An American organisation, eBay is an online auctioning and shopping site where people and business go to buy and sell and vast array of goods, focusing on no real area at all. Today it has operations in other 30 countries worldwide.
In September 1993 Iranian computer programmer founded the site as AuctionWeb. In 1996 they made a contract with third party seller “Electronic Travel Auctioneer” to sell plane tickets. Growth skyrocketed and in January the site hosted 2 million auctions compared to 250,000 in the whole of 1996. In September 1997 they changed their name to eBay. Originally the site was to be called echobay.com, after the founders company, but this domain was already taken and so the second choice was settled on.
With funding by Benchmark Capital the site relaunched on September 21, 1998. The target price of shares was only $18 but by the first day was selling at $53.30, making the founders instant billionaires. As the site expanded to almost any item business grew quickly. With the acquisition of paypal in 2002 the site secured almost a monopoly in the online auctioning market.
The system works as a user creates an entry, stating the name, condition, category, posting costs and starting bid. The attachment of images and a “buy it now” price are optional but encouraged. A user either bids an increment above the previous bid, hoping to “win” or can pay the “buy it now” option, which is typically higher but guarantees the bidder success. Many options of payment are available, but considerably the most used is a paypal system. Paypal is an online bank account that holds, receives and dispenses funds. Though owned by eBay the site is separate, though the facilities are greatly implemented on eBay. The purchaser can transfer money from a credit or debit card into the sellers paypal account in exchange for the item, or if they have funds in one of their own paypal accounts can pay from that. This is a great system for eBay as it encourages buyers and sellers to frequently use the site. The seller is expected to send the item via the countries mail system, but this is integrated into eBay and the paypal system. The seller can print a postage label, payed for by the paypal. This also has the option to insure the item for it’s exact selling value. Along with the label a proof of posting form is printed and when given to a post office in conjunction with the package insures the buyer and seller completely if the item goes missing, though if the seller is feeling lucky he can just post it.
To further protect the buyer the seller has a feedback score, the more successful sales the seller has done the higher his score. The system is anonymous so feedback is more likely to be honest.
eBay makes it’s profit from a selection of fees, 15p-£3 per £100 for the initial listing and 75p-£100 as 0.1% of the final selling price. The rate depends on exactly what kind of object has been sold.
While eBay sell anything tangible they must also adhere to local laws, meaning in the U.K no weapons, objects specifically for bomb making, “perverse” goods or services or meta-physical objects. If an item infringing on these rules is posted eBay is obliged to remove it.
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