Why You Should Never Start an Ebay Store

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If you are going to take your online store seriously, you need to register your own domain and implement your own website. Many people who don’t consider themselves tech saavy often question their own abilities and end up relying on 3rd party sites such as Ebay, Yahoo etc… to implement their website store for them.

Let me tell you why that’s a bad idea.

Why You Should Never Start an Ebay Store

Ebay Doesn’t Have Your Interests In Mind

Ebay, like most publicly traded companies are primarily concerned with their own growth and stock price. They don’t care whether you are successful, nor do they care whether you provide a genuine service to the community. They’ll do whatever it takes to demonstrate growth and make shareholders happy.

What this means is that you are always at their mercy and they can choose to put you out of business at their own whim. Most of their changes recently have been in the form of price hikes for using their service. Let’s take a quick peek at their store pricing policy.

Final Value Fees
Price Final Value Fee
Item not sold No Fee
$1.00 – $25.00 12.00% of the closing price
$25.01 – $100.00 12.00% of the initial $25.00 ($3.00), plus 8.00% of the remaining closing value balance
$100.01 – $1,000.00 12.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the remaining closing value balance $100.01 – $1,000.00
Over $1,000.01 12.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the initial $100.01 – $1,000.00 ($36.00), plus 2.00% of the remaining closing value balance ($1,000.01-closing value)

If you were to open a store on Ebay, Ebay would take between 8-12 percent of your gross sales. Couple that with the fact that you have to use paypal for your transactions, Ebay takes between 11-15% of your revenue right off the bat. This is ridiculous!

In addition to this, you also have to pay a monthly store membership fee just for the right to get ripped off. For the past few years, Ebay’s growth has ground to a halt. You can be sure that more rate hikes will be on the horizon soon.

Ebay Stores Don’t Provide Design Flexibility

Unless you feel like paying hundreds of dollars a month, Ebay greatly limits what you can do with your Ebay storefront. They try to bundle their stores with a bunch of tools to add value, but most or all of these tools are available on the web for free already thanks to companies like Google.

To give you an idea of how restrictive an ebay store can be, the “Anchor” membership which costs $300 a month, allows you to build 15 custom webpages. Wow! 15 whole pages for $300 a month. Meanwhile, you can build unlimited pages on your own website that you host yourself.

Ebay Shoppers are Inherently Cheap

When I shop on Ebay, I shop for bargains. Especially since most of the stores on Ebay are mom and pop shops or individuals working out of their own home, I naturally expect to pay less for my merchandise.

What this means, is that you will rarely get top dollar for your items. Because you are limited by what Ebay allows you to do with your store design, the only way to differentiate yourself will be to lower your prices which will cut into your margins.

The Ebay marketplace is extremely competitive, cut throat and hard to break into.

Still Afraid to Open Your Own Store?

There are many shopping cart or online store software packages already written for you. Here are some choices.

Whatever you decide, stay away from Ebay Stores. As far as I’m concerned, Ebay is only good for getting rid of unwanted items through their auctions.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

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143 thoughts on “Why You Should Never Start an Ebay Store”

  1. William says:

    Got to love an article that bashes ebay and then says “here, look at this free ebook and buy our online course…..”


    1. tony says:

      I totally agree this moron is writing an article about how crappy eBay is but yet he’s telling us to do free websites which is all good and dandy but I guarantee you you can’t get traffic like eBay. Who cares if you make charges A fee it’s called you gotta spend money to make money doing your own website is a pain in the ass. The simple fact is the traffic is so hard to get and the way Google keeps changing their algorithms will never be able to be good at getting traffic unless you have a lot of money to spend a lot of time to be able to work on your website. Yes eBay is not the best but it is much better than doing your own website unless you’re very experienced you know how to get traffic he know what needs to be done and you can spend a lot of time on your business. Also what this guy is telling you about Mom and Pop stores and people that work at home he is 100% wrong. I’ve seen many stores sell high-quality equipment so unless he’s living in 1980 before the internet very popular he is wrong. I mean I understand why he doesn’t like eBay a lot of stuff on there makes it seem not worth doing but when you think about how much it cost to do traffic yourself you’re going to realize eBay Amazon third-party apps are the way to go

      1. Toby says:

        Totally agree with tony, Russell and the others who point out that this is a one sided article. A shopify store isn’t free, or cheap, as you have to pay hundreds of dollars a month in SEO and advertising to even have a small potential customer base. And Google is just as likely to changes the rules as eBay.
        Everything costs. They’re just different.

