In 1995, to help his girlfriend buy and sell PEZ dispensers, Pierre Omidyar created eBay.com in his San Jose living room. Since then, guided by the vision of former president and CEO Meg Whitman, eBay has become a true cultural phenomenon, by far the largest person-to-person trading community on the Internet.
Using an auction format, sellers list items and buyers bid on them. Each eBay item has its own auction; buyers can choose the price they are willing to pay by bidding on the item or they can purchase those items listed as “Buy It Now.” It’s the equivalent of an online gargage sale, yard sale, flea market or estate auction, presented through a business model that fulfills eBay’s vision of connecting people. On any given day, 113 million concurrent listings are available through auction-style and fixed-priced events, representing the activity of 86.3 milliion active members worldwide.
eBay generates revenue with:
* seller listing fees
* charges for additional listing options and enhancements like bold type
* customization options ( colors, borders, and other highlight features) for auction presentations
* Sales fees, generally ranging between 1,25 and 5 percent of the closing auction price.
eBay has become the largest site on the Internet for buying and selling used cars, motorcycles, and auto parts. Making money with eBay is very easy to do. To make serious money, you need to find ways to “scale” and automate parts of the sales and fulfillment process. Examples include taking one product photo and using it over and over; or cutting a deal with the manufacturer or supplier to “drop ship” the orders on your behalf eliminating all of the time constraints of fullfillment on your end.
Many successful eBay businesses today practice reverse e-commerce as well as the drop-shipping business model. You find a company that will supply and drop ship high-quality, name-brand products that you sell first, then order from the supplier. These companies offer thousands of products they can drop ship to eBay buyers. Most suppliers do not require you to pay the wholesale cost of the item until a sale is made.