eBay Silences Sellers Who Apply to Its Refurb Program - EcommerceBytes

Summary

eBay has made no secret of the fact it has been tightening the rules around selling refurbished goods on its platform. But it has not publicized the fact that sellers who wish to apply to its fairly recent program must sign a non-disclosure agreement that binds them to secrecy over anything eBay tells them for 3 years from the date of signing the contract, according to John Bumstead of RDKL Inc (pronounced "roadkill incorporated").

eBay has made no secret of the fact it has been tightening the rules around selling refurbished goods on its platform. But it has not publicized the fact that sellers who wish to apply to its fairly recent program must sign a non-disclosure agreement that binds them to secrecy over anything eBay tells them for 3 years from the date of signing the contract, according to John Bumstead of RDKL Inc (pronounced "roadkill incorporated").

Beginning in October of 2020 , eBay restricted sellers to listing refurbished goods in one of two ways: "Seller refurbished" and "Certified refurbished," and severely restricting who was allowed to use the certified condition.

any* refurbished goods in the Cell Phones & Smartphones category. A year later , it barred sellers from listing ** refurbished goods in the Cell Phones & Smartphones category.

Today, the eBay policy page shows there is no "seller refurbished" option in cell phones, laptop & desktop computers, smartphone and tablet categories - sellers must be vetted by eBay or else sell their refurbs as "used," a major disadvantage.

When Bumstead was forced to either change his listings for refurbished goods to "used" condition or else stop selling them on eBay entirely, he decided to apply for the program. He would still not qualify to list his items as *certified* refurbished, since that requires manufacturer approval, but in the categories he sells, there were options to sell refurbished in three other conditions: Excellent, Very Good, and Good - explained on this page of the eBay website

After receiving his application, eBay reached out and said he'd have to sign a "Mutual Non Disclosure Agreement" (MNDA). This would prevent him from talking about the program for 3 years - even if eBay did not ultimately accept him into the program.

Bumstead explained how he came to his decision about what to do in a YouTube video, "eBay Silences Refurbishers With Mandatory Non-Disclosure Agreement."

He told EcommerceBytes he sees the requirement to sign an "MNDA" (Mutual Non Disclosure Agreement) to be much more than a single instance of silencing sellers - he fears it's the beginning of "brand-gating" on eBay.

"I fear this means more changes for eBay because it mirrors what happened with the Apple/Amazon agreement years ago - Apple sellers were kicked off listings they had sold for years, and the "Renewed" program was founded, but would only authorize specific sellers who presumably had manufacturer approval and met absurdly high requirements.

"Since then Amazon has continued to partner with manufacturers and institute brand gating, essentially waging a war inside the Amazon ecosystem, pitting manufacturers and approved sellers against everyone else."

Bumstead said he believes eBay is trying to replicate Amazon's success and asked, "If eBay is open to the strategy of defining a new segment of manufacturers/approved sellers and pitting it against regular sellers, then why would they not also be open to FURTHERING that strategy, especially if it is lucrative?"

He said that with its MNDA mandate, "eBay could tighten the requirements further, or implement any given anticompetitive strategy, and sellers involved would remain legally muzzled and unable to voice concerns to the public."

This isn't the first time Bumstead has spoken out publicly about marketplace practices. He had been selling refurbished goods on Amazon when the marketplace sent him notice in 2018 that it would begin limiting sales of Apple products to "authorized resellers."

He broke the story to the media, and outlets including the LA Times ("How Apple and other manufacturers attach your right to repair their products") and Vice ("Amazon Is Kicking All Unauthorized Apple Refurbishers Off Amazon Marketplace") picked up the story, leading the FTC to launch an investigation - all of which he describes in the video he posted on YouTube. (A law professor quoted in the Vice article called Amazon's practice a "coordinated assault on the lawful resale of consumer devices.")

Bumstead said requiring sellers who aren't approved for the eBay Certified Refurb program to list their items as used rather than refurbished is "effectively degrading their listings and leading consumers to believe their products are "used", and probably something found in the back of a closet."

"Refurbishers can apply for "eBay Refurbished", but to do so they must abandon their right to free speech for 3 years, something I personally find unacceptable," he said.

Sellers have come to expect (though not accept) brand-gating on Amazon, but not so on eBay. Is this a strategy out of eBay CEO Jamie Iannone's Innovation Playbook? Let us know what you think and what it would take for you to sign a "mutual" NDA with an online marketplace.

eBay Silences Sellers Who Apply to Its Refurb Program - EcommerceBytes
Photo Credit: EcommerceBytes

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