    2. Peter Griffin says:

      I think it’s absolutely ridiculous to sit here and say not to utilize Ebay. Granted, Ebay is FAR from perfect, but it accounts for close to 70% of my sales. I guess we shouldn’t use Etsy either right? Give me a break. My website accounts for less than 5% of my sales, it is what it is. Unless you have extensive amounts of time to work on SEO or blogging, the Ebay or Etsy fees are not that bad. Just my two cents.

    3. I would take this article with a grain of salt since the success of an E-Bay seller really depends on several different factors. Location, sourcing of items at the right price and quality of listings I think are the three most important factors that will be determine the outcome of your success for most individuals. Now, fees are part of any business – whether you pay E-Bay or a hosting company on your own website – fees are a harsh reality of creating your own business. Many people like myself would much rather focus on sourcing and taking care of the actual sales process than spending time, money and effort trying to drive customers to your site. For a one person operation (like me) it makes perfect sense to pay 10%-15% in fees as long as I can have a decent profit margin it is well worth having an E-Bay store for the present and for the future.

    4. eBay will steal you blind I know first hand they took nineteen dollar out of my bank account without my OK to pay for a return when they told me I did not have to pay for my return they are a bunch of crooked pigs.

      1. Bob says:

        19 whole dollars. Oh the calamity.

  2. Lori says:

    I am looking forward to reading your free course.
    I am needing to find a second job.
    I have a job I love (courthouse court room clerk) but I just want to be able to get extras for my family (a lil fishing boat) or take a vacation (gasp!) And save for retirement.

  3. I was seller on ebay for as long as 5 years with more then 11000+ feedback even after this I have no Guarantee when one morning i will wake up to see eBay has suspend my account because they have so many buyer centric policies that its almost impossible to survive for long time on eBay, most important thing is from last one year due to there New policy of buyer can open dispute whenever they wish and seller get defect on his/her account after that once issue is resolve you all time run behind eBay and they will remove this dispute if they feel or if they are in mood to remove it( its not a Joke, its reality), I sell Handmade Slippers, Shoes and Wallets all made in Poland unique items and I feel that on ebay its very difficult to create a brand name for myself, I feel like I am there employee who is working under under ebay and to work for them i am also paying them monthly fees, enough is enough. 5 months ago i made a bold decision of my life to get out of this Sink hole call eBay and create my Own Identity and make website for myself call http://www.reindeerleather.com and my business is ok hope it will improve soon as i am positive about it.

  4. Russell Williams says:

    Sorry, but I disagree strongly with your logic (and no, I’m not a current Ebay store owner). You say that Ebay/Paypal are “ripping you off” by taking 11-15% of your revenue, but in fact in any business, especially the very crowded ecommerce space, as much as 20% cost-of-sales is very reasonable. Remember, Ebay gives you access to a huge potential customer pool and although most of them are looking for a bargain, if you have the right mixture of goods at reasonable prices (which you should have in ANY business), the financial logistics are actually very good. The option that’s offered in this advertorial (for that’s what it is) doesn’t account for the high cost and lengthy time cycle of driving traffic to your own ecommerce website.
    Is the author really saying that the thousands of people who currently operate Ebay stores are misguided and could do better on their own?
    Proof please?
    And I don’t mean one or two anecdotal instances where “my sister’s brother-in-law made a million dollars last year” but actual evidence from a reputable source that promotes the business case that you’re suggesting.
    I think a moch more solid strategy would be to open your own ecommerce store in tandem with an Ebay store so that as you begin to grow your customer base, you can educate them about your alternate sales channels.

    1. farah shamtoob says:

      Total crap. You can have 2,000,000. items and make good money and have all positive feedback. Then one day you wake up and boom., without advanced notice, your sore is shut down and you are stuck with 2,000,000 items.
      OK, what do you do next with 30,000 dollar merchandise ?

