eBay is the world's largest personal online trading web site that was created for people who desired a central place to buy and sell their unique items and also find others that had similar interests. eBay was founded by a gentleman named Pierre Omidyar early this decade. Pierre came up with the idea of a fully interactive trading web site from a comment that his wife had made one day. For many years Mrs. Omidyar had been collecting Pez candy dispensers, and she finally got to the point that she wanted to meet others on the internet who also collected the children's candy dispensers. With this idea from his wife Pierre ran with it and launched eBay on Labor Day 1995.
In less than four years eBay has become a bellwether of all internet stocks and the cornerstone in which most other internet auction sites have based their sites on. Since eBay's inception there have been over a hundred different auction sites that have emerged. eBay has by far the largest variety of items and number of categories for sale than any other site on the internet. In any given day there are over a half million new auctions, and a quarter of a million new items in more than 1,500 different categories which users may choose from. There are presently almost 2 million items available for bidding.
In over the 1,500 different categories the ones that generate the most business are: collectibles, antiques, sports memorabilia, computers, books, electronics, and jewelry.
In March of 1998 eBay announced that
they would be filing a pubic offering proposal to the Securities and Exchange
Commission. The proposed public offering was for 6,500,000 shares
of Common Stock. A total of 4,250,000 were sold by eBay and
2,250,000 shares were sold by selling stockholders. The leading underwriters
for eBay's initial public offering were, Goldman, Sachs &Co. and Morgan
Stanley Dean Witter. In September 1998 eBay went public at a price
of $19 per share and is currently listed on the New York Stock Exchange
under the symbol EBAY.
In just eight short months the companies stock has seen unbelievable growth
and has already had a two for one split in February 1999. The companies
stock has seen a 52 week high of 217 5/8 and a 52 week low of 8 7/16, the
first stock split occurred at around 125 and we can almost guarantee that
many splits will occur in the near future of this company.
eBay is more than just a web site that individuals can buy and sell their items of interest. The eBay community is made up of individuals who come to the site to chat and discuss other things in life except buying and selling. The eBay cafe is an excellent place to meet another person on the other side of the earth that has the same interest as you and also gain enough trust to trade with each other without the fear of someone ripping you off.
eBay has become a lifestyle for many users and there have even been people who have quit their regular day jobs in order to try and make a living buying and selling items over the internet. There have been groups of eBay regulars that get together occasionally for a picnic and discuss the opportunities that are available on the trading auction site. There is even a rumor that two people who met in the eBay cafe have even gone as far as getting married.
One of the major advantages of becoming
a regular in the eBay community is that you gain the advantage of knowing
who the most credible buyers and sellers are. The community is self
policing, and the frequent users have formed a type of "watch group" that
help look for individuals who misuse the site or take advantage of other
users. If someone is found to have committed a violation of site
etiquette they can be bumped off of the system and not allowed back on.
HOW DOES eBAY MAKE MONEY?
One of the most important questions that everybody wants to know when they are using a service on the internet is, "How much will it cost me?" The answer to this question is that it is FREE, if you are only viewing, bidding, and buying items on eBay. The only time when you will be charged a fee by eBay is if you are listing and selling a item. The two types of fees that you can be charged are, insertion fees and final value fees.
INSERTION FEES
When you decide to list an item on the eBay auction site
you are charged an initial insertion fee. These fees are based upon
which type of auction you decide to list your item under. For regular
auctions you are charged a fee based on the opening value or minimum bid
of the item you have listed for sale. For reserve price auctions
the fee depends on the reserve price that the bidder sets for the item.
For dutch auctions the insertion fee is based upon the opening value or
minimum bid of the item for sale multiplied by the number of items that
are offered.
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Along with the above insertion fees
you can add value to your sale item and increase the chances that your
item will sell at its highest possible price. You can make your title
listed in bold text so that it stands out in the listings, you can submit
your item as a "featured auction" in which your item will appear at the
top of the main listings page, or you can pay to have a "gift icon" placed
next to your sale item in which it indicates that your item makes for a
great gift idea. Here is a listing of the additional options and
their fees that are available on eBay.
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| Bold |
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| Category Featured Auction |
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| Featured Auction |
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| Gift Icon |
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| Gallery |
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| Featured Gallery |
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FINAL VALUE FEES
When the auction is over for the item
in which you are selling, you will be charged a Final Value Fee based on
the final value of your item. If you sell an item that is expensive,
you can charge up a hefty fee by selling it over this site. The only
fixed fees are if you are selling a car, truck, or RV then the seller pays
a flat rate of $25.00. If one is selling real estate then there is
no final value fee. For all other items the Final Value Fee is as
follows: 5% of the amount of the high bid up to $25.00, PLUS 2.5%
of the part of the high bid from $25.01 up to $1,000, PLUS 1.25% of the
remaining amount of the high bid that is greater than $1,000.
