eBay banned the practice of "Amazon drop shipping," also known as a form of retail arbitrage, but the company failed to notify sellers, as we report today in EcommerceBytes Newsflash.





There are two forms of retail arbitrage practiced by eBay sellers, one where a seller acquires inventory from a retailer *before* listing the items for sale, the other where a seller lists items for sale and orders it from a retailer (often Amazon or Walmart) once they receive an order from a customer.





eBay has actively encouraged the former practice of product sourcing, even sending notices to sellers when retail stores in their areas are going out of business, such as this email sent in 2017 when it advised recipients to "Act Now: Inventory for Resale Near You - Find a variety of products at closeout prices." eBay even provided a map sellers could use to find the Kmart stores in their area.





As for the latter practice that eBay now prohibits, some argue it's irrelevant if an eBay seller uses Amazon "arbitrage" as long as the eBay buyer receives the item they ordered. But when the eBay buyer receives a gift receipt inside their package that indicates the seller used their Prime account to get free 2-day shipping (which is against Amazon's policy), some find it troubling - more so if the buyer had paid for shipping. This 18-page thread on the eBay discussion boards show how controversial the practice is among eBay users.





Is it okay to copy Amazon listings and post them to eBay and then use Amazon to fulfill the item to eBay buyers?





Would you be prepared if eBay asked you for receipts for items you listed?