      1. Pierre Cote says:

        That’s not true. The only way and I repeat, the only way that eBay would shut you down the way that you are describing is if you were actually ripping people off.

    2. A. H. says:

      Ebay has a reputation of shutting down businesses whenever they want, I have heard PayPal will hold your pay as well. People are just trying to warn others about Ebay.

      1. I don’t know who told you about Paypal, it doesn’t hold my money. The funds are available in a day or two.

      2. Jain Hazen says:

        A.H. is exactly correct. Have noticed the comments are filled with pro-eBay shills who like to bash anyone who points out the misdeeds of eBay. One finds the same strategy being employed in the eBay chat forums as well (and this has been going on for years).

      3. @Jain Hazen: the comments are filled with opinions on both sides of the equation. No reason to bash either side. We all are adults here, aren’t we. For the record, I don’t work for eBay

  5. I agree that eBay and Amazon are best market place to start your your business and to get to know which product you can sell and how buyer reacts to your your product, this are best platform to gain experince and knowledge to start your own business, however you cant make it as a long term business option, I was selling on eBay and I know how difficult it become after certain period of time, for example say you sell 600 items in a month with profit margin of around 10% after deducting 15 to 20% of eBay and paypal Final value fees( please note I have not added insertion fees in it) ok so I sell 600 items in a month out of which I got 10 item not received disputes, 10 Item not as discribe disputes, 2 negative feedback 2 Neutral feeback, on every INR, negative, neutral and god know what more things (item not received dispute) ebay give you defect and in paticular month your defects should not exceed more then 5% I can go indepth of it however it will take my whole day and night to explain in detail, My point is ,Yes sells volumn is very high however my profit after all this is only 5% ( I didnt include my work force and other things in it), Ok some sellers can bare with this too as sell volumn is very high on market place, however what is guarantee that I will be not out of business next morning i wake up, beleive me while selling on eBay i had sleepless nights all time near PC waiting to check and praying please no buyer open dispute today or leave me bad feedback because today there mood is bad.
    I left my job and started selling on ebay thinking I will be my own boss, however one morning I find that still I am employee of ebay difference is I am paying them for working under them as well as I dont know when they will kick me out and I will be without business.I didnt have my own identity on eBay what so ever.
    Now I have my own website and I have peace of mind,my buyers recognize me as Owner of http://www.Reindeerleather.com and I can explore my creativity which I was not able to do on eBay or on amazon, now i can give that 15% ebay and paypal fees to buyers in terms of discount, why everyone of us have to be in that virtual black hole when we can easily get out of it, we need to work hard and be little creative to make our own identity which will help in long run, eBay and Amazon will lead us nowhere, you never know what policy of there you will voilate and one good morning you wake up to see that you are back to square one again and everything is gone,I am sorry however I really dont support selling on market place if you are serious about your business make your own website its difficult but not impossible, if you are selling as part time eBay is best place to sell your Stuff.

    1. Jamie rau says:

      Im always amazed how people like to explain how this is bad or that, didnt you do any research have any business experience , you think ebay is bad , have a idiot post a false comment on a google review or yelp etc on a standing store , it can be devistating, . Its all the same you cant get away from it reviews and reviews its the future. And to the guy above with his 5 percent profit margin , try having a store , insurance business lic , etc plus pay employees , workmans. Comp , power should i go on , ebay dosent sound that bad now . Ebay is a good start and the big successful people on there have a web sight , and a store . Sorry life isnt easy so study your market , your customers /demographics and keep positive people around you , if it was easy everyone would do it . Go for it , for every person having a issue ,theres 100s that do well that goes for any business . Start small stay focused and grow as you get sales , but always have a growth plan , it isnt dreaming its called being positive and diaciplined. But hey thats jus my opinion lol

    2. John says:

      You can barely express yourself – it’s not surprising you had trouble on the e-commerce sites.

    3. I am curious about your numbers. eBay final value fee is 10% and Paypal is roughly 3%. Then again, you are silent about your site upkeep costs that I am certain are more than eBay and Paypal together, and then some.

  6. Divine says:

    Not dating articles is dirty and scummy as hell.

    1. Ron says:

      Very true. It would be nice to know when this was written because the eBay fees mentioned here are no longer accurate and are, in fact, substantially less in June 2016 than the figures quoted.

