. Other eBay sellers have had private couriers lose items – negating their perceived advantage of trackability and failing to justify their greater expense. Private couriers are also synonymous with not putting in the effort to find an address, and not leaving a card – leaving the customer unaware that their parcel is being held at a depot:





We live quite remotely, though, and that’s one of the problems we have is that they can’t find us, and then they never put cards through, and then you phone them up, and it’s like: ‘You were supposed to deliver something three weeks ago.’ And it’s: ‘Oh, we tried to deliver on the 25th of April.’ ‘Well, I’ve not received it.’ It’s like, you know, and then they lie and say they’ve left a card and they haven’t. And they tried to phone you, and they didn’t have a number, and it’s just lie, lie, lie! So, er, I would agree that the post office is my first choice of…

(Focus group 2M)

When private couriers do try and deliver, often people are at work, and since they require a signature, the goods are taken back to the depot. Unlike Royal Mail which has a good geographic coverage of sorting offices and post offices, private courier firms have few depots. Often the journey to the depot is long, and depots are not very accessible to the public – requiring people to visit at the end of the day, and by prior arrangement. This is compared in the following quote with the Post Office round the corner, with pleasant staff:

T: I’ve had worse experiences with couriers than Royal Mail, by and large Royal Mail, even if they take two weeks, are still my first choice for sending or receiving things, as opposed to couriers. Courier companies are just more hassle to deal with. Especially when their depot’s in Bury St Edmonds.

R: So, what particularly was bad about your courier experiences?

T: Well, first of all, the Post Office is round the corner. So when you go and collect the stuff, it’s much closer. And, um, the folks in my post office are all very friendly, nice old folk sort of thing. With City Link, you definitely need your forms of id, [inaudible, 413], there’s a big queue waiting, and I can only go and collect stuff at the end of the day…

L: I find them really rude, as well.

T: Yeah, [inaudible, 413] The Matrix, either spotty kids or rude people, and then there’s the one based in Bury St Edmonds. That was UPS, I went to collect something, and you couldn’t even get in the bloody place. I had to phone up their call centre to call phone their branch to let me in, which they didn’t do anyway, and they said they couldn’t give it to me, because they didn’t know I was coming, even though I’d called them three times. You know. So Royal Mail, they might get frustrating but their still better than the other people.

(Focus group 2M)

In addition, private couriers are seen as much more expensive than the Royal Mail, and likely to charge for services not requested – one radio collector was charged an extra £100 for sending a parcel to Japan, because the delivery driver ticked a box for the express service that they hadn’t asked for.

2.3 Local or face-to-face collection

Local collection or face-to-face tends to be an intrinsic part of the eBay experience through either buying locally, or buying an item that is too large or fragile to put through the post. Some of the radio and stamp/ cover collectors use their existing network of fairs, exhibitions or swapmeets in order to do face-to-face exchanges. Either the other collectors will be attending the physical event anyway, or they happen to live close by, as with the following example:

It happened to be some Disney covers that I bought that were mounted on cards bigger than A4. […] As big as that and I didn’t want to crease them and I said to this person ‘Look I saw where the address was and I was going to this fair’ it’s Coventry/Leamington Spa and it was sort of 10 miles, and I said ‘I can either drop them in or you can come to the fair’ and they came to the fair, and then I’d been there a couple of times since and they’ve seen me each time.

(Bill, cover collector).





Often with fragile or large collectable items, picking the item up from the seller face-to-face is the only method seen as ‘safe’ and as respecting the item with due care and effort. An entry from the eBay project’s three year ethnographic diary on the vintage radio collecting community shows this in practice:

One man stopped and looked at Brian’s damaged Ekco[radio] case. “How did that happen?” he said. “Postal damage,” I replied. He then launched into a tirade about how this type of set shouldn’t be sent through the post without a specially made packing case, and that special instructions should always be given to the carrier. He mentioned seeing many horror stories of people saying their radios had been broken in the post. He said: “Take a day off work, go and pick it up - often the petrol is less than the postage.”

(eBay ethnographic diary, radio collecting community, 18th September 2005, Harpenden)

Often people will wait a long time to pick up their items face-to-face – working it in with planned trips to see relatives or the next collectors’ fair. Furniture is often sold on eBay stating ‘local collection only,’ and this often works best in big cities like London – where there is the potential market and demand for the items. Buying and dealing face-to-face is also seen as the ‘safer’ option, as the items can be physically inspected before the cash is handed over. This is a strategy some buyers used with expensive items, such as computers, which have the potential not to work: “…with expensive stuff I go and pick them up myself so I can

check them out and see if they work, for example the laptop” (focus group 4M). For some people a face-to-face

exchange also reinforces their sense of being part of an eBay community with related social chat over a cup of tea, and allows them to see that their items are going to a good and worthy home where they will be appreciated. However, there is a negative side to local pick ups. With one buyer, the seller didn’t turn up with the item (a laptop), because the buyer believed the seller didn’t reach his desired price. Exchanges also tend to happen in the car parks of petrol stations or supermarkets, which may involve a degree of risk. Some people feel quite nervous about face-to face exchanges: “Yeah, only a couple of times, to pick things up off people and I thought they felt quite nervous about it I think. I mean I just came out, I was working in Basildon at the time and this person lived in Basildon, and I said: ‘Look, I work in Basildon, maybe I could just meet you somewhere,’ and that’s

what I did. But he was quite nervous about it…” (Focus group 3E). One seller met at an eBay University event

also felt quite nervous about face-to-face exchanges. She listed her geographic location, but there was always the expectation when people bid that they could pick things up in person. Her partner was away on business a lot of the time, and she was reluctant to let people come to her house. eBay can lead to unexpected people turning up on your doorstep. One student in a focus group had a knock at the door, with a local eBay seller delivering a CD he’d bought:

RE: But you’ve never met anyone face-to-face that you don’t, you now, you haven’t actually met before?

PL: I have once. I was staying with a mate called Long [? 499], and he uses eBay, and I bid on something at his house and I wanted - I was going to be there for a month - so I changed my address and the guy lived two doors down, across the street.

RE: Oh really.

P: So he walked over the street... and still charged me a quid fifty for postage and packaging [laughs].

R: [laughs].

P: I was like, well they, you know, they don’t have to. I mean I didn’t even realise, because I paid by Paypal and you don’t see their address. […] And suddenly this bloke just knocked on my door - or Rob’s door - and went here’s your item. And I was like [gulp].

A: [laughs].

P: Generally, I was just so shocked. I was just like, that’s really surreal.

K: Yeah. I think I would have been shocked if I’d have met this guy at my door.





P: [laughs] It wasn’t, because I didn’t know he was going to drop it round because I just didn’t, you know... I forget about it, because I get it in the post, and then suddenly this bloke is at my door giving me a CD.

The student said he would always post local items rather than offer to deliver them or have someone come round, in case he met someone he knew or could come in to contact with through his university. Completing the local exchange was perhaps perceived by him as creating more potentially ‘permanent’ connections than the usual fleeting engagement of eBay – they would know where he lived and it would be possible for them to visit him again.





