eBay History
For those who are unclear eBay is an online auction site where listing and selling fees are collected from users under the guidance and oversight of straight regulation to provide both protection and ease of use to would-be buyers and sellers alike. A modern example of auctioneering using the latest technologies and capabilities in as simple to utilize a manner as is possible its’ name has become synonymous with online auctions and sells.
It all started back in September of 1995 or depending on whom you speak to possibly even as early as May of 1994 but it could have been even earlier that the concept first came to Pierre Omidyar, who was living in San Jose and ran a consulting firm called “Echo Bay Technology” at the time. Like most technically aware people he was familiar with the burgeoning internet phenomena, and had most likely known about and used it even back when it was little more then text message boards used to keep scientists in touch with one another via daily ‘data dumps’ to various Unix servers around the country.
With the recent advent of the World Wide Web’s “Internet” as mass public data system via the browser, however an old thought came to fruition. Who knows for certain how it first came up, but I’m sure it was something like this: While cleaning a room out of unused materials, or after seeking all over town for a part to fix a very nice but now outdated piece of equipment the thought that “There are probably thousands of people out there who want / have these in their garage and are just throwing them out because we don’t have a way to connect.”
In truth many message and swap boards were already in existence when Pierre came up with the concept of eBay – there even were other Auction sites already out there shaking up the digital world, but few of them were aimed at allowing the public to sell excess goods and services directly. It was this that prompted Omidyar to start his own auction site, specializing in being a marketplace for individuals rather then overstocked items and small businesses.
Bringing online Jeff Skoll Pierre began what has now become one of the largest online auction sites in the history of the internet, and without doubt the most successful. In today’s internet jargon ‘eBay’ is synonymous with auction … but this was not always so- as with all things new a certain amount of trial and error and growth occurred before eBay hit its stride. It really started as just an online garage sale, marketing items from their stock all lumped into categories under the somewhat boring name of “Echo Bay Technology”... when they tried to register this domain name however Omidyar discovered that it was already in use and was forced to use a derivative of the name which they decided to shorten to just ‘ebay.com’ for their website.
Things were not an immediate or clear cut success, in fact it wasn’t until 1998 that Harvard graduate and business student Meg Whitman joined and took the company public that the true growth and profitability of eBay began. Perhaps one of the hardest aspects of an online auction was the fact that like a garage sale, buyers and sellers were not assured that they could trust each other, but unlike a real-life transaction where the goods and payment could be inspected up front online auctions demanded trust.
This trust was earned over time in a manner which few if any other companies have before or sense been able to match. Besides placing rules and overseeing their growing community the eBay staff took personal interest and accountability in every aspect of the business. For instance a crash in April of 1999 that took the company down for 24 hours could have been ignored as simply the cost of doing business online, but the 400 employees of eBay at that time spent the next day calling every affected seller and explaining and apologizing for the downtime and any inconvenience.
This type of personal interaction was unheard of even at that time much less from a newly public company that was now considered by most to be at the peak of its success! This type of attention to their community and keeping interactions personal and rewarding went a long way to cementing eBay as ‘the’ online auction site.
Most histories of eBay concentrate on the public offering in September of 1998 and the subsequent purchase of Butterfield and Butterfield for 260 Million as the day eBay ‘came of age’ but in reality eBay was different and destined to success long before it went public. eBay, unlike any other online auction site before it was dedicated to ensuring successful transactions were morally based while still not limiting sales to known quantities – for instance ground breaking events such as the auctioning of a human kidney in the summer of 1999 being pulled despite bidding having reached the five million dollar point showed that this was a company that was not just in it for the money.
Of course sales like the July 2000 baseball card which went for one and half million (the highest auction for eBay at that point in time) showed that money was there for the taking as well!
Another point eBay took upon itself was to police the goods being sold for copyright infringement. In 2001 eBay extended its’ self imposed bans on certain goods to include any item of a criminal nature such as crime scene memorabilia or seats at executions. Along the way eBay continued to grow … besides the historic buyout of Butterfield and Butterfield eBay had also collected “Half.com” in 2000 and had fully integrated it into their system by 2001 and in October of 2002 the purchase of a new online payment system called “Paypal Inc.” opened the way for anyone with an email address and a credit card to shop online. The floodgates were truly opened at this point and people who had never considered risking a transaction online flocked to see what ‘must have’ deals could be found on eBay, and they were not disappointed!
