Today, E-bay is one of the most successful consumer-centric online auction sites of the dot-com era (Akbar & James, n.d.). Since September 1995, e-bay has used the power of the internet to create a marketplace for consumers to not only auction goods but also buy them. It has created a platform where omnichannel retailing is powering the sale of selected expensive commodities as well as everyday items at rates never seen before (Deloitte, 2014; Gonzalez, Hasker, & Sickles, 2004). E-bay was founded in 1995, in San Jose California, by Pierre Omidyar as a local marketplace for the sale of localized items (Gonzalez, Hasker, & Sickles, 2004; The Telegraph Media Group, 2011). Originally known as AuctionWeb, the e-bay site began with the listing of a broken laser pointer (The Telegraph Media Group, 2011). Soon after, AuctionWeb took over Pierre’s web page domain (www.ebay.com). By 1996, the company was large enough to require professional skills, hires its first employees (Jeffrey Skoll and Meg Whitmann), and enter into its first third-party deal with Electronic Travel Action to use SmartMarket Technology to sell air tickets and travel-related products (Bjornsson, 2001). At this stage, the vision of the company was exclusively centered on the business of connecting people around the world, not selling them stuff (commerce) (Advameg Inc., 2016). In 1997, AuctionWeb officially changed the name of its services to e-bay after receiving $6.7million from venture capital firm Benchmark Capital (The Telegraph Media Group, 2011). In the following year, the company went floated on the stock market attracting a share price of $53.5 on the first day of trading (The Telegraph Media Group, 2011). In the 2000s, the company continued to experience good tidings, purchasing IBazar and PayPal in 2002, expanding its services worldwide and with revenues more than $7.7Billion, and as they say, the rest is history (The Telegraph Media Group, 2011).
The Business Model of e-bay is built on an online person-person (P2P) trading platform on the internet, using the connective power of the World Wide Web (WWW) (Bjornsson, 2001). In this virtual platform, a passionate community of businesses and individuals brings buyers and sellers together in a unique way. Here, retailers are permitted to list the items they offer for sale, buyers free to bid on the items of their interest, and all e-bay users at any single time and place to browse through the listed items in a fully automated online-based manner (Bjornsson, 2001). The items (goods and services) are arranged by topics under which individual auction item has its category. On any given day, e-bay registers millions of items across thousands of categories for sale on local, national, as well as international markets within customized sites around the world (Bjornsson, 2001). Browsing and bidding on e-bay are free. However, sellers are charged in two ways: First is the non-refundable Insertion fee that occurs when a seller lists an item for sale. The rates for this cost depends on the seller’s opening bid for the product. Second is the Final Value fee charged on the final selling price and occurs at the end of the auction. Sometimes there is the extra fee charged for additional (special) listing options to promote the item (Bjornsson, 2001; Gonzalez, Hasker, & Sickles, 2004). When a bid exceeds the minimum price for an item, e-bay notifies both the seller and buyer, and the two conclude the transaction independently of e-bay as the binding contract of the auction is solely between the seller and the winning bidder (Bjornsson, 2001).
Through an array of services, such as online transfer of money (payment) by utilizing the services of such companies as PayPal, e-bay has enabled a global and an individualized (P2P) trading for the ever –growing internet community (Gonzalez, Hasker, & Sickles, 2004). However, in the course of its growth, e-bay has encountered several challenges –as even the best businesses do – that have dampened in several occasions the enthusiasm of the company’s prospects to rival some of the Internet high flyers of its time. Despite this, over ten years later the company still manages to deliver some of the finest results. For instance, in 2004, e-bay racked a net income of $0.78Billion from a combined Revenue of $3.3Billion (Adam, 2014). Besides, much like today's highest flyers was a stock price that reflected that enthusiasm. In 2013, these figures rose expectedly higher – Net Income $2.9Billion from $16.0Billion Revenue (Adam, 2014).
Moreover, the company continues to influence and shape consumer behavior by enabling consumers to research and shop at their convenience anytime and anywhere (Deloitte, 2014). E-bay influence the consumer behavior by providing opportunities for e-sellers to offer their products at a lower price that appeals to them (Akbar & James, n.d.; Deloitte, 2014). E-bay persuades and attracts the interested shoppers together to evaluate and compare the product value of the offered commodities. Consumer behavior defines, the criteria consumers use to select, secure and dispose of products, experiences, as well as ideas (Akbar & James, n.d). In this context, e-bay has used the principles of the 7Cs (Commerce, Context, Connection, Convenience, Control, Customization, and Community) to attract a greater portion of the online shoppers for the achievement of the same (Akbar & James, n.d.; Deloitte, 2014). E-Bay has also set-up the online consumer shopping behavior arising from the ability of the Internet to make shopping life simpler and innovative. Consequently, more and more people are conducting their business activities online because of the easiness of the transactions and the convenience of the event (Akbar & James, n.d.). E-Bay is further benefiting from several positive trends including increasing user comfort shopping online, the increasing decline of certain brick-and-mortar retailers, and continued internet connectivity.
References
Adam. (2014, March 31). The Investments Blog: eBay 10 Years Later: Business Performance vs Stock Performance [Web log post]. Retrieved from http://theinvestmentsblog.blogspot.co.ke/2014/03/ebay-10-years-later-business.html
Advameg Inc. (2016). eBay Inc. - Company Profile, Information, Business Description, History, Background Information on eBay Inc. Retrieved April 25, 2016, from http://www.referenceforbusiness.com/history2/44/eBay-Inc.html
Akbar, S., & James, P. T. (n.d.). Consumers’ attitude towards online shopping: Factors influencing employees of crazy domains to shop online. Journal of Management and Marketing Research. Retrieved from http://www.aabri.com/manuscripts/131640.pdf
Bjornsson, M. (2001). eBay's History. Retrieved April 25, 2016, from http://www.cs.brandeis.edu/~magnus/ief248a/eBay/history.html
Deloitte. (2014). The Omnichannel opportunity: Unlocking the power of the connected consumer. Retrieved from Deloitte LLP website: http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumer-business/unlocking-the-power-of-the-connected-consumer.pdf
Gonzalez, R., Hasker, K., & Sickles, R. C. (2004). An Analysis of Strategic Behavior in eBay Auctions. Retrieved from Rice University Center for the Study of Institutions and Values website: http://www.ruf.rice.edu/~rsickles/paper/auction.pdf
The Telegraph Media Group. (2011, April 15). The history of eBay: How the internet auctioneer rose to the top. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/personalfinance/8451898/The-history-of-eBay.html