3 Money flows

eBay-related money flows initially relied on traditional payment methods in order to conclude the sale, such as cheques, postal orders and cash through the post or various types of bank to bank money transfer. These methods of payment were often at odds with the immediate nature of eBay (cf. Gonzàlez, 2003) – often involving delayed payments (Jackson, 2004) and very little of the ‘arm chair,’ hassle-free convenience people had come to expect with winning eBay items. eBay initially did not want their own payment system, as it was not seen as part of their business plan (Cohen cited Gonzàlez, 2003), but eventually purchased Billpoint in 1999 after having problems getting online payments facilitated by existing financial institutions. A battle for customers ensued between Billpoint and PayPal, an independent online payments system, which had decided to build its payment network on top of eBay’s marketplace (Jackson, 2004). eBay tried to lock its customers in to Billpoint by introducing a checkout system which favoured Billpoint over PayPal (op. cit), which was compared to the tactics of Microsoft versus Netscape, although a user rebellion led to a u-turn (op. cit). However, PayPal’s revenue from auction transactions continued to increase, and they had 12.8 million users after 26 months of operation. Further integration of Billpoint and eBay posed a threat to PayPal, and with PayPal’s popularity amongst the eBay community, eBay eventually bought PayPal in 2002, and Billpoint was phased out in favour of PayPal (op. cit). PayPal was then integrated into the eBay checkout system. By the end of 2003, PayPal had 40 million users (op. cit). However, some eBay sellers requested the continued payment of invoices by traditional methods like cheques, because of perceived high PayPal fees. PayPal fees were only charged to the seller because of PayPal’s initial promise of “Always Free” on their website – when PayPal did not make enough money to break even from interest of money left in PayPal (people mostly moved their money out quickly), the decision was made to charge sellers because charging buyers had historically stopped them using the service (op. cit). In addition, eBay clamped down on sellers surcharging buyers for using PayPal, which meant sellers could not easily pass on the charges, which were significant for low value items. Other online payments methods which were free or where the buyer paid the charges became more popular, although eBay has apparently tried to create ‘system lock in’ to PayPal (cf. Hax and Wilde, 1999) with a £500 buyer protection scheme if you pay with PayPal (which is made very obvious in the checkout system when choosing payment methods), and the ability to search for items for which you can pay through PayPal. Non-PayPal items have to be claimed for through the slower Standard Purchase Protection scheme which pays out only £120 minus an administrative charge.

3.1 PayPal

PayPal is the leader in the online payments field (Gonzàlez, 2003), and is especially important in international buying and selling, where different currencies and very expensive bank charges (plus lots of form filling) make PayPal a relatively cheap and easy option. Paying by PayPal has also become part of the eBay culture: “It just seemed to be the thing to do, you know. There’s a button there saying ‘Paypal.’ This is what people

do” (Focus group 4M) for paying in the UK, and also enables people to buy items by credit card. PayPal has

certainly had an impact on money flows in terms of the amount of money being channelled through this financial intermediary. In terms of the impact of eBay on money flows, in the second quarter of 2005, 70% of PayPal’s payment volume was eBay-related, and the total gross payment volume handled by PayPal was $6.5 billion, up 4% from the previous quarter and 49% year on year (Payments News, 2005). It is unclear how much of this payment volume represents new money flows, and how much represents substitution away from other traditional and online payment methods. PayPal works on the basis of money flows between itself and credit or debit cards, and is not considered a bank in US law, or in the UK at present – but this is contentious (see Gonzàlez, 2003). The fact that people can buy on eBay (via PayPal) with credit cards may be leading to increases in personal debt and overspending. Indeed, a radio collector notes how easy it is to overspend with PayPal compared to taking cash to a swapmeet: “And it’s so easy to think, ‘Oh yeah, they’re doing Paypal, I’ll bid on that, bid on that, I’ll just put it on the credit card’ and it’s a danger, whereas I suppose with a swap meet you can go along armed with a couple of hundred pounds in cash and say right, you know, I’ve got £100 I can most definitely spend, there’s up to 150 if there’s something really good, I’ve got my money back up money and when it’s

gone, that’s it” (Philip, radio collector). One of the focus groups which consisted entirely of students reported

PayPal (and eBay’s) role in personal debt:





I think we have to be careful with systems like Paypal, because I’ve read a lot of things about credit card debt. You know I think it could cause people an awful lot of trouble, especially when it’s just ‘click.’ I’m friends with a first year student at a college in G_________, who has been a regular eBay user for several months. He’s bought lots of things, including almost completely useless pieces of junk, and spent a lot of money on there, mainly through Paypal. Um, and has got himself in an awful lot of debt, already in his first year. Um, and whilst I’m not a credit card user, he is, and has gone over his Barclaycard credit limit, which then gets him fined as well.

(Focus group 1E)

However the money flows associated with PayPal transactions need not come directly from debit or credit cards. Some eBayers were using PayPal as a way of balancing the books – using a PayPal balance accumulated from selling to determine their budget for buying:

That became a reason, one of the justifications for selling as well, we decided we’re funding the purchasing the clocks part with the sales, so it was nice, and we’d allow ourselves the luxury sometimes of bidding up to £12 [group laughter], oh, because we made some money that week on selling another bit of rubbish from around the house [group laughter].

(Focus group 3E)

People are financing the purchase of items they want by selling unwanted household items through eBay.

However, some people do not pay or receive payments via PayPal for various reasons, and this report next looks at perceptions of PayPal in order to understand the impact of eBay on money flows and which financial intermediaries are chosen to redistribute money between buyers and sellers.

3.1.1 Perceptions of PayPal

Perceptions of PayPal can be split down into the negative and positive. Those with the most negative perceptions of PayPal have either never used it because of those perceptions, or have stopped using it after registering - although stopping subsequently is unusual amongst the participants studied – only two people mentioned going back to traditional payment methods out of 71 registered users in the study (3%). Most of those not using PayPal had security or trust concerns, and indeed three out of the four who mentioned not using it come under this category – 5% of eBay registered participants didn’t use PayPal. One had seen a media report which put him off using eBay: “I thought I saw something in the press about them. Seemed a bit dodgy,

I think, so I just stopped using it. I just use a cheque mostly” (Focus group 2M), whilst the other had a combination of a poor customer service experience and so-called ‘phishing’ e-mails purporting to be from PayPal when they were actually a spoof, which put him off:

And er, we started getting spoof e-mails - we had a bit of trouble with PayPal because - what happened - you got the spoof e-mail, reported it to eBay, they come back and said: ‘Yes it’s a spoof e-mail.’ But when you went onto your account, you found that the actual spoof was there, in your account as well. It looked so genuine, that I thought… You couldn’t get a satisfactory reply from PayPal. What happened - PayPal used to be in the USA, with eBay. Then it was done through the European Union - they had a continental base. […] Yeah, that’s right. And when all the files were taken over to Ireland, they got lost or something. We had that confusion, plus the spoofs. In the end, I thought: ‘The whole thing sounds a bit kind of dodgy.’ So I took me credit card off of PayPal.

