States Planning to Require License to Sell on EBay

RobMowery writes "CNN reports that North Dakota and other state governments are trying to pass laws to require people who are selling for others on Ebay to purchase an auctioneer license, attend classes (for a fee) and become bonded." From the article: "North Dakota's Public Service Commission is exploring whether people like Nichols, who runs a small consignment store in Crosby, must obtain auctioneer licenses before they can legally use eBay to sell merchandise for others. Regulators in other states are also eyeing similar restrictions or preconditions, moves prompted by the growing popularity of online auctions. To get a North Dakota auctioneer's license, applicants must pay a $35 fee, obtain a $5,000 surety bond and undergo training at one of eight approved auction schools, where the curriculum includes talking really fast ... Commissioner Kevin Cramer said he does not believe the law applies to people who sell their own goods over eBay, but it could cover those who sell property consigned by others for a fee."

Comments

Key word is Consignment

[Buzz_Litebeer]

I think this is a good idea. These individuals are running an auctioning business by taking peoples items for consignment. As long as it does not spread to those just selling their own private goods, this seems like an incredibly good idea.

It provides protections to the people who give their goods over for sale, as well as provides a link to the individual that is selling, and a person can prove that they are a bonded seller as well.

Obviously the classes would have to change slightly for internet retailers, mentioning talking fast is sort of moot if this were to go ahead.

Re:Key word is Consignment

[mopslik]

Obviously the classes would have to change slightly for internet retailers, mentioning talking fast is sort of moot if this were to go ahead.

Bah, piece of cake.

"Thankyouforpurchasingyouritemsatourstore, wereallyREALLYappreciateyourbusiness..."

Thank you, Mavis Beacon!

Re:Key word is Consignment

[AviLazar]

While I agree it is good for those who are doing this as a business (consignments) - it WILL move on to other things. Also, it will be hard to regulate.

It will also provide a new source of tax revenue, which is the main reason the gov't wants it.

It will cause some issues:

That $35 fee does not pay for the classes, which can be hundreds. And that surety bond - unless you are part of a company, you may have to front that money...that is a barrier to entry and not a lot of people can afford it. THe great thing about consignment on eBay is that you could get in for free.

Re:Key word is Consignment

[Tackhead]

> While I agree it is good for those who are doing this as a business (consignments) - it WILL move on to other things. Also, it will be hard to regulate.

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens' What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

- Ayn Rand, Atlas Shrugged

> It will also provide a new source of tax revenue, which is the main reason the gov't wants it.

Close, but not quite.

> That $35 fee does not pay for the classes, which can be hundreds. And that surety bond - unless you are part of a company, you may have to front that money...that is a barrier to entry and not a lot of people can afford it. THe great thing about consignment on eBay is that you could get in for free.

Now you've got it. The "great thing" is only "great" to people like the buyers of products on eBay (who want more goods to purchase from a wider array of sellers) and to people who want to get into the business without having to pony up a few grand of protection money (oops, "to take classes on how to talk fast!") to line the pockets of people who are already well established.

In a free market, anyone can enter. If you give enough money to your politicians, however, you can have him erect artificial barriers to your competition, turning a formerly free market into a cartel, or guild. A capitalist doesn't fear competition -- but sadly, owning a small business doesn't turn you into a capitalist any more than going into a garage makes you a car.

Re:Key word is Consignment

[RexRhino]

How does it provide protections to people who give their goods over for sale? Please explain it to me.

Just because the state charges a $35 dollar fee and requires some classes (from the same people who are lobbying for the class requirements), doesn't mean that there is any infrastructure in place to protect consumers. All it means is that people have paid $35 and took a class.

And why are states so concerned about "protecting" people who gives things on consignment for auction (which there isn't a whole lot of), but refuse to get involved when ebay sellers are involved in all out scamming? It seems to me if this was about protecting people, they would go after the biggest and most desctructive criminals first. This just seems like a way to charge a new tax, and to protect the market of established auctioneers.

Re:Key word is Consignment

[rolfwind]

Are you talking out of your ass?

Especially if this is a state by state law, it will become a patchwork of licenses here and there, unenforceable and the seller's will just relocate their "location" on ebay to a friendly state. Like a scammers do with Utah or Florida. Or Washington D.C.:-)

I actually did selling on ebay, as well as buying where I got burned - so I looked into it.

Most of the fraud done on ebay are by low volume sellers who build up their feedback to somewhere in the double-digits and then pull either a high-priced scam, or probably more likely a dump a bunch of lots (medium priced, say computers for a low price) and never deliver.

Common sense is the best defense in this case, buying from someone that has an internet presence besides ebay (like a website) and that has a high feedback (over 200) that won't likely jeopardize it.

If this starts passing left and right, it will kill small business, or they'll move from ebay (I hate ebay, I don't care if they lose money) into their own website and just sell the stuff for a fixed price. In fact, they can do that now on ebay too.

Nowadays, when government usually do something (and other local governments want to be fast on the heels to follow), it's not for the good of the people, it's about control and increasing the revenue stream. I wonder if this is the first step toward greater taxes applied to internet selling, since they'll get the consignors listed on paper.....

Re:Key word is Consignment

[JesseL]

Is there currently a problem with people who are consigning goods on ebay? If there is, is this any better than prosecuting the problem individuals? Just what real protection does it provide?

The government should stay out of everything as much as it possibly can. Almost every time the government gets involved in something unnecessarily, it is simply because someone sees an opportunity for more graft, the rest of the time it's because they are acting like overprotective parents.

new curriculum needed, then

[ChristTrekker]

Those schools should be required to add "online auctions" as a class.

