posted on February 23, 2001 07:26:50 AM
I'm a mathematician by education and I love to "do the nmumbers."
Pursglove says 22 million items are up for bid each day. Let's assume that the number of 3 and 5 days auctions cancel the number of 10 day auctions. So, assuming an average auction duration of 7 days that means about 3.15 million items are listed daily on eBay.
Anyone want to take a wild guess as to average sell through rate? 50%? 25%? 10%? I'll go with 10% just to give eBay the benefit of the doubt in this little exercise.
10% of 3.15 million items means that 315,000 eBay transactions occur on average each day.
Pursglove says that 1 in 40,000 transactions result in a confirmed case of fraud? 315,000 divided by 40,000 gives 8 confirmed cases of fraud per day on eBay.
Sounds very impressive for eBay, doesn't it?
Now for the caveats.
I chose a sell through rate that was quite low. I suspect that the number of confirmed cases of fraud is higher than a mere 8 per day.
The fraud that is detected is for big ticket items for the most part and total to vast dollar amounts when added together. One huge case of fraud like this has a much larger impact than more numerous penny ante cases.
What is eBay's (Pursglove's) definition of a confirmed case of fraud? Someone is charged? Convicted? Required to make restitution to the victims? Does Pursglove include all of the auctions ended due to legitimate Vero complaints? Does Pursglove include auctions where the price was manipulated through bid shielding or shilling?
What about all of the cases of fraud that fly under eBay's fraud detecting radar? The radar that only seems to operate at altitudes well above the ionosphere?
And where is eBay's vaunted and not surprisingly carefully kept secret fraud detecting software and algorithms? And the fellow (an ex FBIer if memory serves) who was hired to keep watch on the inevitable nasty business that was sure to latch itself on to an economic powerhouse and commerce enabler like eBay?
There is a high, high level of trust on eBay," Pursglove said.
Actually, Kevin is right. People do trust each other for the most part. That they happen to encounter each other on eBay is entirely irrelevant. Note that Kevin did not say:
There is a high, high level of trust in eBay.
If just once or twice, Pursglove could report that eBay had initially detected the fraud and alerted authorities then perhaps he wouldn't have to parse his words so carefully. And hope that folks didn't notice that he was really saying absolutely nothing at all.
[ edited by codasaurus on Feb 23, 2001 07:34 AM ]
posted on February 23, 2001 08:01:32 AM
Even when Pursglove parses his words very carefully, the ummm shall we say dishonest nature of those words becomes apparent. A while back, in justification for the email policy and other changes, and in a press release directed at Wall St., Pursglove maintained that quote "the 'VAST MAJORITY' of fraud complaints [NOT CONFIRMED cases of fraud, whatever ebay might mean by that, but 'COMPLAINTS'] are from off-site transactions..." unquote,and that's why they're implementing those policies, to stop fraud. It had nothing whatsoever to do with greed. NOOOOOO. How very neat. When you want to use one criterion to describe fraud ("confirmed cases," whatever that means, put out there obviously without definition), you do so one way, but when you want to justify moves that serve one and only one purpose, to make eBay more $$$, you switch tacks and use "complaints." I wonder what the "1 in 40,000" figure would turn into if Pursglove used the same criteria in describing on-eBay transactions as he did in describing off-eBay transactions. This is dishonest spin-doctoring at its "finest."
posted on February 23, 2001 08:27:27 AM
All this numerical jibberish doesn't even take into account the bidders who defraud sellers by non-payment. Or the innumerable cases of selller misconduct that goes unreported. My educated guess is that maybe 5 percent of what takes place on eBay is not fully above board. It's still a great place to do business, but the risk factor stresses many buyers and sellers even for ordinary sales. I largely will not buy high ticket items online as a result.