(Sid, radio collector)





Often those people who don’t use PayPal do not use online banking either, and they see themselves as “old fashioned” or “fuddy-duddy” although safe. Not using PayPal is seen as a way of protecting themselves financially from the general risk of computing and the Internet – from crashing systems to viruses on their own computers:

But no I won’t use Paypal, I don’t use Internet banking either. […] I don’t trust it I think it’s going to come.. well, it’s going to crash one day. […] The age I’m afraid where technology is advancing probably quicker than my years luckily but er, no I won’t use that at all. […] I’ve had a lot of problems where we’ve had viruses on our computer. […] And the system’s crashed for weeks, you know, it’s just been problem after problem so I don’t want to add to the problems if you know what I mean.

(Henry, cover collector).

For some, such as the students interviewed in the study, money was an aspect of their lives that they couldn’t take a risk on by using PayPal. Some people protected themselves by using a company credit card rather than a personal credit card. In terms of perceptions, the issue of PayPal and security produced a mixture of responses. ‘Phishing’ e-mails used the PayPal logo and typeface, and looked as if they originated from a PayPal domain e-mail address, while directing users to resubmit their username, password details (and other spurious details such as National Insurance number) to a website that looked like the PayPal interface – fishing for financial details. The web address of the spurious website is hidden behind a legitimate web address as the outer ‘label.’ These contributed to anxiety about using PayPal, as well as media representations of the company such as on BBC1’s ‘Watchdog’ or ITV’s ‘Tonight with Trevor McDonald’, which presented cases of ‘phishing’ and fraud. However, some participants saw PayPal as more secure than sending people a cheque – because your financial details are kept from the seller and stored by the intermediary, and because of PayPal’s Buyer protection scheme:

Oh yeah, PayPal is much more… Because you don’t - what I mean, the person you’re buying off of, doesn’t have any of your details, you know. It’s done through this independent company which is very, very safe. Millions of people use it now. We are protected to a certain degree. And if you’re actually buying something off a computer from someone you actually don’t know and haven’t met, there’s always room for some form of trepidation when I’m sending off money. The fact is, will I get my goods when I’ve sent my money off. At least with PayPal, you know, you have a certain degree of protection - they send you your money ad if the person doesn’t send, you can go back on PayPal and inform them the item hasn’t been sent, even though the payment hasn’t been made. It becomes like a blanket I think. They can stop like people, um, coming on to eBay and using the facility.

(Neil, cover collector)

PayPal is described as a ‘blanket,’ and is seen as an intermediary which reduces risk in the transaction. Personal recommendation and experience, as with eBay itself, has also been instrumental in getting people to perceive PayPal as secure.

Perceptions of PayPal are also negative in terms of PayPal customer services and their role in interceding between buyer and seller in disputes:

I’ve had a couple of - their ability to handle complaints is absolutely useless - I had a complaint against - referring back to the pirated software that I bought. Trying to get, you know they’ve got this complaint procedure - you know, the item is absolutely nothing like described and is pirated, and I think that’s quite clear cut. Trying to get PayPal to do anything about it - you know, you file a complaint and two weeks later they might send an e-mail out or something, and ask you something totally stupid and irrelevant. I had one incident where there was, it was actually on one of these situations where there was a complaint which was eventually sorted out between me and the seller correctly, and in the meantime the PayPal complaint was still sort of standing, and it had been standing for over a month. So PayPal effectively disowned it, not that they’d effectively owned it anyway, and got itself stuck in the state where - you know, the seller couldn’t settle the complaint. The complaint was outstanding, the money had been deducted from the seller’s account, hadn’t been credited to my account, the seller couldn’t do anything in his PayPal account to solve the complaint because it was more than a month old, and there was nothing I could do to resolve the complaint in mine either. E-mails from PayPal basically told us what to do and





do it in under a month, which completely missed the point, then in the end all I had to do was basically cancel the complaint completely from my end, and it all sort of cleared itself out again. But Paypal just basically - you know, has people who push the appropriate button and they put out the appropriate stock answer.


PayPal are perceived as offering stock responses to complaints which are irrelevant and not personalised, and the buyer and seller eventually resolved the dispute themselves. PayPal are also seen by participants as being unaware of national differences which make complying to rules difficult:

In a dispute with a buyer over an item lost in the mail, Paypal took the side of the buyer despite the fact that the buyer did not request nor pay for registered mail and attempted to recover the payment from me, the seller. Fortunately there was no money in my account or Paypal would have simply taken the money without recourse. Canada Post only gives proof of posting with registered or express mail. It was impossible to discuss this with anyone at ebay; ebay confines itself to form emails without reference to the specifics of the case. I considered Paypal's intervention to be an unjustified intrusion into a contractual relationship between the buyer and myself. There have been many other less serious problems with ebay prior to this but this was the last straw. I will have nothing more to do with them.

(Ernie, stamp and cover collector questionnaire)

Again, poor perceptions of customer service were formed through the inability to discuss the problem, and through the use of stock e-mail responses.

PayPal is also perceived negatively in respect to having ‘high fees’. While the eBay buyout of PayPal gave PayPal legitimacy to some who did not trust it before, the fact that eBay were gaining profits from not only the listing and final value fee, but also paying for the item, angered many:

But the thing is, it is owned by the same company and, therefore, it does wind me up that I then… So I’m paying to list my item, which is far enough, I pay my final value fees and I also pay on the fact that I’m receiving the money for my item. And that just winds me up. And I was chatting about this the other day and buyers are like it’s a convenience for sellers. But to me it’s not. I don’t care how you pay me, as long as I get the money. And I’m quite happy to go to the bank with my cheque. It’s a convenience for buyers because they get their items quicker. So I think, actually, that the buyers should pay the costs…

(Focus group 2E).

eBay sellers felt it unfair that they should pay both eBay and the PayPal fees, which were seen as “extortionate” and disproportionately high for what they do, in relation to eBay fees. PayPal is seen as a choice of convenience for buyers, and one that they should have to pay for. So after eBay introduced its surcharging policy, where eBay sellers were not allowed to pass on PayPal costs to buyers, some moved on to using online payment intermediaries which charged the buyer:

L: Yes it will. I’ll stop accepting Paypal. It’s OK for something that’s a couple of quid, where it’s only costing you like 5p or something, but if you sell something for like £30, it starts top add up, and it just eats into your profit. So I will stop accepting Paypal.

R: Do you currently, at the moment, charge the buyer a bit more?

L: I charge them 4% of the thing.

J: There’s a lot that say they won’t accept Paypal now. People won’t accept Paypal.

L: And that’s the reason why they won’t. Because if you bought something for a £100 from them, then they’re going to get charged £4.

R: So what are you going to offer instead?

L: I’ll just take cash or cheques. And Fast Pay. Because Fast Pay as a seller, doesn’t cost me anything.