One of the advantages to doing business
on the eBay auction site is that there are ways in which you will not be
charged these final value fees. A seller can receive full credit
from his or hers sale if: 1) The high bidder did not respond after the
seller attempted to contact them. 2) The high bidder decided to not buy
the item. 3) The high bidder's check bounced or they put a stop on the
check. 4) The high bidder returned the item and the seller
issued a full refund. 5) The high bidder could not complete their
end of the deal due to a family emergency or financial emergency. 6)
The high bidder made claim that the terms of the agreement were unacceptable.
REGISTRATION
Anyone wishing to bid for and buy
items offered on eBay must be registered. By registering you will
obtain a password and registration name In order to comply
with the requirements, you must submit your home address and an e-mail
address. After you are approved for registration you will receive
an e-mail within 24 hours confirming your user name and password.
AUCTIONS
Now that you have a user name
and password, you are ready to bid on items ranging from $1 all the way
up to $1,000,000+. The items that are available for bidding are organized
in many different categories. Ex: sports
memorabilia,
antiques,
dolls and figures, and even jewelry
and gemstones. You can also search for specific items such as
Ricky
Williams signed memorabilia. Once you find the list of items
that you are interested in, it is very important to see how long the bidding
is open for. Each item is set with an auction time limit up to seven
days.
ITEM
SALES
Once you find an item you want to
bid on just click on the item to see all of the specifics. The information
that is provided includes the current price of the bid, the highest current
bidders e-mail, the sellers e-mail, the time left to bid on the item, what
types of payment the seller will take, how it will be shipped, and a description
of the item and sometimes pictures of the product. An important benefit
offered on most items is the feedback available from previous buyers who
have dealt with the items' seller. This feedback is important because
it gives you an idea of how reliable the seller is.
WINNING BIDS
If the auction ends on an item in which you have Won
the Bid, you will receive an Email notification that you have won bidding
on that item, the item number, your bid amount, and shipping cost.
It is now the buyers responsibility to pay the seller and sellers responsibility
to deliver the item in a timely fashion.
If you decide to become a seller on eBay it is almost as easy of a process as buying an item. There are a few more items of interest that a seller needs to consider and take into account when placing an item up for sale.
REGISTRATION
Anyone wishing to sell an item on
eBay must be registered. By registering you will obtain a password
and registration name. After you are approved for registration you
will receive an e-mail within 24 hours confirming the information that
you had submitted. It is advised that if you plan on selling numerous
items on eBay that you also register a credit card with the web site.
The company will debit your account any time that you accumulate any charges.
By using this option it will help prevent you from facing interruptions
in your business. All sellers are limited to a $10 balance if no
credit card is on file.
POSTING
YOUR ITEM
If you plan on making the most out
of your selling experience on eBay it is important that you post the items
intelligently. First, be extremely complete about your description
of the item for sale. Anticipate any questions a bidder might have.
This will save you a lot of time in the long run. Second, add pictures
of the item you are selling. Most bidders will not even consider
your item if they do not see a visual of what they will be purchasing.
Finally, provide all terms for the sale. To assure that you receive
payment from a buyer make sure you include your payment method and all
shipping terms in your listing.
CONTACT WITH BIDDERS
The first and foremost important thing
to remember as a seller is to be courteous to all bidders. If a potential
buyer e-mails you with a question regarding your item, respond promptly
and answer all questions to the best of your ability. This kind of
courtesy will be reflected in the feedback that you will receive.
When someone becomes a high bidder
it is in your best interest to review the bidders reputation. If
you see a number in parenthesis next to the bidders e-mail address, this
is the bidders feedback rating. You can click on this number and
read all of the comments that others have made about this person.
CONTACT WITH
BUYERS
This is the final stage of closing
out a sale on eBay, and sometimes the most difficult. After the auction
has ended it is the sellers and buyers responsibility to iron out all of
the details involved in buying the item. Occasionally the high bidder
will not respond to your e-mails and back out of the deal. If this
happens to you you can try to sell the item to the next highest bidder
under the original buyer.
If you as a seller are uncomfortable
with the e-mail exchanges that are taking place between you and the buyer,
it might be in your best interest to try and communicate over the phone.
It is sometimes difficult to judge another persons personality or honesty
over e-mail.
SPECIAL AUCTION SITES
Now that you have learned about the worlds largest and
most complete auction site on the web, it might be to your advantage to
check out some other auction sites that specialize in a particular field
of interest.
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