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Ebay bans digital product sales

Posted by Michael Bloch in ecommerce (Sunday March 30, 2008 )

If you’re thinking of cranking out an information product or have software you want to sell on eBay via digital download, the news isn’t good; but there may be a legitimate way around it

Due to the low costs involved with creating and selling digital products and according to eBay, problems relating to feedback manipulation; effective March 31 all products delivered via digital means cannot be put up for auction or listed as “buy it now” items. The only option is to use the Classified Ads format which does not allow for payments via eBay – it’s more of a lead generation tool than an ecommerce platform.

The only way (eBay-acceptable) way around this is to whack your products onto CD-ROM or DVD and physically ship it to the customer.

This announcement is a double-edged sword. On the one hand, it adds cost and time to the merchant and certainly doesn’t satisfy the “I-want-it-now” scenario that many buyers have grown accustomed to and will likely decrease sales.

On the other hand, digital products listings on eBay have by and large been.. well.. crappy items; so this may discourage some of that activity allowing the more ethical software and digital goods merchants with genuine products a bit more exposure.

I’m thinking another way around it is to offer digital delivery *and* also ship out the CD as this would probably satisfy eBay’s requirements while also addressing the immediacy problem; but that’s just a guess – you should check with eBay on that one. If you have inquired and had a response, I’d love to hear what the official view on this strategy is.

You can read the eBay announcement here and also view an interview with Brian Burke, eBay’s Director in Trust & Safety, on the topic here.

Speaking of digital products – if you’re looking for a cheap, easy to use, but effective licensing/security system for digital goods, check out Product Padlock.


4 comments for Ebay bans digital product sales
  1. Dear Michael,

    I have been thinking my way around this problem and cam up with something fairly similar: namely, once payment has been processed, to put a link to a download in an email confirming shipment of the physical medium.

    Theoretically, there is still the potential that once the CD/DVD arrives, the buyer complains, demands their money back and returns the CD/DVD whilst keeping the original download (or even just a copy of the original media.) This could possibly be circumvented by having an expiry date on the software which would require the later application of a license code, once the date of possible complaint to eBay had passed.

    This almost seems, however, to raise more issues than it resolves.

    Comment by Ian Springham — April 3, 2008 @ 6:26 am

  2. As far as burning the software to a CD, that is not the answer. Ebay says that it has to be your own work and you own the copyright. This makes it much better for those of us that produce our own sites, scripts and software.

    Comment by john haskins — April 28, 2008 @ 5:36 am

  3. Unfortunately I was someone effected by this policy. I have over 8 years with eBay, spotless record 100% feedback. My customers loved what I provided. I had my store suspended no notice after attempting to follow their new guidelines. I was selling a CD with my info on it. My mistake was also sending a emailed download link so they could access the information while they waited for the CD to arrive!!!! So much for communicating with customers. eBay also makes it difficult to plead my case in that they don’t speak personally to their sellers, just via email which “will be responded to within 48-72 hours due to high volume” Imagine that!

    Comment by Mel — May 11, 2008 @ 8:45 am

  4. I am very sorry that Ebay has put a stop to selling digital software & scripts. I purchased a very good software program for selling digital goods from a website that also delivered e-goods to ebay customers. Although the software was very good it lacked a few features that I wanted and it enabled me to work with the software.
    Ebay was a fabulous outlet for my small scripts and used to bring in most of my visitors.
    The software program developers are hardly going to rejoice at Ebays decision to prevent digital goods, and on a personal note my script additions to the software were very small and I only sold them for a few $’s anyway, but at least there was an outlet for my scripts, it gave me a chance to explore new idea’s and sometimes see them implemented!

    Comment by Saddened — May 30, 2008 @ 9:56 am

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