eBay: The Market for Everything

Ebay online Shopping

eBay is an e-commerce company that provides consumer-to-consumer and business-to-consumer sales through the internet. Its creation had quite the amusing rumor behind it. According to the rumor, eBay’s founder and Chairman Pierre Omidyar created the site to help his girlfriend sell her Pez candy dispensers. This, of course, is not true.

It was made clear that there is a market for obscure items and collectibles and its size when one of the first sales in the site was for a broken laser pointer. Omidyar emailed the buyer of the laser pointer to clarify that the laser pointer did not work, and was told “I know. I collect broken laser pointers”.

The Right Service at the Right Time

eBay came at an impeccable time when it did. It came just as when technology has advanced to a point that a global market was possible. It brought along an age when sellers have to spend money to either build or rent out a place to sell their products became almost optional.

Even after twenty years eBay has proven that if it exists then it is probably for sale on eBay (Except for guns, ivory and Nazi stuff of course).

Growth

eBay saw growth by both organic means and through acquisitions. It has since bought companies like, Skype which was later sold to Microsoft and StubHub. But the most prominent acquisition eBay made was PayPal in 2002 which was purchased for $1.5 billion.

Sure enough, that eBay and PayPal aren’t the only ones to offer the services they have, but to people, eBay seen as the definitive consumer goods market and PayPal seen as the definitive method of payment. Neither have any serious competitors which make it seem that the two are a monopoly.

Generating Revenue

Part of the revenue generated by the company is through eBay’s listing fees. Sellers pay a 10 percent listing fee when one of their items get sold on the site. In 2014 it is reported that the company’s revenue amounted to $17.9 billion.

Another part of the revenue generated by the company is through advertising. Yearly, eBay sells $2.8 billion worth of advertising.

Ever since 2011, eBay’s international revenue has exceeded that of its domestic revenue. In 2014, the company generated $8.5 billion in the United States while generating $9.4 billion abroad.

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