(Focus group 2M)

On the positive side, PayPal is seen as the payment method which involves the least ‘hassle’. Many people didn’t like the effort involved in writing a cheque and enclosing a piece of paper with an item number and address: “So, I can sort of understand why they do it, and sometimes, if someone’s going to charge a PayPal surcharge, I work out how much that is, and if it’s more than the cost of a stamp, I’ll send them a cheque and pay by cheque, but if it’s comparable - if it’s about 30p extra to pay by PayPal, then I’ll do that because it’s quicker, and less hassle than having to

write a cheque and go and post it” (Focus group 3M). “Because I’m a buyer only at the moment, I only like using PayPal. Because I’m lazy, I’m just so lazy, I don’t normally get the cheque book out and the effort of writing a cheque [group laughter], and you have to write a little note to go with it, you know, because it’s just too rude not to. At least you have to say: ‘This is in respect of.’ Even that’s five minutes work. You know. Alternatively, I just press the PayPal button,

fantastic. And it gets to them immediately” (Focus group 3E). There is no reliance on the postal system to get the cheque to the seller, and no waiting for the cheque to clear – PayPal offers the immediacy that people require in terms of helping them get their item quickly: “And then you realise, ‘hold on, I was buying this because I want to get it soon,’ but in reality I’ve got to send off a cheque, and then wait for the cheque to clear, and then for them to

come back - and then not getting it for ages. But once you’ve got PayPal, it’s nice and fast” (Focus group 1E). Sellers

also prefer eBay from the point of view of receiving payment quickly and not having to take a cheque to the bank – the effort involved in people sending a cheque often means that they have to wait a long time to be paid. PayPal is also considered an ‘appropriate’ means of payment for electronic trading: “when you’re in the electronic world, I can’t for the life of me see why people can’t remain in the electronic world, and use PayPal or other

electronic means of payment” (Richard, radio collector).

PayPal is seen as the easiest and most convenient option by far by both buyers and sellers far international transactions which involve foreign exchange, and is perceived very positively for this class of transactions. For eBay sellers, there is less hassle in exchanging currency or trying to cash foreign cheques, which saves them time and money: “I’m quite happy to pay for that privilege, as I say, particularly when someone’s buying from abroad. You know, it’s no hassle at all. In the past I’ve had people send me foreign cheques and things, I’ve either had to go either up to the local airport, and their exchange bureau, or into the town. And it costs me money. Whereas with

Paypal, I just get a notification of the amount I asked for in sterling. So, there’s no hassle at all” (Derek, radio collector). For buyers, methods other than PayPal for international payments are described as requiring an “inordinate

amount of faffing about and expense” (Robin, radio collector questionnaire), and indeed money often does not flow internationally if PayPal is not accepted: “I usually only buy if they accept PayPal. On one occasion, I sent 20 euros, but would only send cash for small amounts. Unfortunately few sellers in Europe accept PayPal. This is because a lot fewer people have credit cards and generally mistrust them. I was told this in reply to a question about this on a German

forum” (Nigel, radio collector questionnaire). The ease of transmitting money impacts on bidding practices

across currency boundaries, and paying for items in the Euro zone is seen as particularly difficult as Europeans are reluctant to own the credit cards which are the basis for PayPal trading. Many eBay sellers realise that PayPal is the key to opening up international markets and money flows and therefore getting higher prices and profits for items (cf. Sinclair and Ubels, 2004). One Suffolk charity shop started accepting PayPal as a way of further opening up the geographic market for their items and to get revenue growth for their budget every year:

E: But I still had sales from America, erm, and Australia, and people would bid and they would be the winning bidders. And I would see, and it would be like, you know, to Australia! And I was like, oh goodness sake! I did it. I did do it and I’d take credit cards over the phone.

RE: Yeah.

E: So that’s the way to get round it. But now that we’ve got Paypal set up, it is so much easier and it just opens it up. I don’t know how it’s going to go, yet - we’ve only just started.

RE: What does Head Office think about… I mean, obviously Paypal’s got quite a lot of charges involved in it. Is that going to make a difference to things? Or does it not really …?

E: No, because it opens up the market.

(Charity shop interview, East Suffolk)





Accepting PayPal payments becomes the gatekeeper in terms of implications for other ‘real networks’ – as the distribution of goods by parcel and mail carriers only follows from the ability to easily make payments. Although PayPal is perceived to be extortionately expensive, it is considered much better value than more traditional payment methods in terms of paying for items abroad: “[…] they’re fantastic, because, as I say, it lets you, you know, if you had to go to a bank to send money to America it would cost you about £15. So, I think the fact that

they exist, is brilliant, and they’re secure…” (Focus group 2M).

3.1.2 Problematic aspects and desired improvements

PayPal is generally perceived as working well, and that if there were serious problems, they would lose out to their competitors: “I mean, if there was any problems with PayPal, I think they’d soon lose their business, you know, but because they’ve got it all up and running, and it is a secure way, the securest way, I think, of paying for an item on eBay,

or on a computer” (Neil, cover collector). However, there are some problems people have with PayPal policies.

The first involves when they start using PayPal for the first time. For security reasons, it used to be necessary to wait until your credit card statement came through to complete your registration. PayPal would charge a nominal amount to your credit card (such as $1 dollar) and attach a unique code to the transaction, which would then appear on your credit card statement next to the transaction. This code would then have to be entered into PayPal before you could start using the service. This created problems with payment delays: “You go and buy this item and you go and think about PayPal. And you think ‘oh, it will be nice and

easy,’ then you buy it, then you realise you have to wait until your credit card [bill] come[s] through” (focus group 1E).

However, PayPal now addresses this verification issue in a different way, and relies on the provision of a linked bank account, after a certain transaction value has been reached.

Another concern about PayPal’s policies involves the length of time it takes to get payment out of PayPal and into someone’s bank account. This is a particular concern for self-employed eBayers, as it creates cash flow problems for buying more stock, and there are immediate costs such as paying for postage:

“Yes it does, because it’s like ‘yes, I’ve had a fairly good week this week, but I’m not going to see any of it until next Saturday, and when I transfer money across from PayPal on the Monday, it won’t come through until Saturday. So I’m always a week behind. And then I’m having to pay - in the good week I’m having to pay all the postage from the bad week. You know, and I can’t buy anything, I can’t buy stock. And in a way, I’m living from week to week. It’s very difficult to save anything because you’ve got to put it all back in again”


This can be exacerbated, as Alan comments, if a ‘bad’ eBay selling week has to pay for the postage on a ‘good’ eBay selling week, due to the week delay in transferring money. There is resentment amongst eBay sellers that it takes three days to transfer money in the US, and five to seven days in the UK.6 This ‘American bias’ is also seen by one eBayer to manifest itself in the site’s language:

Um, I think they still need to get away from this Americanism, there’s still too many things about PayPal that are American. If you want to transfer your funds into your bank account, it takes 5-7 days here, but in America, it only takes 3 days. You know, so there’s still this Americanism about it. And some of the wording on the site is very American, you know, I think although their aimed more now for UK, in the way they do things, and in other parts of Europe as well - more sort of European now, I think there’s more they could do.

(Ian, radio collector).

