Today eBay decided to disallow all digital downloads from sale at month’s end. No more eBooks, PDF files, or software….basically anything that is a direct download after the sale.

I don’t often comments on things “in the news” that make the usual rounds on blogs because that’s not why you came here. But I just read something that I could not resist commenting on and I felt the need to post and let you know about it. I just read on Alan’s blog Affilliate Confession, his latest post is about eBay killing digital downloads. You can find the official eBay announcement here.

So – what’s all the hubub about? If you read that announcement, you’ll find that it indicates that eBay has a problem with people “manipulating the feedback system” by using thousands of low cost digital download product listings. Rather than address the problem – eBay has chosen to remove all digital download products as of March 31st, 2008 – and their only option is to pay $9.95 for a 30 day “classified ad” listing (which isn’t even an auction at all).

The audacity and ineptness of eBay with the announcement is unbelievable. I do not make a living selling eBooks, PDF files, software, or other digital downloads on eBay. For many people though, they have (over the years) built up an entire income or business by selling digital products on eBay. I had actually thought about creating and selling several eBooks on eBay in the future. The thing about eBooks, or PDF files, or even software is that it has a “perceived value”. Other than the fact that it’s digital and doesn’t take resources to duplicate (like a book, magazine, CD, or DVD) – the perception of it’s value lies in the eye of the beholder. I mean honestly, a country cookbook with “100 ways to Cook a Squirrel” is probably not for me, but I would buy a Jimi Hendrix biography any day. What makes eBooks or software any different? They aren’t valuable unless you can find a buyer who finds value in them.

eBay appararently doesn’t find much value in digital products because they “are often reproduced at little to no cost to the seller“. What!? Wow, if you used that analogy I guess the latest “Guitar Hero 3” video game isn’t of much value because it can be reproduced at little or no cost. Never mind the fact that it took millions of dollars and thousands of hours to create, and on the street will run you $60-80 to get a copy. What makes eBook sellers second class citizens? As Alan points out in his post where I first found out about this, he has a Vegan Meal Planner that he and his wife poured 70 hours into, and it’s very valuable to people looking for that information. Just because it’s not sold in Barnes and Noble or being wrapped in a fancy box by a major corporation with thousands of employees doesn’t mean that it’s not a product, or that Alan doesn’t have a valid company, or that Alan shouldn’t be able to sell his digital product on eBay.

I also think that eBay is overlooking one completely huge point here as well, and it’s the fact that they left one of the biggest loopholes wide open. It’s called a “box”. That’s right a “box”. What’s the difference between Alan’s Vegan Meal Planner eBook and the latest copy of Windows Vista? A box. That’s it – nothing more and nothing less. Remember, eBay only killed “digital downloads” or things that were downloadable only after purchase. If you have a great product you can still burn it to CD, put it in a box (or any wrapper), and ship it to anyone and list all the auctions you want. This is a real PITA I admit, but there are ways around it.

In the end, I think that eBay is being really short-sighted here, and they sure had no problems accepting millions and millions of dollars over the years for digital download listings. They have billions of dollars and a crack team of developers on staff. There’s no reason they couldn’t have fixed the problem in a way other than removing all digital downloads. The easiest of which would have been to temporarily suspended feedback on all digital downloads until a better solution was found. I can’t count the number of great eBooks and products I bought on eBay for online marketing, and while I’m sure that there are some shady sellers – every one I bought from was upstanding and had quality products.

Good job eBay – so much for thinking about the customer (or your sellers for that matter)…