Buying or selling a business including eBay/Amazon or social media accounts

It is becoming increasingly common for businesses to trade through eBay, Amazon or other online marketplaces and their sales through these websites can often add tremendous value to the business. The major problem is that in order to sell on those websites you have to accept and comply with their terms which often prohibit the transfer of the account. eBay’s rules ( state that no seller can transfer their account without eBay’s consent. If you look at the terms on Amazon, Facebook, Twitter or Google+ you will find that they all have similar terms prohibiting the transfer of accounts.

These websites are extremely unlikely to give their consent to the transfer of an account and the reasons why are pretty obvious. Using eBay as an example, imagine a scenario where Mr Jones has an eBay account with 100,000 positive feedback and 5 years of trading history. He wants to retire so sells and transfers the account to Mr Smith by changing the primary email address and giving him the password. Mr Smith is a crook and uses the account to set up a scam (common scams include selling high value items at knock down prices, taking the money but not delivering the goods – for example selling tickets to the Champions League Final for £50, hundreds if not thousands of people may buy and pay for the tickets which would never turn up). The eBay users who buy from Mr Smith would do so relying on the reputation built up by Mr Jones, they would have no idea that the account had actually changed ownership. This would damage eBay’s reputation and consume a lot of eBay’s time in dealing with the complaints/refunds. eBay’s position is, understandably, that feedback is personal and you should only be able to benefit from feedback you have built up yourself.

Without the eBay and Amazon accounts, feedback and trading history the value of the business will be significantly lower and the volume of business is extremely unlikely to be as good under a new account with no feedback or trading history.

There are some reports online of users being banned (along with all accounts associated to them/their address) from sites like eBay for transferring their account without consent.

Buyers need to be aware of this issue even if eBay is just a small part of the trade.

What can sellers do?

If you run an eBay business you should consider setting up a limited company through which to run your eBay account. If you want to sell your business in the future you can simply sell the Company and as the Company holds the eBay account the new owner will take control of it. There is no transfer of the account in such circumstances and therefore no breach of eBay rules.

What can Buyers do?

If you are purchasing a business (not a company) which trades through eBay you could consider asking the selling to incorporate a company and seek consent from eBay to transfer the account into the name of the company (although there is no guarantee that eBay would consent to this, I did put the question directly to eBay and they indicated that in general they would approve the transfer of an account in circumstances where a sole trader/partnership converts the business into a limited company). Alternatively the buyer could require the seller to delete the account as part of the sale and seek a reduction in the purchase price to reflect the reduced value of the business as a result of losing the trading history and feedback.

How can we help?

When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.

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