An established eBay store can be an incredibly profitable venture. While eBay provides just about anyone with an immense money-making opportunity, the legal side of the eBay business model can be rather restrictive in many ways. In this article, we take a look at the restrictions associated with whether you can buy or sell an eBay store.
eBay User Agreement
As with all questions of this sort, the first place to investigate is the terms and conditions users must agree to when opening an account with the site. eBay gives its terms the title “eBay User Agreement” and addresses the question as follows:
In connection with using or accessing the Services you will not:
* transfer your eBay account (including Feedback) and user ID to another party without our consent;
In plain English, you are barred from buying or selling an eBay store without the consent of eBay. While such a limitation may seem unusually restrictive, it makes sense from a consumer perspective. People will only use eBay if they trust the feedback and reputation of sellers. If the company allows stores to be bought and sold without restriction, dubious parties would quickly start buying stores, collecting money on sales, and then fail to deliver the products.
Of course, eBay does allow parties to buy or sell a store if you first obtain approval from the company. eBay does not give permission on a whim. In fact, there are only two known instances where the company more or less automatically gives approval – transfers to heirs and transfers as part of a larger business asset sale.
Transfers to heirs refer to an estate planning situation. Brad Pitt opens an eBay store selling tufts of his chest hair. The store becomes a huge hit. Pitt dies in a tragic accident when his wife strangles him for kissing another woman in a film. Pitt’s will transfers all his assets to his kids. The eBay store would count as an asset, and eBay will consent to the transfer to the children.
The company is also known to allow transfers where the sale of the store is part of a larger transaction. Let’s assume Nike opens an eBay store. The store does millions in sales over two years. Apple then purchases the Nike company in total. eBay will allow the store to be transferred to Apple as part of the overall sale.
A quick word on documentation. The company is going to require a good bit of it in either of the above scenarios before approving the transfer. Wills, purchase agreements, and other supporting documents must be in place, and you must be ready to share the documentation with eBay.
eBay Stores Sold Without Consent
Ah, but aren’t eBay stores sold without consent all the time? You would certainly think so given what you read on various forums and blogs. Such transfers undoubtedly happen and really aren’t a surprise given the sheer number of eBay stores in existence. The problem is the purchasing party must always live with the threat of the company closing the account at some point in the future. Imagine spending two years building up a store you purchased from a seller only to have eBay close it down one day because the company did not consent to the transfer.
Would you have any legal options to challenge the termination?
You violated the eBay User Agreement – a classic material breach of contract.
When obtaining consent from eBay, keep in mind the consent is only legally binding if it is in writing. Getting consent from a customer service rep on the phone isn’t going to cut it. Instead, contact the legal department at:
Attn: Legal Department
583 W. eBay Way
Draper, Utah 84020
Matters can move a bit smoother if you use legal counsel such as myself.
Can you sell or buy an eBay store? Yes, if you obtain the consent of the company before doing so, and you fit within the accepted transfer categories. Anything less, and you are going to need to carefully negotiate with eBay.
Richard A. Chapo, Esq.