How does this work?!

walrus

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Second, if I offer to sell someone else your guitar, take their money and then give it back to the buyer when I cannot get the guitar from you then that is not fraud or a scam. At worst it is disingenuous because as the broker I am expecting you to assume I have the guitar and not go searching and buy it directly.

I'm with wileypickett on this - curious how this has any value to anyone, and curious why eBay finds it acceptable given their other policies. But I'm not curious as to whether it's fraud. It is.

Fraud is "wrongful or criminal deception intended to result in financial or personal gain". Not "criminal" in this example, but certainly a "wrongful deception". The seller doesn't have the guitar!

Interestingly, here are some synonyms for "fraud": cheating, swindling, trickery, crookedness, con, deceit, deception, double-dealing, duplicity, hoax, and my favorites, "skullduggery", "flimflam", and "monkey business". All of these fit this situation.

A person who is a fraud is "person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities".

This seller doesn't own what he is selling, and is implying by the ad that he does - forget the "fine print", the ad is up under "Items for Sale", the fine print is to cover the seller in a court of law. They know what they are doing is fraudulent and they know eBay will back them if they have the "fine print" in the ad. Shame on eBay.

Caveat - I have taught a class on "Ethics in Business" (I know, perhaps an oxymoron) for years. This is a perfect case of fraud that has been legally "lowered" to simply being unethical by the seller (with eBay's consent) putting in the ad that "well you know, we may not actually have this item but we might be able to get one...".

But wileypickett's overall question still remains, and I'm not sure it can be fully answered. How the heck are they making any money? eBay no longer charges to put an ad up, so the only cost is the effort to produce the ad. They must occasionally successfully score the item to actually sell it, right? I can't see an income stream otherwise.

walrus
 

SFIV1967

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How does the seller benefit from running these kinds of ads, ones they spend money to run, and more money to have those ads double featured as "sponsored" items.
"The seller" is not just one seller but many "sellers" in Japan. And "seller" in that case means "broker". Some spend more money on advertising than others. They do this in large scale and in large numbers, we have seen the same guitars advertised by many many different brokers on ebay. Always the source is a local Japanese add somewhere in Japan. So an item anybody outside Japan cannot obtain unless you buy it from one of the brokers as they are the ones who ship it abroad.

But I'm not asking in theory. Unless I sell this specific guitar to one of the two sellers now offering it for sale, how can they possibly obtain it? They can't.
You missed the point. Those brokers did nothing wrong, they only did as always, they copied the pictures from a local add somewhere in Japan! I showed you the Yahoo add as example. So the brokers had no idea the item is not available in Japan and frankly why should they care? Just one more add they put up on ebay. No loss to them. If a foreign buyer wants to buy they try getting it and will see that they get nothing. No problem. Unless they would fall for the scammer but usually they do local pickups only, they have networks in Japan, they would not send money and wait for a shipment, they are not stupid.

How the heck are they making any money? eBay no longer charges to put an ad up, so the only cost is the effort to produce the ad. They must occasionally successfully score the item to actually sell it, right?
Sure they obtain the items from time to time. It's big business. They do this on large scale. Ask the LTG members who bought guitars that way from Japan. They were happy, hence most of those Japanese brokers have very good ratings on ebay.

Thanks for doing some heavy lifting -- I wasn't able to find the original ad, I assume because the guitar didn't sell, and I was looking under sold items?
Ha, ha, yes I know, it's difficult finding those things. You won't believe me, but I found your guitar still advertised on a Russian shopping site, all in Russian language there! I found this site via a picture search of the guitar. And that Russian site was pointing to the original ebay add from July 2021 in Canton, MA and that way I had simply to add the ebay item number from the Russian site into ebay and had the original add. That Russian shopping site is no fraud either, they import ebay articles for Russian buyers from the US and do all customs work and shipping. So a Russian person does not need to buy at ebay USA but can buy local in Russia without any hazzle.

Ralf
 

walrus

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Thanks, Ralf, I can see how the sheer quantity of their "brokerage" activities could turn a profit.

Those brokers did nothing wrong...

We can agree to disagree whether this is "wrong" or not. I'm separating unethical/fraudulent behavior from legal issues, as in my post above. If we disregard the concept of "fraud" and just consider ethics, whether it's unethical or not is up to each individual.

walrus
 

SFIV1967

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whether it's unethical or not is up to each individual.
Agreed, but they offer a "service" to buyers from outside Japan who would most probably never have access to the goods (guitars) offered. Yes it is very questionable if offereing something you don't have yet is ethical, but ebay seems to just not care about this and the amount of adds probably also overwhelms ebay in checking if they really own the goods offered. Since they actually sell from time to time it's probably not even noticed if the same item is offered multiple times at various prices.

Ralf
 

davismanLV

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I think the term broker, or maybe even agent for a sale is applicable. An agent represents, but does not own. But they will own at one (miniscule) point in time before the final ownership. I'm kind of out of my league here, but this is my take.
 

walrus

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Agreed. But a "reputable" broker normally wouldn't try to sell guitars based on random Craigslist ads like wileypickett's guitar! At least I don't think so!

walrus
 

walrus

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We need to contact one of these "brokers", ask them to join LTG, and then tell us what's really going on behind the scenes! :)

walrus
 

fronobulax

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We can agree to disagree whether this is "wrong" or not. I'm separating unethical/fraudulent behavior from legal issues, as in my post above. If we disregard the concept of "fraud" and just consider ethics, whether it's unethical or not is up to each individual.

