Week 2 Assignment: eBay

eBusiness of eBay

What is often thought of as a past-time and hobby has turned out to be a lucrative and personally satisfying business over the years. One main ingredient that many eBay PowerSellers and store owners claim to possess is their passion to manage their own business and the thirst for freedom. However, it wasn’t necessary the case for the eBay founder. Pierre just wanted to sell his broken laser pointer.

EBay started as a nights-and-weekend project of Pierre Omidyar, an Iranian French American. On September 3rd,1995, the computer engineer sat down and wrote the code for an online auction website. He called it AuctionWeb at first, but later changed it to eBay 2 years later to reflect his consulting firm, EchoBay. He wanted to use echobay.com but the domain name was already taken up. The first item that listed was Omidyar’s broken laser pointer. It sold for around $14. (Data discrepancies from Reader’s Digest (14.94) and Wikipedia(13.83)) Before the deal was completed, Omidyar confirmed that the buyer know it was broken. The buyer did, and it turns out that he collected broken laser pointers. I guess this one story already sums up the success of eBay-one man’s food is another’s poison.

The auction house was generating so many hits that Omidyar’s internet service provider increased his monthly subscription from $30 to $250. He then started charging a “final value fee” to cover internet service provider costs. By 1996, the website was already profitable and Omidyar realized he needed help. He quit his full-time job and invited Jeff Skoll to be a partner. In September 1998, 3 years after eBay was created, the company successfully launched a public offering, making Omidyar and Skoll billionaires. Skoll soon left the company and is now known for his generous sponsorship of movies such as Syriana.

Now, eBay has hugely influence the way business is done around the world. No longer is it enough to monopolize your local market. And no longer is it costly to set up your own business and your storefront. EBay is truly the obvious example of a global market.

How eBay has changed the business and economy of Asians
EBay is definitely a good and stable source of income for many. In July 2006, ACNielsen released an eBay-commissioned global research stating that nearly 4,400 Singaporeans earn a living solely from selling on the International eBay website while nearly 10,000 others sell on eBay to supplement their incomes. In Hong Kong, some 12,000 individuals depend on eBay as their primary source of income and another 15,600 sell on a part-time basis. 1 in 10 was also considering leaving their professional jobs to sell full-time.

One individual in Hong Kong, Hades has already quit to run his eBay store which sold gemstones and other jewelry. His reasons were it was simply “too much to handle”. He explained that he has to attend to customers’ enquiries, spend some time sourcing new products and take pictures of them to list, and also do his own accounting and invoicing, as well as any fault handling. These, were enough reasons for him to concentrate full-time on his business. He now earns about US 2,574 (SGD 3,959.20) a month as compared to US 190.05 (SGD 292.29 using an exchange rate of 1.54) when he first started out. (ZDNet Asia) Shocking as the numbers can be, it is true that money can be earned on eBay and a business can be built on the Internet.

Another example of a Thailand PowerSeller on eBay, Shiana.com, made her fortune selling silver beads made by the Karen hill tribe. Every week, she treks her way into the remote hills in the north and brings back new silver creations to Bangkok. Unlike other wholesale dealers, Shiana offers fair prices to these silversmiths and does not slash their prices horrendously. The reason is because an international market like eBay enables Shiana to sell more at greater profits in a shorter time, compared to wholesalers selling merely to locals and/or tourists to Bangkok. EBay.com allows Shiana to reach out to the customers around the world at almost the same time. This has allowed Shiana to achieve the status of an international brand well-known for “Silver Beads from the Karen Hill Tribe in Thailand”, just like “Toyota economical family cars from Japan” or “Nike basketball shoes from U.S.A.”.

Recognizing the eBay as a hugely popular trading platform for Asians especially in Singapore, the American company has made efforts to buff up eBay.com.sg on the website design to include more technical support, reports People’s Daily Online, such as installing Live Help chat system, putting up a Seller Starter Kit to download for free, and creating programs to educate on setting up eBay stores. EBay.com.sg reportedly has already 3,000 people owning an eBay store and a quarter of these people are planning to quit their day jobs to sell full-time!

So what are you waiting for?



Bibliography

1) People’s Daily Online (2 July, 2006). “eBay expects flourishing business in Singapore”. Retrieved January 26, 2007 from http://english.peopledaily.com.cn/200607/02/eng20060702_279241.html

2) ZDNet India (11 September, 2006) “Web sees growing breed of shopkeepers”. Retrieved January 26, 2007 from http://www.zdnetindia.com/insight/communication/stories/153653.html

3) eBay (25 January 2007) In Wikipedia, The Free Encyclopedia. Retrieved January 26, 2007 from http://en.wikipedia.org/wiki/Ebay

4) Pierre Omidyar (19 January 2007) In Wikipedia, The Free Encyclopedia. Retriever January 26, 2007 from http://en.wikipedia.org/wiki/Pierre_Omidyar

5) Plouffe, Jim. (July 2006) “Perils of an eBay Addict” Reader’s Digest. pp. 108-112