6 These delays may be due to different UK banking arrangements.





Credit card chargebacks and PayPal disputes form the final thread of concern about PayPal’s policies. One seller had stopped using PayPal because of the possibility of credit card chargebacks. Credit card chargebacks are where the buyer asks their credit card company to take back the money from PayPal for an item. PayPal tries to defer credit card chargebacks by using their dispute resolution system, and there is a clause in the user agreement where account holders promise not to initiate credit card chargebacks (Jackson, 2004: 137). However, anecdotal evidence on the eBay Community pages suggest it is still possible to chargeback once, before your PayPal account is revoked. Sellers fear this and that they will also be part of a PayPal dispute. When sellers loose PayPal disputes, they often see this as unfair, with PayPal requesting trackable proof of postage that the seller did not pay for, being perceived as taking a long time for disputes to be settled (in the meantime, the money is frozen in their PayPal account), and buyers quibbling over descriptions which the seller believes are written in a non- binding way:

Erm, there are issues with Paypal, certainly.[…] Erm [inaudible]. If there are disputes, you know, particularly where the ‘not as described’ dispute, which [inaudible] is difficult. […] Yeah, I mean, we sell, I mean - I’ll give you an example - we sold an African mask… […] … so I got a seller saying this mask is from a tribe called [inaudible - hereafter XX] - you know, disregard the name as it could be any tribe. So we’re saying the seller believes this is from a tribe called XX. So we [inaudible] you know, and emailed us and says he wants to send this back as he doesn’t think this is from this tribe. Yeah, we are now in a difficult position. We don’t think we have to take it back but, you know, Paypal takes up to 3 months to decide on that. […] And there’s nothing really for them to decide, ‘cause, you know, you really need to go to the Victoria and Albert to get them to settle that dispute.

(eBay drop shop, Donald)

The seller has created ambiguity over the description so that it isn’t binding, because the seller is ‘unsure’ over whether the mask is from the tribe suggested by the owner. While the V&A can decide which tribe it is actually from, the liability is unclear.

The only desired improvements mentioned in relation to PayPal was that they should deposit funds more quickly to bank accounts in the UK, and that people should be able to hypothecate their money easier in their PayPal account to help them control their spending – one eBayer wished to be able to transfer £100 from his bank account to his eBay account, and that ‘overspending’ would not automatically be financed from a credit card.

3.2 Other online payment methods: Bidpay, Nochex, Eggpay, FastPay

At the beginnings of eBay, many people were signed up to a proliferation of online payment services:

L: When I first started, I probably signed up to quite a lot of them - I found out the other day that I am actually still registered for Bidpay, um.

A: Yes, I am - I wouldn’t know my password though.

L: Well I guessed, because I always use the same password, and it happened to work. So, I’m Fast Pay, Paypal and BidPay. But typically - there’s not many people accept Fast Pay, because I don’t think many people are aware of it, and it’s a UK service only. So, er, but it’s much better than Paypal, because, as I say, it’s 50p.

(Focus group 2M)

Only Bidpay allowed you to pay for items in other countries, and the buyer paid the fees. A cheque was issued in the seller’s currency and sent by post. Nochex allowed UK credit card payments and Eggpay and FastPay were BACS systems respectively from the Prudential and Natwest Bank, which meant bank account details were not directly revealed to buyer or seller. FastPay has subsequently stopped being available as a service. BACS transfers were also mentioned, and one eBay seller found that 60% of his customers used





BACS to send money as he provided his account number and sort code on the eBay invoice (Focus group 2E). No other online payment methods were mentioned by eBayers in the study.

In the study, using online payment methods other than PayPal was relatively rare. At the time the eBay focus groups were running (May 2004), there was a high level of discontent over eBay’s ruling on PayPal surcharges – that fees for using PayPal could not be passed on from the seller to the buyer. Some sellers decided at that point that they would stop using PayPal as a protest:

L: Yes it will. I’ll stop accepting Paypal. It’s OK for something that’s a couple of quid, where it’s only costing you like 5p or something, but if you sell something for like £30, it starts top add up, and it just eats into your profit. So I will stop accepting Paypal.

R: Do you currently, at the moment, charge the buyer a bit more?

L: I charge them 4% of the thing.

J: There’s a lot that say they won’t accept Paypal now. People won’t accept Paypal.

L: And that’s the reason why they won’t. Because if you bought something for a £100 from them, then they’re going to get charged £4.

R: So what are you going to offer instead?

L: I’ll just take cash or cheques. And Fast Pay. Because Fast Pay as a seller, doesn’t cost me anything.

(Focus group 2M)

Eggpay was free, Bidpay charged the buyer and FastPay and Nochex were cheaper than PayPal. One self-employed eBayer notes how more people are using online payments. However, most of these, by default, appear to be through PayPal:

…when i first started ebay trading - i suppose about 70%-80% of UK customers paid by cheque - now that's down to maybe 10%-20% - some weeks i have no cheques at all! it's interesting how UK customers have become more confident in online transactions - i've even had a few e-cheques from UK customers - and that was always a strictly US phenomenon!

(self employed eBayer, Alan)

PayPal appears to have secured its market dominance over the other online payments methods, and the eBay checkout system and the promise of £500 of PayPal buyer protection since eBay’s buyout of the company has created a high amount of system lock-in (cf. Hax and Wilde, 1999). It is surprising that another competitor has not moved into the online payments market who would accept credit and debit payments and make foreign currency payments, given eBay sellers’ resentment over the ‘no surcharging’ policy and their feeling that PayPal fees are ‘extortionate.’

3.3 High Street banking services

It is interesting that the only High Street bank to offer a separate online payment service other than BACS has since closed down the service – with Natwest closing FastPay. High Street banks are associated with eBay buyers and sellers in the study with cashing cheques, or being a ‘payer of last resort’ when international sellers won’t accept PayPal and they have to use an international draft. High Street banks are perceived in very negative ways by eBay buyers and sellers. They are seen as hard to access – either by being geographically difficult to get to without a car, time consuming to travel to, or closing at inconvenient times – such as 1pm on a Saturday. More than this, banks are associated with both a discourse of ‘delays’ and ‘hassle’ by eBayers, and are viewed in relation to ‘instant’ payment services such as PayPal. These discourses manifest themselves in a number of ways. The time taken for banks to clear cheques is seen to





cause delays for sellers who want items in their grasp: “Yeah, I was thinking about the very first time. And then you realise, ‘hold on, I was buying this because I want to get it soon,’ but in reality I’ve got to send off a cheque, and then wait for the cheque to clear, and then for them to come back - and then not getting it for ages. But once you’ve got PayPal,

it’s nice and fast” (Focus group 1E). Buyers also don’t understand why the UK banking system takes so long:

T: Well they don’t er, I think several of them for international buyers they won’t let you use PayPal.

RE: No, sometimes they won’t, will they?

T: No, no so we usually just send a bankers draft or something like that. […] That can be quite er, I mean, it gets there within, I mean, the big problem is getting it from the bank, that takes about 5 days and it takes about 3 days normally to get to the US, you know. […] So I mean that’s, you know, a bit er.. why it takes 5 days to get one from the bank I don’t know really.

