Chinese location abuse on eBay appears to be on the rise once again. In the past Chinese sellers claimed that their items were based in the UK but shipped from China. Then with the rise of cheap warehousing in the UK they started shipping their products in bulk to the UK to be fulfilled locally.
HMRC got involved as many of these sellers hadn’t registered for VAT. After a long campaign many Chinese sellers had to register for VAT and over the course of 2018 started to pay VAT. These sellers suddenly lost their 20% competitive edge and it would appear that a significant number have reverted to shipping from China. Some may have left without paying their bills to fulfilment houses and we’re already hearing of offers from these warehouses left with unpaid invoices and diminishing business.
This leaves the Chinese sellers with a problem, if their items aren’t in the UK then they are unlikely to attract sales and retain their eBay Best Match position and as they drop down search results sales tail off. Their solution is to revert to past behaviour and leave their Item Location as the UK and hence the rise in location abuse.
Today however, Chinese location abuse has a new tool in their eBay arsenal – eBay Promoted Listings. Having reverted to shipping from China they have at least a 20% advantage over UK sellers due to not paying VAT and so their budgets for promoted listings is higher. eBay have also in recent months assigned the first, fourth and fifth position in search results to Promoted Listings and so Chinese Location abuse doesn’t prevent Chinese sellers from buying the top search position.
How could eBay tackle Chinese location abuse?
There should be an easy way for eBay to tackle Chinese location abuse. In today’s world there is no such thing as a five day courier. Even economy services such as Hermes perform deliveries within three days and there isn’t a courier in the UK that takes five days to deliver an item.
eBay should do two things. Firstly remove the option for a five day courier and if a delivery estimate for an item purportedly located in the UK from a Chinese seller can’t be delivered within a short time span automatically assume it’s Chinese location abuse (because it almost certainly is) and demote their items to the last page of search results. Sellers registered in China will either be using a UK fulfilment house who will easily be able to deliver within a couple of days, or they are liars and are in reality shipping from China.
There are a few Chinese sellers who will ship in bulk to the UK and then have packages simply forwarded. This is still Chinese location abuse as the items aren’t in the UK at the time of purchase. It may save on individual shipping fees but it’s a scam and these sellers should also be paying VAT.
We should point out that here at Tamebay HQ we have no issue with Chinese sellers selling to the UK. It’s the way of the modern world and equally UK sellers can sell cross border into other countries. The issue we have is Chinese sellers who lie and cheat and mislead customers to unfairly compete with UK sellers.
The second thing that eBay could do is to control which sellers are allowed to buy their way to the top of search with eBay Promoted Listings. Today’s retail standards mean that consumers expect items to be delivered within a couple of days at most and they’ll simply stop buying on eBay if they are misled.
Impact of Chinese location abuse on UK sellers
Some sellers are telling us that their eBay Promoted Listings fees have sky rocketed in recent months as they are forced to compete with Chinese location abuse. They are in the bizarre position of their product being at the top of naturaly eBay Best Match search results but that is in reality second spot due to first spot being handed to eBay Promoted Listings. In order to keep a Chinese location abuse seller out of the top spot, UK sellers are having to bid higher for eBay Promoted Listings and then they’ll get first and second spot in search results. The downside is that consumers buy from the first search result which incurs the eBay Promoted Listings fee.
UK sellers who are having to outbid Chinese location abuse sellers are either losing their margins or refusing to play the game and losing sales. Either way their businesses are being severely impacted by loss of profits.
Location abuse has been an ongoing issue which we’ve been writing about on Tamebay for a decade. It’s now 2019 and time for eBay to clamp down and put a stop to it once and for all. Any account registered in China but claiming their stock is based in the UK should have a delivery time scale of five days or less. Buyers aren’t fooled as checking Chinese sellers’ feedback reveals the true item location so why are eBay so easily fooled by Chinese location abuse?