eBay silences sellers who apply for its refurbishment program

By Howard D. Herrera Last updated Jul 24, 2022

eBay has made no secret of the fact that it has tightened the rules around selling refurbished products on its platform. But he hasn’t made public the fact that sellers who want to apply for his fairly new program must sign a nondisclosure agreement that binds them to secrecy about anything eBay tells them for 3 years from the date. signing the contract, according to John Bumstead of RDKL inc. (pronounced “incorporated roadkill”).

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

One year laterhe banned sellers from registering *any* refurbished products from the Cellphones & Smartphones category.

Today the eBay Policy Page shows that there is no “refurbished seller” option in the categories of mobile phones, laptops and desktops, smartphones and tablets – sellers must be vetted by eBay or else sell their refurbished as “used”, a major inconvenience.

When Bumstead was forced to change his refurbished product listings to “used” condition or stop selling them on eBay altogether, he decided to apply for the program. He still wouldn’t qualify to list his items as *certified* refurbished, as that requires manufacturer approval, but in the categories he sells there were options to sell refurbished under three other conditions. : Excellent, Very Good and Good – explained on this page from the eBay site.

After receiving his application, eBay contacted him and said he should sign a “mutual non-disclosure agreement” (MNDA). This would keep him from talking about the program for 3 years – even though eBay ultimately didn’t accept him into the program.

Bumstead explained how he made his decision on what to do in a YouTube video, “eBay Silences Refurbishers With Mandatory Non-Disclosure Agreement.”

He told EcommerceBytes that he considers the requirement to sign a “MNDA” (Mutual Non Disclosure Agreement) to be more than just a case of sellers’ silence – he fears this is the start of the “brand- gating” on eBay.

“I fear this will mean more changes for eBay as it mirrors what happened with the Apple/Amazon deal years ago – Apple sellers were kicked out of listings they had been selling for years, and the “Renewed” program was founded, but would only allow specific sellers who presumably had manufacturer approval and met absurdly high requirements.

“Since then, Amazon has continued to partner with manufacturers and institute brand protections, essentially waging a war within the Amazon ecosystem, pitting manufacturers and authorized sellers against everyone else.”

Bumstead said he thought eBay was trying to replicate Amazon’s success and asked, “If eBay is open to the strategy of defining a new segment of approved manufacturers/sellers and pitting that against regular sellers, so why wouldn’t they also be open to EVEN MORE strategy, especially if it is lucrative?

He said that with its MNDA mandate, “eBay could further tighten requirements or implement a given anti-competitive strategy, and the sellers involved would remain legally muzzled and unable to voice their concerns to the public.”

This is not the first time that Bumstead has spoken publicly about market practices. He was selling refurbished products on Amazon when the marketplace sent him a notice in 2018 saying it would begin limiting sales of Apple products to “authorized resellers.”

He told the story to the media, and outlets like the LA Times (“How Apple and Other Manufacturers Are Attaching 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 – which he describes in the video he posted on YouTube. (A law professor quoted in the Vice article called Amazon’s practice a “coordinated attack on the legal 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 “effectively degrades their listings and leads consumers to believe their products are “used”, and probably something found in the back of a cupboard.”

“Refurbished can apply for ‘eBay Refurbished’ but to do so they have to give up their right to free speech for 3 years, which I personally find unacceptable,” he said.

Sellers have come to expect (but not accept) brand-gating on Amazon, but not on eBay. Is this a strategy from eBay CEO Jamie Iannone’s innovation playbook? Let us know what you think and what it would take to sign a “mutual” NDA with an online marketplace.