(Tom, radio collector)

Cheques are seen as a particular hassle for sellers because they have to go and pay them in, which can cost them time and money. Getting buyers to write a cheque and send it off quickly is also difficult, as has been seen in section 3.1.1. Writing cheques, putting in a note with an item number and putting it in the post is seen as a ‘hassle’ compared to paying by PayPal, and cheques often come in much slower than PayPal payments. Many eBay sellers send the item before payment has cleared so they can take batches of cheques to the bank:

I’m Paypal, yeah. I love Paypal. I wouldn’t sort of say no cheques, but I really hate cheques. I mean, even to go into town and park, you know, and pay two pounds to park and go to the bank, each time you get a cheque, and because I tend to do like twenty odd items a month, and then I don’t do any for a while, so I’ve just got cheques dribbling in, because people don’t send cheques for days. I get one coming in, and then another one two days later. And to go to the bank for every single one - I just hate that. Don’t tell anybody but I tend to send things out without waiting for the cheques to clear now. Um, because I can’t be bothered, and I just take them in at once. So far, I‘ve never really lost out.

(Focus group 3E)

eBay sellers can also be questioned on whether they are running a business from their personal bank accounts. In comparison to PayPal, using High Street banks for eBay buying and selling is seen as a much less convenient service, even though paying by cheque is free for buyer and seller. The banks are seen as the ‘payer of last resort’ for international payments as they are perceived as the worst of both worlds: expensive “bankers draft / currency exhange a rip off” (Christian, radio collector questionnaire), slow, and involving hassle – as seen in section 3.1.1 as requiring an “inordinate amount of faffing about and expense” (Robin, radio collector questionnaire). One international buyer had a sterling chequing account to try and offset the expense and difficulties of international transactions, but this was rare amongst those in the study, and no UK buyers had foreign currency accounts. No UK buyers mentioned using international money orders arranged through their bank or any international electronic payment transfers (such as Natwest’s Relay).

3.4 Cash in the post

Sometimes, eBay buyers circumvent the High Street banks completely when they cannot pay by PayPal – by paying by cash through the post. As post offices now offer commission free currency services, eBay buyers can buy foreign notes and send them at the same time. eBay buyers acknowledge the risk in sending cash through the post. Most only send small amounts: “On one occasion, I sent 20 euros, but would only send cash for

small amounts” (Nigel radio collector questionnaire), or at the seller’s risk: “On occasion (Holland) they prefer

American “cash” and are willing to take the risk of a loss” (Mark, stamp and cover collector questionnaire). Others





hide the cash in Jiffy bags or with other papers, and send it by registered post so that sellers cannot claim it hasn’t arrived: “Cash to America, yeah. That’s really risky but I tend to use recorded delivery at the post office and I’ve

never had any problems at all. I’d never do it normally, but recorded is OK” (Focus group 3M). Anecdotally, more

cash was sent in the post in the early days of eBay, before PayPal was widely used, but is still an option for buyers who purchase from European sellers who have not widely adopted PayPal. However, as of the 1st December 2005, eBay has announced that they will try and outlaw cash through the post as an option for payment (General announcements: ‘Paying Safely: The Key to a Succesful eBay Purchase’). Although this is ostensibly about reducing the risks of paying on eBay, and the problems of trust in sending cash (seller’s fraud, theft in the post), it also locks users into using PayPal.





4 Internet infrastructure of e-commerce

Browsing, buying and selling on eBay requires using the Internet – a ‘real’ network that eBay relies on. Many eBayers began their eBay experiences using dial-up Internet connections, before moving over to faster Broadband services. Those who lived in large urban areas such as London made the conversion early on in their eBay experiences, while those in more geographically remote areas still did not have access at the time of their interviews. Some eBayers were still connected up via dial-up for various reasons including cost. However, eBay not only relies on Internet infrastructure, the Internet infrastructure also relies on eBay as one factor in the take-up of Broadband services. eBay usage also encouraged the parents of one eBay user to use the Internet in the first place and browse it more widely.

4.1 eBay and dial-up

Using dial-up was an experience that most eBayers had when they first started using eBay. These early experiences were described as “frustrating,” and eBayers reported that they were cut off by their Internet Service Providers, which proved very difficult for sellers listing items, as they’d have to start all over again:

Yeah. We started off with Virgin Internet provider, and it was dial up. Um, but, with dial up, sometimes they will take you offline, and then you’re stuck. That’s what I mean, if I turned the computer off and I couldn’t get back online, and if I was in the middle of wanting to list something, I’d be stuck..


For browsers, the dial-up Internet was very slow for downloading pictures, which is the basis of most eBay looking, and they were “sick to death of their 56K modem” (focus group 2E):

G: No. I used to get indigestion watching the green bar go across. RE: [laughs]. G: Erm, particularly as people often don’t know how to scan the pics and they scan them at, sort of like, three-hundred dpi or something. […] You know. The screen can only read/ view seventy-five but they still scan at three-hundred, and on a dial-up it takes like for ever - you can go and make a cuppa tea while the picture downloads.

(Gregory, radio collector)

For those still using dial-up charged on a per minute basis, it tends to mould and constrain their experiences of eBay and the Internet in general. They ‘click on and off,’ using eBay in a ‘no frills’ way, avoiding the luxury of looking at eBay community pages, and just looking at eBay to buy and sell:

S: […]I don’t, this is another problem. I’m on what you call ‘click on and click off, penny a minute, with Tescos.’ […] I find that, you know, if you go onto community, do all this and other things, you run yourself up a bit of a bill, you know. But when I added it all up in the end, you know - telephone bill comes in every three months, and an average of about £50 for the lo-calls - clicking on and clicking off. So if you divide that into three, you know - might just as well sign up and go online with a direct debit or something really, mightn’t you? R: You might as well get Broadband for that, Sid. S: So you haven’t really saved anything. Well I don’t go on community or do anything unnecessarily that will involve using the phone, you know. That is the only reason. I use eBay to sell and that’s it, you know.

(Sid, radio collector)





Most of those people still using dial-up have a fixed price per month package. They are still on dial-up for a number of reasons – concern about hacking and viruses when on Broadband, the cost and also lack of effort in looking for the alternatives:

I’m just lazy at times. I mean when we had the computer, when I went online first, my wife insisted I have another line in the house, so she could still use the phone if anything went wrong with the grandchildren, or anything like that. And what I’m paying now to have a separate line and the normal kind of narrow band, it would probably be cheaper if I went Broadband like and got rid of the second line. But I don’t know. When you phone up the GPO type of thing, and they send you e-mails and ring this number, I just leave it like, innit. But… I must go on Broadband one day, but my Mrs would say: ‘I’ll never get you off the bloody computer then.’

(Gordon, cover collector)

This quote is interesting, as it also shows the domestic context of eBay use. Being on dial-up, which limits eBay usage to short bursts because of the slowness of the system, makes it acceptable to Gordon’s partner. Being on the computer all day, spending more time on his hobby, would be unacceptable in terms of household politics. Some eBayers also only have dial-up at home because they browse eBay at work on a Broadband connection.

