Ebay, and Invisible Sales Throttling, Caps, or Limits Related to UK VAT Thresholds

Introduction

A few years ago in the new year of 2012, I started selling electronic components on ebay as a way of actually making a living.  This business operated quite happily under the UK VAT threshold and while it would never make me rich, it would do for now.  This avoided additional complications while building up the business and increasing both the breadth and depth of stock.  Over the next few years the UK VAT threshold crept upwards in line with inflation and it was easy to stay under it.  Around 2016 I made some special effort and by the end of the year had at least twice as many different items for sale and had branched out into larger second-hand electronic objects on a separate ebay shop.  A further ebay outlet sold some old tape spools that I had acquired.  Ebay sales numbers had often looked a bit strange as I inspected the daily bargraphs, but surely such is the nature of human buying habits, online marketplaces and randomness in general.  Or so I thought. 

It became clear that ebay were operating a completely invisible capping or throttling system across all these outlets.  Without any intervention by me, sales across the three outlets over one year would add up to almost exactly the UK VAT threshold for that year.  This was fine for a while.  In a way it was almost quite helpful, allowing me to increase my inventory without having to be too careful not to exceed the threshold.  However from 2017 onwards, there was no inflationary increase in the UK VAT threshold by the chancellor.  In March 2019 I decided to take the plunge and become a voluntarily VAT registered sole trader.  The assumption was that when I entered my new valid VAT number into the ebay shops, the mysterious limiting algorithm would be de-activated and I could increase sales.  In fact, I didn't assume this completely.  I thought that there was a 50/50 chance that nothing would happen, and that I would have to manually draw attention to the fact via the ebay customer support line.  I also assumed that there was a fair chance that I might have quite a fight on my hands getting the capping system removed.

On the 5th April 2019 at 23:00 I entered the VAT number one hour before it became valid. 

What Happened Next

Nothing.  Well that's not so surprising.  It would take some time for the system to recognise the fact.  However, for a substantial payment in ebay fees every month one might expect something to have happened after three days, so onto the ebay customer support telephone line I go, to draw attention to this fact and to check what the telephone operatives have to say.  I've recorded the calls for training and quality purposes.  You can click on the links to hear them or download the mp3s.  I have only edited out long periods of hold music to save the listener from the pain.  Long periods on hold are not necessarily insignificant though.  Also, in all the calls
I have left in many quite 'sensitive' details.  I don't mind.  I have nothing to hide and you can find all the addresses and usernames by going onto ebay and just typing them in. 

That's business.  When you stick your head above the parapet and say "Please buy what I'm selling," you're public property to some extent.


09-APR-2019 10:36  First call to the overseas call centre

Summary: "The VAT number is valid and there are no restrictions on your account."  ebay_vat_09042019_1036_c.mp3

The overseas call centres are not always the most reliable so the next day I request a call-back, which will usually come from the Irish call centre.

10-APR-2019  Steve from Ebay Customer Support in Ireland

Summary:  We discuss the issue briefly.  Steve says, "Hmm, I can see what you're saying here."  Really?  He gets back to the selling limits team and then drops the call like a hot potato.  Well that's no good.  Drop my call?  Back to the telephone.   ebay_vat_10042019_1_c.mp3

10-APR-2019  Derek from Ebay Customer Support in Ireland

Summary:  We discuss the same issue, noting that the addition of the VAT number was a few days ago, and the ebay denials start.  I introduce the idea of statistical analysis and noting vast swings between seperate accounts and an 85K sales cap.  Derek uses the unusual word "Levelling" without me mentioning it.  I direct him to the 11th February week data when the capping system went into a wild oscillation due to a delay between the caps on the two accounts.  Steve may well have gone into it with another team, Derek.  Before Steve dropped my call.  We discuss VIES and my registered business name and address across accounts.  Denial.  Don't worry Derek, it /is/ an absolute pattern, and I will be back.  ebay_vat_10042019_2_c.mp3