There are numerous examples of transactions where the seller does not have the item in hand when they offer it for sale. What they do have is a reasonable expectation of obtaining the item in the event it is sold. If an item is purchased and they are not able to deliver the item and they refund the payment then I see no ethical problem.

So what is the ethical difference between a broker offering a guitar that is not currently in hand and a Guild dealer taking an order for a guitar that has not been manufactured yet? Imagine that the factory was closed after the order so even if the order was accepted in good faith the guitar cannot be delivered. How do the broker's and dealer's ethical situation differ?

If, as I suspect, the answer depends upon the relationship between the broker and the owner at the time of the initial listing then we can agree to disagree. As a potential customer of a broker listing on ebay I have no knowledge of the relationship between the broker and the owner (or even know that they are not the same) and would rather not believe the broker is unethical based upon my speculation.

Anecdotally I have known individuals who list an item on CL and have an agreement with a broker to sell it on ebay. The understanding is that the first sale is binding. If it sells on CL, the ebay ad is pulled. If it sells on ebay the CL ad is pulled and the sale is consummated on ebay. The owner does this because they want a quick sale or a local sale and are willing to accept a lower price if someone else does more extensive advertising and handles shipping.

The concept "just because something is legal does not mean it is right" is noted :)
 

walrus

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The concept "just because something is legal does not mean it is right" is noted :)

Yes, we agree on that!

For me, a Guild dealer waiting for a guitar to be manufactured (for example) is very different than randomly using a Craigslist photo and offering to sell that item.

But seriously, much of this discussion is based on everyone's personal value system, so there's no "right answer". It is, however, an interesting thread!

walrus
 

fronobulax

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Yes, we agree on that!

For me, a Guild dealer waiting for a guitar to be manufactured (for example) is very different than randomly using a Craigslist photo and offering to sell that item.

But seriously, much of this discussion is based on everyone's personal value system, so there's no "right answer". It is, however, an interesting thread!

walrus

The business model as I understand it and supported by the keyword story is that the broker is not randomly selecting a CL or similar listing to offer to sell but is deliberately choosing an item that the broker believes they can sell at a higher price on ebay.
 

wileypickett

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There are plenty of brokers who sell as middle-persons -- the whole Amazon model was originally based on not having actual brick and mortar warehouses, but acting as a funnel through which sellers (of mostly used items at the time) could reach potential customers. You knew Amazon didn't have whatever it was you were buying, but were acting as conduit to a sale. You knew and accepted those terms going in.

What we're discussing is different, it seems to me.

All these sellers would have to do is state their terms clearly: "I don't have this item in stock, but will try to get it for you, and I'll refund your money if I can't." That would feel more ethical to me. Both parties would understand the nature of the sale upfront and could agree to it going in.

But these particular sellers are not disclosing the fact that they don't have the item they're advertising. The reason for that seems obvious: if potential buyers knew this, mightn't they might think twice before hitting that "Buy It Now" button?

That, to me, feels like lying by omission.
 
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walrus

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There are plenty of brokers who sell as middle-persons -- the whole Amazon model was originally based on not having actual brick and mortar warehouses, but acting as a funnel through which sellers (of mostly used items at the time) could reach potential customers. You knew Amazon didn't have whatever it was you were buying, but were acting as conduit to a sale. You knew and accepted those terms going in.

What we're discussing is different, it seems to me.

All these sellers would have to do is state their terms clearly: "I don't have this item in stock, but will try to get it for you, and I'll refund your money if I can't." That would feel more ethical to me. Both parties understand the nature of the relationship upfront and agree to it.

But sellers are not disclosing the fact that they don't have the item they're advertising. The reason for that seems obvious -- if potential buyers knew this, they might think twice before hitting that "Buy It Now" button.

That, to me, feels like lying by omission.

Agreed.

walrus
 

SFIV1967

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Just to update a bit, there was a huge discussion on another forum about the same topic:

Ralf
 

fronobulax

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If you don't understand the broker or drop shipper or proxy business model then that is one thing. If you do understand and don't "approve" then that is another conversation entirely. The former conversation is generally fact based while the latter is pretty much ethics based which tolerates a wider diversity of opinion.

Someday I'll end up in Massachusetts and sit down over coffee and beer and try and understand why various things that I think are ethically equivalent are not :)
 

HeyMikey

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I just don’t think it’s right for someone to take possession of and hold my money when they don’t own or have an agreement to own the right to sell the guitar. That is not operating in good faith.

If they state clearly in their ad that they do not own the guitar but will attempt to acquire it on my behalf and explain the risk then I’d be perfectly fine. However, they don’t, and rather make it appear as if they do own it.
 
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SFIV1967

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Sure, we can discuss this endless (as they also did on the LP Forum) but ebay just doesn't care and the Japanese middle man don't care either as this is their business model and it obviously works well enough looking at the high number of them working in that business. So we won't change it whatever we think.

Ralf
 

walrus

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If you don't understand the broker or drop shipper or proxy business model then that is one thing. If you do understand and don't "approve" then that is another conversation entirely. The former conversation is generally fact based while the latter is pretty much ethics based which tolerates a wider diversity of opinion.

Someday I'll end up in Massachusetts and sit down over coffee and beer and try and understand why various things that I think are ethically equivalent are not :)

Totally agree we veered into other "opinion" territory from the OP. But that's what we do - veer!

And if we get together, frono, there has to be something else we can discuss rather than this... :)

It's encouraging (or is it embarrassing?) to see the LP Forum members can't agree either!

walrus
 
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