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Is reselling on eBay even legal?

eBay sellers often clear shelves, giving them a bad reputation.
eBay sellers often clear shelves, giving them a bad reputation.
Photo by Scott Olson/Getty Images

There is a rumor floating around cyberspace that buying items from thrift stores, consignment stores, flea markets, antique stores, or retail stores for the purpose of reselling is illegal. This is a common misconception. A particular store or company may place limits on items sold to customers, for example when an item is on sale there may be a limit of 10 per customer. It is legal for stores to limit a quantity purchased, but it is impossible for them to enforce a “no reselling” policy.

Reselling goes back to the First-Sale Doctrine:

“The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c). Since the first sale doctrine never protects a defendant who makes unauthorized reproductions of a copyrighted work, the first sale doctrine cannot be a successful defense in cases that allege infringing reproduction.” (See the entire First Sale Doctrine.)

This issue is a major point of debate for retail stores who assume that buyers purchasing in large quantities are reselling the merchandise on eBay. Some retailers see eBay sellers as “product hogs” – clearing out shelves of merchandise so that the item is always out of stock. Stock-outs create a problem for retailers because they can't serve their customers. A good example is the hot toy at Christmas time. A toy hits the market in late fall, supply cannot keep up with demand, and some of the scarce product ends up on eBay at an inflated price. eBay is a secondary market and the laws of supply and demand will always govern the sales price of an item, unlike in retail stores where the price is set.

eBay sellers have reported that certain retail stores will ban resellers. Coach is a perfect example. Sellers who frequent the Coach Outlet and purchase in quantity are often discovered and banned from the store. Lululemon has also recently had issues with eBay sellers reselling their merchandise without purchasing it first. A retail store has every right to ban certain customers from their store for whatever reason they see fit, so it is best to be inconspicuous when purchasing for resale.

Bottom line: it is not illegal to resell an item you have purchased. Always take the time to authenticate designer items before selling on eBay because selling counterfeit items is illegal, and listing them on eBay can result in account termination.