Sunday, May 24, 2009



eBay is basically an online auction website founded as auction Web in San Jose California, 1995 by computer programmer Pierre Omidyar. eBay actually began when Omidyar was trying to sell his girl friend’s unwanted stuff for that he created a website to sell it online. She is now his wife. The very first item sold on eBay was broken laser printer for $ 14.83. Omidyar became astonished and contacted the bidding winner to make sure that the buyer knew that the laser printer is broken. Omidyar got buyer response in explanation “I am the collector of broken laser printer.” The company officially changed the name of its service from auction Web to eBay in 1997. While working in Silicon Valley mobile communication company as software engineer Omidyar developed Auction Web, an online auction platform. He was interested in the potential for an auction format to create a fair and open market place, where the market truly sets an item value. In an auction, anyone can bid until the price reaches the highest amount someone’s willing to pay. The market price changes from day to day, depending on demand and who’s bidding.

Strategy and success

eBay has been vigilant about its pay pal buyer and seller protection against fraud. One of their core marketing strategies today is that they refund full amount to merchandize who sell and buy on ebay using pay pal, the e bay online payment service.

eBay’s success so far

eBay began as a small site for individuals to trade, but now they continue to grow; and have expanded to 32 countries, selling millions of items in thousands of categories. Two of eBay’s fastest-growing categories are car and real state. The company acquired Pay Pal in 2002. E bay revenue was $8.46 billion and net income was $348 billion in 2008.

Positive and negative aspects

E-bay has been facing an issue that they should treated all its buyer and seller equally. It is believed that E bay is offering discount just to its biggest sellers. According to e bay’s new strategy only the mass sellers are allowed to negotiate low fees. 5 to 15 percent discounts are offered mass sellers, known as Power Sellers. Another widely criticized tactic of e bay has been that of, through feedback system sellers leaving negative comments about buyer are banned. This strategy has affected sellers worldwide. Sellers believe that this would leave them rather unprotected. In February 1996 founder of e bay Pierre Omidyar said that “by creating an open market that encourages honest dealings, I hope to make it easier to conduct business with strangers over the net…” Concerns have been voiced by critics regarding eBay no longer allowing buyer’s negative feedback by taking away sellers right to complain about a problem buyer will have very little recourse for actions when a sale goes wrong. BBC NEWS, Tuesday, 5th February 2008, 17:20 GMT
E bay claims that it will personally handle complaints from seller about problem related to buyers which appears to be a massive undertaking for the company.

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