4.2 eBay and Broadband

4.2.1 Role of eBay in the take up of Broadband

As soon as Broadband became available to eBayers, many of them switched over to it. For many of them, making it easier to use eBay by being on Broadband was one factor in their decision to switch, as part of general difficulties surfing the Internet and downloading on dial-up. Downloading Microsoft updates was also mentioned as a factor. Many additionally wanted to release their phone line for incoming calls. In terms of being a so-called ‘killer application’ or ‘killer ap’, eBay was a ‘killer app’ for those selling regularly on eBay – as Bill, a stamp and cover collector says: “I think it’s much more to do with listing that to do with browsing”. All of

the regular eBay sellers interviewed had moved over to Broadband, and describe a situation where they would not be able to be eBay sellers without it, because of the time it would take to upload pictures:

D: I wouldn’t be able to do it without broadband RE: No, have you D: That’s a definite.. you’ve got to have really, mainly for the time it takes to upload the photographs and stuff RE: Yeah, have you had for a long time? D: I don’t think we’d be able to do it if we didn’t have broadband RE: Yeah, have you had it for a long time? D: Er.. I think we must have got it probably when we started, when [Stewart].. did I have it beforehand? Yes, we did have it before he did his business so we must have had it since about 2003, er, but we’ve upgraded to a faster version of it RE: Oh right, so you’ve paid to have a faster broadband, yeah D: Yes, we have paid to have not the basic standard but a better, a faster connection because of the, you know, it just makes life easier and quicker than waiting for uploads

(Helen, partner of self-employed eBayer)

As seen above, sellers also need reliable connections that they were not getting with dial-up. The ‘always on’ component is also necessary so that eBay sellers can answer questions from potential buyers whenever they come in, as is the 24/ 7 nature of eBay. One eBay seller, Alan, ruled out moving to a village without Broadband because of his eBay selling:





A: Yes, I couldn’t manage without that. I mean, before I moved here, I had to find out whether it did have Broadband. I can’t actually move anywhere that doesn’t. R: Yes, I imagine there are still some [villages in SW England] that don’t have Broadband? A: There are, we were thinking of moving to one place, and it was said they were going to have Broadband in a few months time, and I was thinking: ‘I don’t know.’ And then of course, it’s been put on hold, so no. You know, it’s got to have Broadband.


None of the eBayers who had switched to eBay mentioned going back to dial up. In fact, one radio collector, Gregory, commented: “well, you’d never go back, would you?”

4.2.2 Broadband and how it changes use of eBay

Switching to Broadband tended to change people’s use of eBay in a number of ways. They could spend less time searching for the things they were interested in, or browse more in the same time. Some eBayers felt dial-up was “time-wasting” and that Broadband recovered their lost time:

Well, of course the pictures come up straight away so it’s… you were actually spending less time because the pages were loading. […] So you were actually spending far less time because you could actually quickly flick through, whereas before you’d been sitting there, you know, watching paint dry on slow old dial up, um, you know, so it’s now much more disciplined - I now quickly go into radios and audio, and have a quick look - look at what’s ending and what’s recently listed, and forget the middle bit. That’s how I do it.

(Peter, radio collector)

Broadband also led to more eBay browsing in some instances due to the unmetered access, and the fact that it was ‘always on’ and accessible all the time – with no need to dial up the connection:

If I had to go back onto modem, I certainly wouldn’t spend anything like as much time looking on eBay, simply because time is money, then. You know, you’re paying for every minute. So, it gets quite difficult when you’re not on a Broadband connection because you think: ‘Hang on, I’ve got to dial up and connect first, and I’ve got to pay for this by the minute, you know. Whereas I’m just used to the Internet being there all the time.


Others felt Broadband altered their eBay experience by making sniping easier – allowing them to quickly refresh the page and enter a bid in the last seconds of the auction. However, for some eBayers, switching to Broadband has not been the panacea they expected as the limitations of their own computers (RAM and processing power) has meant the Internet experience is still frustrating and sluggish.

4.2.3 eBay and marketing Broadband

At the time our project proposal was written, it was felt that eBay could be a way of marketing Broadband to those still on dial-up. However, the conversion to Broadband during 2004/ 2005 has been remarkably high, without the need for aggressive marketing. In June 2005 there were 8,095,000 UK Broadband subscribers (OECD, 2005). Broadband penetration (per 100 inhabitants) had shown a net increase between Q2 2004 and Q2 2005 of 6.11 compared to the OECD average of 1.48 for the same period (op.cit). The Office of National





Statistics meanwhile revealed that the UK had 12.9 million Internet users who accessed from home, 55% of the population (National Statistics Online, 2005).

Those eBay sellers who sell regularly are likely to have gone over to Broadband as soon as their exchanges were enabled. Remaining dial-up customers are still using dial up because of the perceived effort in switching – finding a reliable provider, installing the software – cost, and fear of hacking and viruses. If dial-up customers are to be converted to Broadband, then prices need to fall still further for highly price sensitive customers, and switching must be presented as an easy and safe process, with reassurances about hackers and viruses, and possibly the option of purchasing a firewall and antivirus software at the time of signing up for Broadband. Using eBay is certainly one factor why people may switch to Broadband, and marketing could explain what aspects of the eBay experience is made easier by a Broadband connection – easier and reliable listing, being able to browse for more or in a shorter space of time, accessing eBay anytime – such as to check ‘My eBay’ or see bids finish, and to be able to ‘manually snipe’ more easily.





5 Conclusions

The ‘eBay phenomenon’ (Bunnel and Luecke, 2000) has had interesting and complex implications for the ‘real networks’ which underpin the peer-to-peer exchange of goods.7 The amount of items being sold on eBay has not merely put pressure on existing networks or increased their business, but led to complex negotiations by eBayers in terms of choosing between existing intermediaries and cherry picking their services, and substituting their business to new intermediaries which have grown up to cater for eBay and e-commerce. In addition, eBay is not only supported by the ‘real networks’ of distribution, money and Internet infrastructure, it in turn has supported them. Without eBay, it is likely that many more local post offices would have closed in that period (cf. Henry, Goswami and Young-Abraham, 2005) due to diminishing revenues from elsewhere in the business such as from handling pension payments, which are now paid directly into bank accounts. The ‘real network’ was likely to have shrunk in size, making it more difficult for people to access postal services locally. eBay has also been one factor in encouraging the fast adoption of Broadband by eBay buyers, and is the ‘killer ap’ of Broadband adoption for eBay sellers – who cannot sell and list on a regular basis without it.

eBay makes highly visible problems with existing ‘real networks,’ particularly with its globalising effects on the exchange of goods. In terms of the money flows behind the exchange, traditional banks are seen as very expensive, slow and highly administrative in terms of being able to deal with foreign currency transactions. These foreign exchange transactions have particularly been substituted away from banks in favour of PayPal, which has the arm chair, click of a button payment convenience that eBayers are used to in bidding for items. Although banks have BACS systems and online banking as ways of being in the ‘electronic world,’ eBay has also instituted ‘system lock-in’ (cf. Hax and Wilde, 1999) by tying its £500 Payment Protection scheme to using PayPal – trying to also lock-in domestic money flows to the PayPal network. PayPal use and an increasing ‘PayPal culture’ has also highlighted the inadequacies of domestic banking for customers in terms of bank opening hours and the effort of paying in cheques vis-à-vis the click of a button.