Not saying that I agree with this, but if you're going to force the online guys to learn the auctioneer rap, the auctioneers better learn how to navigate eBay and similar systems. If the pretense for passing this law is being fair and equitable, then it had better be.

We Vote For these People?

[nate nice]

It's amazing that we, the people, actually vote for people that are willing to do this. Note to politicians: Learn how to balance a budget like 99% of the country has to! Stop spending on crap and realize you cannot keep quietly taxing us. This is living free?

Re:We Vote For these People?

[bjtuna]

ballance the budget

the highering of government employees

Mr. President, is that you?

Re:We Vote For these People?

[d'fim]

99% of the country? I call bullshit. I believe that far less than 50% of American households make even the slightest attempt at working out a budget. Furthermore, the debt numbers here in America prove that Americans are most likely to try to solve their "budget problems" by overextending their credit. We then vote in polititians who do the same. An "amazing" coincidence, huh?

Ok, so anyone who goes THROUGH an auctioneer too?

[Puls4r]

Ok, someone who puts something on ebay ISN'T running the auction. Ebay is. The person placing the good on ebay sets the high price and reserve - but how is that any different than if you hire an auctioneer?

So does everyone who wants to hire an auctioneer now need a license to auction? How non-sensical is that?

This is, quite literally, a stab at taxing the internet.

Interstate Commerce

[MBCook]

Wouldn't this law be regulating interstate commerce and thus unconstitutional? The only way I could see this as valid would be if they required a license for one person from that state (ND, for example) to sell to another person in that state (intrastate commerce). I can't imagine that states can regulate international commerce either so that same person would be allowed to sell to Canada, etc al.

Either way, I see it as a stupid idea. This is two things: a blatant attempt at getting more revenue for the state (though licensing fees), and (pure guess here) an attempt by auctioneers (probably a union of some sort) to get more money because their trade is threatened (in some ways) by eBay.

Why eBay? Why not require it for garage sales? Why not go after silent auctions that all sorts of places run (like many school districts and churches to raise funds). Usually there is a little good a law might do, or you can at least see some good intent behind it. This would do anything but prevent everyone in ND from selling things on eBay.

If you want to protect people from fraud, go after the NDers that are actually perpetrating fraud on others through eBay. Come up with a way to become a "registered eBayer" in the state so people can guaranty that you can be held accountable if you rip people off (but make it voluntary, and free or nearly so ($5) with no classes our anything like that).

Re:Interstate Commerce

[Pedrito]

Wouldn't this law be regulating interstate commerce and thus unconstitutional?

No, it's not regulating interstate commerce. The law is regulating in-state businesses. Keep in mind, this is for people who operate business selling OTHER PEOPLE'S things on consignment. This isn't for people operating a business selling stuff they've bought from wholesalers on e-bay or even individuals selling their stuff on e-bay.

In fact, it's not a particularly onerous thing to ask. Having recently had to get insured to operate my own business as a consultant (a requirement of the company I work for). Getting bonded and licensed isn't very costly. And in the end, the idea is to protect the consumer which isn't a bad thing.

Read the damn article

[mOoZik]

This only pertains to people who sell other people's goods online. The headline is misleading.

Re:Ok, so anyone who goes THROUGH an auctioneer to

[ottffssent]

What's particularly irksome is that this represents triple-taxing of the transaction. eBay consignment shops need a POP because people are more comfortable with that, and shipping an unsold item to sell it and then ship it again is just too expensive. So the business is paying taxes in the state in which it is incorporated. And possibly in all states in which its shops operate (I'm not familiar with the tax situation there). And certainly the individuals who eventually receive the shops' profits are taxed on income. The double-taxation of corporate income is reasonable because the corporate tax rate is low and incorporation provides concrete advantages which it is reasonable to pay for. I really don't see how this third layer of taxation is anything but an attempt by the states to suck a little more money out of the population without providing anything in exchange.

No, thanks

[jdavidb]

If I want to hire someone to put my stuff up on ebay, I'll decide whether I want them to have a license or certification or not. Please don't try to represent me by deciding this on my behalf.

Article 1, Section 8. Clause 3.

[lobsterGun]

The Congress shall have Power To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;*

* Not valid in all areas. Some restrictions may apply. Consult an attorney before attempting trade within the several states. If redness or inflamation appear discontinue interstate trade immediatly and seek legal assitance.

Yeah, licensing of car dealers...

[aquarian]

...has really killed off the sleazy car salesmen and predatory financing.

The reasons for the law in the first place...

[Vellmont]

Step back for just a minute and look at the reasons why it was decided long ago that you needs an auctioneer license. Obviously running an auction takes a bit of skill. Recognizing bid raises, knowing how much to raise the price, knowing how long to wait for the item to be sold, and the whole "talking fast" thing are special skills. The idea of regulating it is to protect the public from unskilled auctioneers who won't get a good price for an item.

Almost all of that crap is handled by Ebay itself. The person selling the item by proxy only has to set an initial price, describe the item, etc. These are all skills that don't normally require regulation in any other context. Why (other than trying to raise more tax revenue) should the states try to regulate trading assistance?

Damn all rent-seekers to hell

[ccmay]

This is just a case of politically-connected buggy whip makers getting their pals in government to outlaw those newfangled horseless carriages. Economists have a word for it: "rent-seeking".

All failures of the capitalist system are caused by the involvement of too much government. We need to hack government at all levels into tiny, powerless bits.

-ccm