I have worked in the mining industry for 18 years and co-founded four junior mining companies including one public company. When I first heard that people were selling mining claims on Ebay I was super skeptical and even dismissive.
I thought Ebay would attract too many scams and that the buyers would not be sophisticated enough to navigate what could be a complex transaction.
Here’s why I was wrong:
I still held onto the idea of Ebay as a market for collectibles when it had grown into one of the largest markets for pretty much everything. Just as Amazon had evolved from selling books – so too with Ebay.
Here are some reasons why Ebay has been so good for mining claims: 1) buyers get to rate sellers and visa versa – so bad actors are quickly weeded out; 2) sellers need a good rating to keep selling so there is lots of pressure to keep the customers happy and give them good value; 3) it is open and transparent and run by a large, respected 3rd party; and 4) the auction process that brings in the knowledge of lots of potential buyers ‘magically’ finds fair value more accurately than just one buyer negotiating privately with one seller.
As a believer in free markets – all this should have been obvious to me. But, like many ‘experts’ sometimes I am blinded by my own knowledge.
One of the craziest things I have noticed about Ebay is that good districts get more and higher bids – even if most of the bidders don’t know enough to make this evaluation. Just one knowledgeable bidder can make everyone else smarter.
And if the smart buyers are not bidding – this lowers the price.
All the bidders (regardless of experience) benefit from having just one smart guy in the market. And Ebay has lots of smart buyers (and sellers).
Like most sellers I check out my competition pretty regularly. They are mostly doing a great job. One of the most famous sellers (I won’t name names) regularly comes up with claims I like and know about.
One of the best things about the Ebay mining market is that it helps newcomers get into the mining business in an affordable and professional way.
Now compare Ebay to the market for claims in other venues – websites run by one seller or websites dedicated to advertising mining claims. The prices for comparable claims are often 10x to 100x higher. Is this justified? In many cases no. I have met customers who have bought from these sources and many are unhappy with their experience and the fact that they massively overpaid. But there is no recourse – where are they going to leave their ‘one star’ review?
Ebay favors the buyers. The prices on Ebay are lower than comparable listings elsewhere. Bringing more buyers into the mining claim market at reasonable prices will help the industry over the long term.
I hope Ebay continues their current policies and doesn’t change their format or website too much. It would be a shame if this market has to go back to the bad old days.