eBay Overview

"What makes eBay successful.. the real value and the real power at eBay is the community. It's the buyers and sellers coming together and forming a marketplace." Pierre Omidyar, eBay founder.

In 1995 eBay was launched as AuctionWeb by Pierre Omidyar which began with a broken laser pointer being the first listed item. The broken laser pointer sold for $14.83 - Pierre asked the buyer if he realised the item was broken and the buyer answered "I'm a collector of broken laser pointers" (1Hsiao, 2012).

eBay has 2 ways in which to purchase items - fixed price or auction. Fixed price is where you can buy the item immediately for the price listed. Auction is where you can place a bid for an item and there is a predeterminined time that item is open for bids. Once the time is up, the item is sold to the highest bidder (2Hsiao, 2012).

Below is a short video which explains the eBay auction process…

Introduction to eBay Auctions, 2011

eBay started out as a place to trade collectable and hard to find items. It has now evolved into a global marketplace that gives anyone with internet access a place to buy and sell almost anything (1Hsiao, 2012).

By 1997 eBay was hosting over 200,000 individual auctions each month, compared to 250,000 total auctions in 1996 (http://www.ebayinc.com/). eBay has evolved from selling one item in 1995 to selling $68.6 billion worth of goods sold on eBay in 2011 (1Hsiao, 2012).

The eBay community plays an important part in rating performance for buyers and sellers. It is up to the individual to ensure feedback is provided and any negative feedback can impact greatly on future purchases or sales. eBay administration has the power to suspend members if they have low ratings or excessive complaints. Buyers are encouraged to ask questions and commmunicate with the seller and there are discussion boards which allow users to chat and provide support within the community (Lillie, 2006).

eBay’s competitors include such online entities as Amazon, Yahoo and AOL. During its history eBay was almost sold twice to large Internet entities. Once to AOL and then later Yahoo. According to a 2004 Fortune Magazine profile on then eBay CEO Meg Whitman, eBay’s adherence to the principles of servicing the consumer and consumer needs in the online auction space lead to decisions not to proceed to sale. eBay operates with a focus on providing a quality online service and consumer experience. "We used this phrase, 'Play good golf,' " says Jeff Jordan, who heads eBay's North American operations. "That means play your own game well and don't get hung up on where the other guy's ball is." (Sellers, 2004).

The focus on eBay’s offering and its area of greatest success is also evident in the company’s decision not to expand into B2B markets, but instead to focus on the consumer market as that was where most eBay sales were occurring in its early years.

Whilst eBay was impacted by the global financial crisis, the company’s adaption to changes in online consumer behaviour in the increasing use of smart phones and through PayPal services have seen it remain strong. Competitors such as AOL and Yahoo have been slower to adapt to the changes. eBay’s enduring focus on the consumer and consumer needs along with their flexibility in remaining relevant through online consumer trends has seen the company remain strong and performance improve following the lows during the global financial crisis.

History of eBay

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