Secondhand blues for eBay consignment sellers

States contemplate new laws targeting online resellers. But are they thoughtlessly applying offline rules to the Net?

When Debbie Gordon founded Snappy Auctions, she thought her time would be focused on entrepreneurial tasks like selling franchises and linking the online store's computers to those of shipping companies.

But last year she received an unexpected letter from the Tennessee Auctioneer Commission. It ordered Gordon, an eBay consignment seller in Nashville, to submit to mandatory training and licensing. In addition, Snappy Auctions would be required to hire a government-approved auctioneer who had completed a two-year apprenticeship and possessed a "qualifying education certificate."

"We discussed the laws with the commissioner and understood that it does indeed apply to us, so we obviously complied and I got my license," Gordon said. "There were only 13 schools in the country. Luckily there happens to be one in Tennessee."


What's new:
As the popularity of online consignment sellers grows, a number of state legislatures are contemplating new laws that would target this popular auction technique.

Bottom line:
The heightened regulatory scrutiny has online auction sellers worried that states are taking offline regulations and without thought applying them to online marketplaces.

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Gordon may have been one of the first online consignment sellers to run afoul of auction commissions, but she won't be the last. A growing number of state legislatures are contemplating new laws that would target this popular auction technique, while regulators are weighing whether to invoke licensing laws already on the books.

Online consignment sellers, which go by names like, and, typically sell their clients' items on auction Web sites in exchange for a fee of around 35 percent. eBay has embraced the concept, which it refers to as trading assistants and trading posts, and even features some of those sellers as "eBay University" instructors.

That increased popularity has invited heightened regulatory scrutiny. Twenty-seven states require auctioneers to be licensed, according to the National Auctioneers Association, and other states like California view consignment sellers as the equivalent of pawn shops.

In San Diego County, deputies from the sheriff's office have been visiting Internet consignment sellers to verify that they have the "secondhand good" licenses that pawn shops are required to obtain.

"There have been complaints by secondhand dealers," said Sgt. Mark Stevens of the San Diego Sheriff's Office. "They feel that the stores should be licensed."

Under California law, secondhand dealers are defined as anyone who accepts items "for sale on consignment" or "for auctioning." Dealers must file daily reports with the police that include names, fingerprints and home addresses of each person trying to sell an item, along with that person's driver's license or passport number.

"In California, the law says if your business accepts property on consignment or accepts property for auction, you'll have to get a license," Stevens said. "The way we will most likely handle it is

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