  7. There’s been a recent flood of small former ebay sellers over to two new sites, Toucandeal and Vangoe.com…Vangoe offers stores, both sites are free to list and are growing rapidly.

    1. CD says:

      These sites have no where near the ebay traffic. I also had my own site for awhile, it didnt get near the traffic ebay did. So the 15% is worth it. I dont like the 5% of sales though, ppl that sell higher dollar items, but less volume, one complaint can kill them…This needs to be changed. Also when someone has been a seller for over 13 years, and ebay auto holds $ when a brand new buyer files a claim, thats just crazy.

      1. I have tried both eBay and Amazon. Steve is absolutely right when he says eBay Shoppers are Inherently Cheap. By the time I lowered prices to where the items would sell and then paid the final value fees, monthly store fees, and various other fees.. it just wasn’t worth my time.
        Amazon is somewhat better.. but their business model of allowing everyone else to pile onto your listing is a horrible idea. Everyone spends all day hanging in their Amazon account.. lowering prices a penny or two on each item so they can get the Buy Box. It’s ridiculous.. who has that kind of time?
        For the price of all the fees.. you can buy some Google advertising.. run your own websites and keep ALL of the profit for yourself.

  8. Great article but there is a slight problem. It takes a lot of SEO and time to get traffic to your website. Ebay has millions and millions of people, which is instant traffic, so in reality, that is what you are paying for, is that instant traffic to your auction, and SEO Does take a lot of work and knowledge to implement it. It does take some time to get ahead in google for your key words.

    1. tot says:

      I agree with Russell Williams everything he said is the same thing I’ve been saying to everyone that down to eBay yes eBay has a lot of problems and yes eBay is not the best way to do business but it is one of the most successful way to do it nobody can compare to eBay or Amazon traffic they bring you in for the trouble that you have to go through to get your own traffic it’s nearly impossible unless you have a lot of money and a lot of time to spend so one that has done websites that have been decently successful I know what works and what doesn’t eBay does work but just like other people have said have a website have many other options besides eBay or Amazon because at any given time they can suspend you for reasons unknown or for reasons that are not or do not seem fair at all.

  9. Like I was saying, SEO. If you notice how Agnieszka Bane, left a link of his website on his reply ? You will find yourself doing alot of that which is all part of generating the traffic to your site. Please don’t get me wrong. I think its great to have your own website. Just learn good SEO practices. I

  10. LATEST REVELATIONS FROM FORMER EBAY INSIDER: When eBay randomly lowers the search standings of sellers items, or hides them completely, they do this due to supply and demand. With the World economy in the state it has been in since the financial decline of 2007, there are too many sellers and not enough buyers. So the corrupt Ivy League brains at eBay came up with a strategy. Encourage sellers to post, while secretly lowering their search standings and hiding their listings. Just enough to bring in a montly amount of sales to make it appear worth while. Countless sellers have stated on various message boards that they noticed a “cap” in their monthly sales. That no matter how much effort and time they put into their postings, they could not surpass a certain amount of sales per month. This was and is eBay lowering search standings and/or hiding sellers listings at random, so new sellers can sell their goods. And/or so large sellers (including those from China) can sell theirs. This is also known as “Throttling” which is against FTC (Federal Trade Commission) Laws. ATT was just fined 100 million dollars last year for illegal throttling it’s customers. -It’s been proven and documented. As they say “Numbers don’t lie.” We documented our monthly sales via eBay’s Sellers Dashboard and then proceeded to ramp up our monthly postings into the thousands. It made no difference. eBay customer service whined on the phone and admitted our search standings were lowered or hidden (although we still had to pay fees), that “other sellers had to have a chance to sell their items too.” Our main issue is we were presented with a fraudulent Selling Limit of 30K per month. We were capped at 3K to 4K each month. No matter what we did. How much we invested. Evidently ( by countless accounts, including internally at eBay), the eBay “Bots” the automated, metric-centric virus eBay created and introduced into their system(s) randomly targets small to mid-size sellers. This is so the executives can deny culpability. January 16 at 1:17pm They can deny it because the “Bots” are doing the damage, not management. Lol. They point the fingers at what they unleashed. Blatant fraud as all of this was reported to eBay and they did nothing. I think it is very difficult for Sellers to wrap their minds around all of this. And they tend to project their morals and ethics on to strangers. They can’t imagine executives actually being engaged in this kind of criminal activity. This is also why the Banks and Wall St. were bailed out by the American people, and why they continue to asset strip the U.S. on Wall St. and in Washington D.C. This IS an all-out war on the middle and lower classes.” (FORMER EBAY INSIDER, confidential informant)