In terms of the distribution of goods, sending post globally because of eBay has also revealed problems with insurance, particularly between the US and UK, and third party insurers have come into existence to offset these risks. But eBay’s main contribution has been the cherry picking of national carriers’ distribution services through the perspective of a chain of accountability back to the seller. eBayer sellers increasingly require traceability, and quick, full refunds to the full value of eBay items. Traceable services are increasingly popular because of the seller’s liabilities through the eBay dispute system and the possibility of credit card charge backs for items which have not been sent by a form of recorded delivery. Sellers may have to give back money to buyers before they have received a claim from the postal service. Couriers may be preferable for high value items which need traceability. The range of items for sale on eBay also highlights the limitations of national postal systems. The Royal Mail’s maximum weight limit decrease of 20 kg from 30 kg has also pushed that weight of eBay item to private couriers. However, some needs are not currently catered for, such as a fragile service, and both Royal Mail and couriers are seen as likely to damage fragile or large items. Where no service exists to cater for eBayers’ needs, this often stops them bidding for such items and affects saleability. While there is system lock-in (cf. Hax and Wilde, 1999) between PayPal and eBay, fuelled by an integration of the two after eBay’s buy out of PayPal and the £500 Buyer Protection scheme, there is yet no ‘system lock in’ for delivery networks. Royal Mail’s quasi-monopoly position in some niches of the mail market mean that it has benefited disproportionately from the growth of eBay in the UK. It also has an online postal calculator which helps eBay sellers better integrate the virtual and the ‘real’ by helping them estimate the postal costs of sending an item through the post, whereas private couriers often have an opaque pricing structure. Royal Mail has been considering its future directions in terms of volumetric pricing, offering more packaging and a fragile service. One of the key future directions it is also considering is whether it should try to ‘lock in’ more eBay customers – whether that be via a discount for eBay sellers,

7 Although eBay can also be used to buy and sell services, this report only examines the exchange of goods, since it is interested in both the distribution of goods and the distribution of money.





more integration with eBay and its checkout system/ automated collection and delivery, or the alteration of existing services to meet eBay buyer and sellers’ unmet needs.

Appendix

Figure 1 – Interrelationships between eBay sellers and Royal Mail, buyer’s fraud





Figure 2 – Interrelationships between eBay sellers and Royal Mail, missing items





6 References

Birch, A.; Gerbert, P. and Schneider, D. (2000) The Age of E-Tail – conquering the new world of electronic shopping (Capstone Publishing, Oxford).

Boyd, J. (2001) ‘Virtual orality: how eBay controls auctions without an auctioneer’s voice,’ American Speech, 76(3), 286-300.

Bunnel, D. and Luecke, R. (2000) The eBay Phenomenon: Business Secrets Behind the World’s Hottest Internet Company (John Wiley and Sons).

Cairncross, F. (1997) The Death of Distance – How the Communications Revolution Will Change Our Lives (Orion Business Books, London).

Channel 4 (2004) ‘Third class post – Joint statement by Channel 4 Television Corporation, Hardcash Productions and Royal Mail,’ Channel 4 News Archive, November 5th 2004. Available from:

http://www.channel4.com/news/2004/04/week_4/19_dispatches_post.html [accessed 21/11/05].

Gonzàlez, A. G. (2003) ‘PayPal and eBay: The legal implications of the C2C electronic commerce model,’ 18th BILETA Conference: Controlling Information in the Online Environment, April 2003, QMW, London. Available from:

http://www.bileta.ac.uk/Document%20Library/1/PayPal%20and%20eBay%20-%20The%20Legal%20Implications%20of%20the%20C2C%20Elctronic%20Commerce%20Model.pdf

[accessed 21/11/05].

Hanley, P.; Ozawa, N.; Schmid G.; and Wang, H. (1996) The Coming Transformation of Mail: Competition, Technology and the New Consumer (Institute for the Future, California).

Hax, A.C. and Wilde, D.L. (1999) "The delta model: adaptive management for a changing world", Sloan Management Review, 40, 2, 11-28.

Henry, J.; Goswami, N. and Young-Abraham, A. (2005) ‘How the “eBay effect” is keeping the Post Office in business,’

Available from: http://news.telegraph.co.uk/news/main.jhtml?xml=/news/2005/10/30/nebay30.xml [accessed 21/11/05].

Herschlag, M. and Zwick, R. (2002) `Internet Auctions – Popular and Professional Literature Review’,

Quarterly Journal of Electronic Commerce, 1(2), 161-186.

Jackson, E. M. (2004) The PayPal Wars (World Ahead Publishing, Inc., Los Angeles, California).

Li, F.; Whalley, J. and Williams, H. (2001) 'Between physical and electronic spaces: the implications for organisations in the networked economy', Environment and Planning A, 33, 699-716.

Libbenga, J. (2003) ‘Germans love eBay,’ The Register [online]

Available from: http://www.theregister.co.uk/2003/11/07/germans_love_ebay [accessed 21/11/05].

Murphy, A. (2003a) ‘(Re)solving space and time: fulfilment issues in online grocery retailing’,

Environment and Planning A, 35(7), 1173-1200.

Murphy, A. (2003b) ‘The web, the grocer and the city: on the (in)visibility of grounded virtual

retail capital’, The University of Birmingham School of Geography, Earth and

Environmental Sciences - Working Papers in Services, Space, Society.

National Statistics Online (2005) ‘Internet Access: 12.9 million households on-line’,

Available from: http://www.statistics.gov.uk/cci/nugget.asp?id=8 [accessed 30/11/2005]





Nesbary, D. (2000) 'The taxation of Internet commerce’, Social Science Computer Review 18(1), 17-39.

Organisation for Economic Co-operation and Development (2005) ‘OECD Broadband Statistics, June 2005’,

Available from: http://www.oecd.org/document/16/0,2340,en_2649_34225_35526608_1_1_1_1,00.html#data2004

[accessed 30/11/2005].

Payments News (2005) ‘PayPal Financial Results,’ July 20, 2005.

Available from: http://www.paymentsnews.com/2005/07/paypal_results.html [accessed 25/11/05].

Pasquini, A.; Velardo, M. and Vicario, L. (2002) e-Living D7.2: Environmental Impact of ISTs: A Cross-sectional analysis (e-Living: Life in a Digital Europe, an EU Fifth Framework Project [IST-2000-25409]). Available from: http://www.eurescom.de/e-living/index.htm [accessed 21/11/05].

Pinker, E. J.; Seidmann, A. And Vakrat, Y. (2003) ‘Managing Online Auctions: Currenr Business and Research Issues’, Management Science, 49(11), 1457-1484.

Quah, D. T. (1999) ‘The weightless economy in growth’, The Business Economist, 30(1), 40-53.

Sinclair, J. T. and Ubels, R. (2004) eBay Global - The Smart Way - Buying and Selling Internationally on the

World's #1 Auction Site (AMACOM, New York).

Smith, C. W. (1989) Auctions: The social construction of value (University of California Press,

Berkeley).

This is Money (2005) ‘eBay’s making us richer,’ This is Money, 15 August 2005

Available from:

http://www.thisismoney.co.uk/money-savers/article.html?in_article_id=402995&in_page_id=5

[accessed 5/12/05]

World Bank and Universal Postal Union (2001) The Postal Industry in an Internet Age - Case Studies of Postal Reform (World Bank and Universal Postal Union).

Documents

The implications of eBay for real networks': the distribution