12-APR-2019

Summary to follow  ebay_vat_12042019_1_c.mp3

Summary to follow  ebay_vat_12042019_2_c.mp3

18-APR-2019

Summary to follow  ebay_vat_18042019_c.mp3

19-APR-2019

Summary to follow  ebay_vat_19042019_c.mp3

21-APR-2019

Summary to follow  ebay_vat_21042019_c.mp3

24-APR-2019

Summary to follow  ebay_vat_24042019_c.mp3

More Lack Of Progress

This telephone battle is clearly going nowhere, so I follow the advice of the customer support operatives and actually write a physical paper letter.  The details of that, the absence of a written response from anyone who is willing to give their full name, and the subsequent tedious telephone discussions are available here:  Interesting Electronics The Trouble With eBay Page

Various Interesting Sales Charts


Sales Data 31-AUG-2019 to 30-SEP-2019 (Only one ebay outlet is operating at this stage and later dates.)

On 31st August I came back from a week on holiday, during which time sales were zero for five days.  After that we see a series of successive days of sales going up-down six times.  Do people only buy on ebay on alternate days?  I don't think so.  Daily thresholds are in effect, which when exceeded cause a limit on the subsequent days sales.  If the probability of experiencing a sales increase or decrease at any given time by random chance is 0.5, then six alternating days has a probability of 0.5 raised to the power of six, that being 1.56%.  That should be quite an unusual event.  You'd expect to see that sequence repeated only rarely, perhaps once in one year.  Despite this, the sequence appears again starting on 7th September.  This time the flip of the coin occurs in opposite directions eight times, an even slimmer probability of 0.39%.  Once again, and most strikingly, on 21st September, another improbable sequence of seven consecutive up-down sales totals.  That is a sequence probability 0.78%.  It would appear that far from being unlikely, these improbable sequences are occurring almost all the time with small breaks of one or two days in between. 

Ebay Sales Figures Showing
        Threshold Based Levelling / Throttling / Limiting on Alternate
        Days

Sales Data 12-OCT-2019 to 11-NOV-2019

This behaviour is continuing into November.  It's not showing quite the same crazy comb effect as above, but there are another two highly improbable sequences of higher and lower sales on alternate days.  The first starts on the first bar, 12 October and there is a run of eight up-down cycles, p=0.39%.  The second starts on 28th October and is another run of eight up-down cycles, more marked this time.  Again, the probability of this happening at any given time is 0.39% so it should only happen about once or twice in a year. (1/365 would be 0.27%)  You can argue to toss on the statistical detail, but the ebay throttling / capping system makes an almost perfect daily oscillator, inexplicable by any other reason.  In electronic engineering we call this a relaxation oscillator.  You can make one with a single transistor instead of a strong ebay shop with threshold capped sales.  That also involves a threshold and recovery cycle.  The higher the gain of the transistor, the higher the oscillation frequency.  But we can only see samples of daily sales figures.  It might be even more interesting to consider how infrequently subsequent days don't show a relaxation oscillation.  The daily sampling of the bargraphs is likely to be showing classic Nyquist aliasing of an oscillation that is too fast to capture.

Suspicious Ebay Sales Figures Showing
                  Throttling or Capping Oscillations

That's the trouble with electronics engineers.  We're not idiots, eBay.

Going back in time a bit.

You'll remember how this all came to a head early-on in 2019, when the obvious strange capping behaviour could no longer be ignored.  I've found one of the print-outs, and here is the scan showing jenna_stannis sales from 11-FEB-2019 to 11-MAR-2019.  This is discussed in some of the previous telephone calls. 

jenna_stannis sales
                  February 2019

Prompted by a big sale one day, here the sales limiting algorithm goes into a completely wild oscillation.  Starting at the beginning of this chart there is an extremely marked alternating day to day pattern, and a run of no less than seventeen up-down swings, gradually reducing in amplitude much like an accidentally resonant system given a large impulse input might make.  What's the probability of that run happening naturally by chance?  0.5 ^17 = 7.62 X 10^-6, or 7.6 chances in one million.  This is what I call "proof."  Certainly, if eBay start printing lottery tickets I won't be in the queue to buy one, because I'm obviously the unluckiest seller in the entire world, or one of only 7.6 people in a million to see this.  I'll be adding more interesting charts as time progresses.

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