Legal implications of running a marketplace like eBay

Anybody have any knowledge of what it would take to successfully pull off such a thing, legally speaking?

 

If you can make it just like ebay but without the fees im in.

 

Here's the tough part: even eBay doesn't want to be a money transmitter. (PayPal is responsible for being the money transmitter, and that's why there would be no eBay without PayPal--which is now owned by eBay.) A money transmitter is the 3rd party that actually is responsible for taking a percentage of each payment between two individuals. There are a lot of compliance laws and licenses that are very expensive and lots of other hoops you have to jump through in order to be a money transmitter, so without this you can't have your eBay. Luckily, there are third party companies that can do this for you now (BrainTree, etc.), but they take a serious cut. I hope this helps.

 

I think that the main legal issue is that the website has to be clear that it is acting simply as a connection between two parties who are transacting business. The actual transaction is between the buyer and seller and the site is merely providing the platform for the two parties to find each other and then make the sale. The website is not vouching for either party nor responsible for the outcome of the transaction.

 

You're right jrbiz, until or unless the website takes a cut of each transaction it's no problem at all. Once that happens though, there are a lot of hoops to jump through, and this is why companies like BrainTree & PayPal are in business. Do a Google search for "money transmitter laws" for more info.