Despite early sales concentrating mostly around collectables and hard-to-find items the rapid success and growth of eBay as well as the incorporation of the half.com crowd, which was more a discount online selling center then an auction house, had made eBay “the” place to go to find almost anything you wanted. From things as straight-forward as nails and overstocked plumbing hardware to as exotic as the right to a family holiday or the purchase of a town anything you can imagine would show up on eBay sooner or later – and with the advanced search and watch features that had been developed it was easy to be notified when it was time to bid!
Over the years eBay has changed a lot, adding features and responding to market demand while enhancing their profitability without overtly harming their business partners or buyers with hidden or expensive fees. Originally seller fees were the principle revenue generator, and with the final value fees that were introduced in February of 1996 (called listing fees) where users paid 5% of the sale price up to $25 and 2.5% after that it was much cheaper then running an ad in the local paper or having your items sold through a traditional auction company, especially considering the exposure you could receive in an online venue like eBay compared to a local paper!
The next revenue enhancement attempt showed eBay’s commitment to its customers when the insertion fees that were presented in May of 1996 of $1.00 a listing met with displeasure since low-cost items would now not be worth listing. The price point only lasted ten days before the policy change of ten cents and up on a sliding scale. This and other such interactions led to the creation of a policy called the “voice of the customer” in 1999, in which customers were invited to discuss and help change eBay to better meet the needs of the community.
In the years since its inception eBay has created what is now known as the premiere community of person to person trading on the Internet. Sell items are listed in categories but search capabilities can seek keywords either in titles or the description text throughout the system, payment methods are varied and the incorporation of PayPal Inc. into eBay has allowed anyone with a credit card to purchase, as well as supplied eBay a dedicated resource to use with sellers to help confirm their availability and trustworthiness.
The types of sales that used to be only available at flea markets and garage sales now can be found everyday twenty-four hours a day at any convenient computer terminal with World Wide Web access and a browser. eBay succeeded at recreating the wheel and while many others have come before and probably will come afterwards even if eBay is someday outshined it will always be remembered as the first system to truly ‘get it right’ when it came to online personal sales in an auction format.
The accumulation of employees and just who those people are and how dedicated they are to the company is what makes or breaks most startup companies, so let’s loot at eBay in that light for a moment. In early 1997 there were less then ten (10) employees servicing over ten to fifteen thousand registered users. It wasn’t until late 1997 that the current eBay logo was generated and this year also showed the ongoing evolution of the web site as logo’s and graphics were introduced making the site much more pleasing to the eye. 1997 showed remarkable growth and change for eBay, and by the end of that year milestones that had been unanticipated had been reached and surpassed.
Now sporting over forty-four employees, with more then a million hits and a million items sold to over three-hundred-thousand registered users eBay had come into its own. With over three-hundred-seventy-one separate categories eBay was now ‘the’ place to work as well as the place to buy and sell! It was about this time that Meg Whitman was hired as the CEO. During the subsequent IPO in 1998 eBay began to get its’ first nationwide recognition from the press which resulted in an explosive growth of the company to more then 2.1 million registered users and one-hundred-thirty-eight (138) employees.
Starting in September of 1998 when eBay announced it’s IPO to resounding success it has shown remarkable ability to adapt and thrive. From purchasing the 134 year old auction house of Butterfield & Butterfield in 1999 to pioneering the concept of self-regulating against the sales of human body parts and criminal materials eBay has led the way on a variety of fronts, a policy which is enhanced in late 2000 to include copyright infringement protection in conjunction with music and software industry executives.
Sometimes things have slipped through this self regulation, such as Adam Burtle’s selling of his soul for four hundred dollars in February of 2001 but for the most part the policies and restriction eBay puts on its’ sellers and buyers are honestly intended and righteously enforced to help prevent fraud and immorality … a rare cause of a company showing a soul in the face of profit! It is this potential for humanity and the desire to make it rich but not at any cost that had made eBay the site it is today, and the site it will be in the future.
- Leon Edward
http://www.homebusinessit.com/sellingonebaybusiness.html
eBay Business, Selling on eBay Step by Step Online Guide
http://www.homebusinessit.com/sellingonebaybusiness.html