  11. BILL says:

    I am on eBay and have my own website. Ebay costs but it is virtually a no hassle with high fees.
    The easiest part of a website is building it. the hardest part is getting people to find your website. Search engine optimization (SEO) is the mothod of doing that. You really dan’t do it your self. It could cost up to $5000,00 to have your site show up on google and other sites. And it takes a long time especially if you are in a highly competative business. Type in some key words that describes what you do such as “garden tools” in a search engine and see how many business you have to climb over to get close to the top.

    Good luck

  12. Debo says:

    When is this article from?

  13. I know several people who tried this shopify lunacy and got screwed royally. The charges to reach others thru more search contacts, constant fees, constant promises that are not kept, made them all close and regret ever trying. They are more expensive thru search engine charges, than all of Ebays fees and Paypals, COMBINED!!!!

  14. Yes, eBay takes their fees, but what’s on offer? Exposure to millions of potential buyers. The biggest problem for smaller online sellers is getting traffic to their sites. For a monthly cost that’s small compared to Adwords or Facebook ads, eBay solves that. Dismissing a valuable sales channel indicates you don’t know much about eCommerce or business in general.

  15. We also had an ebay shop for over two years, at the beginning business was good and we had a steady increase in sales , then wham all of a sudden our sales dropped by over 30% in one month !!! now we agree that ebay fee’s are a tad high but we’re sure we were capped and we asked ebay if they did this, but they denied it.
    We no longer have an ebay shop as it’s just not cost worthy but we do still use them for special offers we have from time to time.
    Luckily our website http://www.info8.co.uk does ok and were not reliant on sales from ebay but we know many are and it’s always the little guy who gets f****d up by them.
    Shame really as ebay started out as a great selling platform , now its all about how much they can make from us sellers.
    Ok rant over :)

  16. Wendy says:

    How do you get $6 out of 8% of $100? Last time I looked, it was $6. And, $36 being 4% of $1000? I thought it was $40. Your claim regarding fees on PayPal is as truthful as Donald Trump. We just sold an item for which we received $143.98. Our fee was 3.1%. It has NEVER even been more than 5%, if it was more than the 3.1%. Maybe it’s your bad math that caused your problems more than ebay’s fees. Yes, it costs to use ebay. It costs to host a website, too. But, I don’t want to be bothered with the set up or the calculations. I can also ship internationally through ebay without having to actually do the shipping myself. Ebay takes care of that through their global shipping service at no cost to me. I just make sure the item is received by them to forward to the international customer. Your claims about ebay’s fees are not just misleading – they are fabricated!!

  17. Jessikah Doughtery says:

    It’s not that simple to get business through your own domain. I had an eBay store and my own website. I hardly got any traffic through my own site because there are millions of sites are there. I lost of lot of money paying for Google and Facebook fee per click ads. A site like eBay is well known and more trusted than http://www.whoisthis.com. Of course the goal of any business to pay the least amount of fees as possible, but you’ll either pay through Google or Yahoo ads or pay a site like eBay or Amazon.

