Essay Preview: Ebay
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The company eBay began as a small business ran in a living room and grew into one of the most popular, top earning websites on the internet. EBay is an online auction and shopping website where businesses and people can buy and sell goods and services all over the world. People have grown to trust eBay and use the website to find anything from collectables to little gadgets. “EBay has both streamlined and globalized traditional person-to-person trading, which has traditionally been conducted through such forms as garage sales, collectibles shows, flea markets and more, with their web interface” (Gomes 1). EBay is a prime example of how successful retailing on the internet can be.
History of eBay: The Beginning
The company began in the living room of Pierre Omidyar, who at the time was a 28-year-old software developer. He had previously worked with Claris Developing for Apple computers. The company began in 1995 with the use of being like an online garage sale and has made continuous growth every year since then. The original name for eBay was Echo Bay Technology. When Omidyar tried to register the domain name online echobay.com was already taken. So, he shortened the domain name to eBay.com and the website was born.
The very first item to be sold on eBay was a broken laser pointer that sold for $14.83. As soon as he contacted the winning bidder he reminded the winner that the laser pointer was broken and wanted to make that clear. The winner then told him that he collected broken lasers, and it was right then that Omidyar knew he has created something that was going to be very successful.
The first eBay employee was hired in 1996 which was Chris Agarpao, and the first president of the company was hired that same year which was Jeff Skoll who had an MBA from Stanford. Harvard Business School graduate, Meg Whitman, soon fallowed as the CEO. With a strong business team, eBay grew very rapidly and branching to every type of market. “With exponential growth and strong branding, eBay thrived, eclipsing many of the other upstart auction sites that dotted the dot-com bubble. By the time eBay had gone public in 1998, both Omidyer and Skoll were billionaires” (Hsiao 1).
Items sold on eBay
What started with a broken laser pointer, grew to millions of collectables, furniture, equipment, vehicles, appliances, and many other miscellaneous items. Some of the items are very valuable, while others are little gizmos that would have likely been thrown away. “Though the first things sold on eBay were collectables and home items, the company branched out to higher profile sellers like Disney and GM” (Mullen 2). There are 157 million registered users world wide. 82 million are international and 75 million are registered in the United States. Hence, this is why large international companies started selling their newest products and offering services on eBay.
There have been some very interesting auctions in the past that the company has encountered. For example, a human kidney was put up for auction in 1999, which is illegal in the United States. The bids for this listing went well over five million dollars before eBay intervened and pulled the listing. In 2001, a man from Seattle decided to sell his “soul” and the bidding went up to four hundred dollars before eBay could intervene again and stop the auction. The company removes any listings that are violating the terms of service agreement within a very short time of hearing about auctions from an outsider. On the other hand, the most expensive item sold on eBay to date is a private business jet for $4.9 million while miscellaneous gadgets may sell for less then a dollar.
Profit and Transactions
EBay gains profit in various different ways. Not only does eBay charge a fee to list a product on the website but also charges an additional fee when the product is sold. There are several other optional fees based on optional factors. For example, if a seller wants to add more pictures then the limit, then there is going to be an extra fee. “The U.S. —based eBay.com takes $0.20 to $80 per listing and 5.25% or less of the final price. The UK —based eBay.co.uk takes from GBP ÐЈ0.15 to a maximum rate of GBP ÐЈ3 per 100 for an ordinary listing and from 0.75% to 5.25% of the final price” (Wikipedia 4). Also, according to the U.S. law, a state cannot require sellers located outside that state to collect a sales tax, which in return makes deals sound more attractive to buyers.
The company has also acquired Paypal Inc. and it is the preferred way of making payments for eBay auctions. Paypal is growing in its popularity for other internet uses also. Paypal basically allows anyone to send and receive money via an email address. Money in the paypal account can be spent in various ways including on the internet, sending a check to the account owner, and depositing into a bank account. Paypal also offers a function where the buyer can pay with a credit card or debit card. “Another thing Internet retailers may need is a service that allows them to accept credit card for instance Papal or other merchant account