Ebay and its subsidiary Paypal have significant strengths and weaknesses that are important for anyone trading Chinese coins to understand.
- Worldwide market with many coins listed
- An large pool of active buyers and sellers of Chinese coins
- Fees that are lower than most major coin auction houses like Heritage and Bowers
- Paypal has excellent buyer and seller protections against fraud
- The seller rating system is not sophisticated and doesn't communicate a sellers character.
- Unknowledgeable sellers and expert sellers are difficult to distinguish
- It can be difficult to identify problem coins vai photos alone.
- Scammers occasionally sneak by ebay screening systems, especially in China, and collecting on buyer protections can be a hassle.
- Ebay and Paypal fees are still quite high compared to face-to-face deals.
Ebay is excellent for connecting buyers and sellers of chinese coins. Finding coins to buy and comparing prices has never been easier.
Paypal provides fraud protection for both buyers and sellers. If a seller's coin is not as advertised, or not delivered. a buyer can get refunded by Paypal if the seller is uncooperative. Similarly, if a buyer doesnt pay, files a fraudulent chargeback, or tries to use a stolen credit card, Paypal will cover the loss. This very valuable feature allows both parties to have the confidence to make high value transactions online.
Nevertheless, be cautions of sellers like these:
- A history of selling $2 trinkets and then suddenly start selling $2000 coins
- Gold coins selling under spot
- Photos that are "stock" or copied from another seller
- Photos that are not of the exact coin
- Blurry or dark photos
- Prices that are way out of line from other sellers or the price trend.
We also recommend buying Pandas certified by PCGS or NGC only, unless you are very knowledgeable and can identify fakes, or you are working with a seller who you trust to identify fakes for you. This will be very important when it comes time to sell.
Ebay and Paypal Fees
The seller pays all Ebay and Paypal fees.
Ebay Powerseller fees vary from 11% for items under $50 and drop to about 2.3% ($114) for a $5000 fixed price item. New ebay sellers will pay 20% more ($137 on $5000) until they are established.
Paypal fees depend on monthly volume. About 2.9% for low volume sellers scaling to 1.9% for those processing more than $100K per month. Typically, its about $110 on a $5000 coin.
Overall, the seller has to carry at least 5% in fees on a sales over $1000. In a business where margins are often 5% or less, this is a huge tax. As a business necessity, very often this fee is embedded in the listed price. It effectively inserts 5% into the bid/ask spread that buyer will have to pay.
Clearly, the value of Ebay and Paypal services are diminished once buyer and seller know and trust each other. Ebay and Paypal fail to consider trusted party transactions in their current pricing structure. As a result, many sales go "offline" in order for reasonable deals to be made.
How to save 5%
If you already have a good relationship with a seller, you may want to ask the seller if he has any coins he can sell "off-line" with a payment by check in exchange for a price discount of 4-5% off a comparable Ebay listed item. The seller will net the same amount and you save a few hundred dollars!
It is against Ebay policy to negotiate off-line sales through the Ebay message system, or to renegotiate items already purchased through Ebay. However Ebay does not have jurisdiction over sales conducted entirely outside of Ebay. So it is best to use the sellers direct email address or a phone call to make this kind of deal. Ask if he has any other coins like the one you saw on Ebay, but at a lower price.
Note that you will not have the Ebay/Paypal buyer protections, so be sure you trust the seller to deal fairly.
Until Ebay and Paypal adjust fees to better match the needs of the coin market, this is a good way to pay less for good coins from reputable sellers.
Many of the best coins will be listed at a fixed price, waiting for a discerning collector to come along. However, sometimes Pandas come up or sale on Ebay as an auction rather than at a fixed price. There are three reasons why a seller would use an aution.
- the market is hot or the coin is very rare and he hopes that his coin will be bid higher than previous sales
- he doesn't know what the coin is worth and lets the auction decide
- he doesn't care to maximize his selling price and just wants to liquidate quickly
Sometimes coins are underbid because the coin has problems or the seller is unkown to collectors. Sellers who "dont know" or "dont care" about pandas, may not be able or willing to properly disclose issues and stand behind their coins.
Auctions can be fun and sometimes good bargains can be found. However, a relationship with a good dealer can help you avoid costly mistakes.