  18. I must disagree. I started my business on Ebay, then slowly build my online store.
    This gave me a chance to understand which products are more popular, which ones aren’t.
    I have an Excel table to calculate my prices and the prices on Ebay are higher than the prices on my online store, to make up for the percentage they take. Here in Australia, if you have a store ($45/month), their percentage is 7% on top of the final value (postage included), then the Paypal fee, which I also pay on most items sold at my own store.
    So 7% per sale + the $45/month store fee. It is not cheap, but in my view it is worth it.
    Ebay does A LOT of advertising. My products often get seen o Google searches because of Ebay. There is sooo much traffic, you will never get so many people to see your logo, even if you spend thousands on Google ads or any other ads.
    You just have to be clever on Ebay.
    The pictures I have on my Ebay listings are all from my website (links to my website from a very reputable site with a lot of views means my website gets higher on searches too). And my logo. Often people find us on Ebay, go searching on Google, find my website, notice that the products are cheaper and buy direct from us.
    I sell a lot of cheap, small items on Ebay such as travelling locks, breathalyzers, earplugs, hi-vis vests, etc.
    With each item, I normally send a flyer with my online store details, sometimes a $10 voucher, so this way I am promoting the store. And with each sale, you get another client for your mailing list, because you get the person’s email.
    Yes, I know, we shouldn’t spam, but you can send a nice message asking if they are happy with their purchase or thanking for a positive feedback, add a $10 voucher to your store and inform that once a month (never more often) you will send a newsletter. Make it interesting and very easy to opt out and you won’t have an issue.

  19. Peter says:

    This is at best an attention-grabbing piece to generate readership, and at worst a reckless scare-tactic post based on little substance.

    Here’s the thing. You’re probably right about ebay not being a good platform for certain types of sellers, but how could you reasonably assume that an eBay store would be a bad for ALL sellers and ALL businesses? That’s utter rubbish. There are many situations where an eBay store would not only be beneficial for sellers, but borderline necessary in order to succeed. Your argument holds no water.

    If there’s one thing you should have learned by now it’s that business is never black and white, but various shades of gray which are highly dependent on the an individual’s specific circumstances. Perhaps you are the one who needs to take a course on this particular lesson instead of spewing misinformation for your own gain.

  20. Craig says:

    YEAH This is a GREAT idea if you want to slash your sales by 70%… What a poorly researched pile of steaming shit.

  21. Jay says:

    I sell $14k-$18k a month on eBay. My profit margin after Fees, shipping, COGS and taxes, is somewhere north of 30%. I sell toys/action figures out of my house. No overhead, pick my hours, have a ton repeat customers, I straight list in a t-shirt and slippers. Sometimes i’ll even rip a joint before listing. Point is, if you use common sense and sell stuff that people use or collect, you can kill it on eBay and be YOUR OWN BOSS.

    As far as Shopify ect…. don’t have experience on those but I would take a guess and say unless your Instagram is on point and Facebooking to death, you just can’t touch eBays traffic.

  22. Sierra says:

    Time to update your post about eBay fees. They’ve been 10% for quite awhile now. If you can’t keep your page updated, the public would be better served if you’d just delete it. I had an eBay store for a few months last year and I think they charged 9% FVF (but of course just having the store cost almost $25 per month!).

    1. Anna says:

      Your info about eBay fees is outdated and simply incorrect. With basic subscription, you can list up to 250 fixed price listings and up to 250 auctions per month with NO insertion fees. Furthermore, final value fee with a basic store is 9% max (and 10% without the store subscription). The basic store monthly fee is roughly $20 or even less when they run promotions of $5 a month for 3 months like they do now.

      You are being silent about certain store features that boost sales, such as Markdown Manager. When you drop your item price, it’s being displayed with an old price crossed over, so that buyers think they get a bargain. And I am sure a few more features.

      Not everything is so bad about an eBay store. IMO

  23. There is some truth to the fact that eBay has a lot of flaws. However, eBay also does a lot of advertising. How much do you need to spend on advertising in order to get the same sales volume on your site as you get on eBay? I can compare because I have both.

  24. Jackson P says:

    Ebay is flawed, ruthless and unethical. From a seller viewpoint, they know the marketplace lacks competition, so they do whatever they want. Raise fees, lower profit for sellers and side with buyers and ridiculous claims.

    Almost every comment here that sides with ebay says the truth – ebay provides a name and traffic to sell your goods. They know this and like I said, they know there is no competing website, so they take advantage of every seller on the site.

    My main gripe is the poor handling of customer issues. Thankfully I have had minimal customers complain – but holy smokes when they do, even if the customer lies, ebay will side with them.

    At the end of the day, you have to look at your costs. Can you start your own site and do it cost effectively, or do you need to use ebay? Once you figure out the answer, go get some lube and let ebay bend you over.

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