From the luxurious to the ridiculous, eBay boasts a stunning array of products. In 2006, it sold a $168 million superyacht at auction. A piece of the Zagami Martian meteorite found in Katsina also sold for $450,000 on eBay. These are just two items from an impressive list of high-ticket sales. With $10.80 billion in Q1–Q3 earnings this year, eBay is the 6th largest e-commerce brand globally. It is also the world’s largest and most successful online auction marketplace.
Founded in San Jose, California, in 1995, eBay is known for its distinctive online auction feature, alongside its “buy it now” shopping option. Despite the dotcom crash, eBay was a success, recording over $7.2 million worth of sales within its first two years. It quickly became one of the Internet’s early successes, attracting an enthusiastic core of buyers and sellers of collectibles, antiques, and used merchandise of all kinds.
About eBay
eBay is an e-commerce platform that provides a marketplace for buyers and sellers, simplifying online trading. With eBay, you can sell (almost) anything, either by auction, the “buy it now” option, or both. Sellers pay very low insertion fees to list their products, with extra fees for special listings. When an item is sold, eBay receives 1.25%–5% of the sale value, and the parties complete the trade.
To succeed, eBay had to inspire trust in auctions and trade between strangers who had no other means of knowing how reliable a potential trading partner was. In 1996, eBay founder Pierre Omidyar designed a system to do this. It relies on feedback, reviews, and ratings for users, along with an active community that blacklists fraudulent and unreliable buyers and sellers.
PayPal, an online payment system, was integrated to facilitate easy and secure payment. Buyer Protection was also provided to allay buyers’ fears of being defrauded. Over the years, these innovations have combined to generate a high level of trust and customer loyalty in the brand. Although some try—and sometimes succeed—in gaming the system, it has proven effective and is now used on many e-commerce platforms.
Features
Auction/”Buy It Now”
eBay dominates the online auction market, with a plethora of items catering to various needs and tastes. Sellers can list items at a minimum price and let buyers bid, ensuring they get the fair market price. Numerous listings and competitive bidding also make shopping on eBay fun. Sellers who prefer fixed-price listings and buyers who want to buy immediately can also use the “buy it now” option.
eBay is free for buyers, but sellers have to pay low insertion and final value fees on items sold. Insertion fees are non-refundable, ranging from 30¢ (₦115) to $3.30 (₦1,260), and final value fees are between 1.25% and 5% of the sale price. Additional listing options, such as bold or highlighted listings, also attract a fee.
In auction-style listings, sellers name a starting price and buyers bid against each other. A seller can also set a reserve price on the item. If the reserve price is unmet, the item remains unsold. Buyers can use eBay’s automatic bidding feature to stay on top of multiple auctions.
A seller can also offer an item on auction with a “buy it now” option. In this case, the “buy it now” price must be at least 40% higher than the auction price and remains available until someone places a bid on the item.
Feedback
eBay owes its success to the trust its customers have in the brand and its feedback system. Buyers can give sellers a positive, negative, or neutral rating. Sellers can screen out or report low-rated or fraudulent buyers. eBay also removes feedback that is abusive, malicious, or has been left by an unreliable buyer.
While sellers often attract suspicion, a fair amount of online fraud is committed by buyers. Since new buyers with low ratings commit the most fraud, some sellers only trade with buyers above a certain rating. The feedback system thus helps sellers choose buyers with a rating they are comfortable trading with.
Sellers can also add buyer requirements to listings, request immediate payment, and report unpaid items, feedback extortion, or other problems with a buyer. They can also block buyers who have unpaid items or policy violations. These options help them screen out unwanted buyers.
Buyer Protection
eBay Buyer Protection covers items that arrive very late, are incomplete, damaged, counterfeit, or otherwise not as described. When disputes arise between buyers and sellers and a seller fails to adequately resolve them, eBay will intervene.
Buyers are eligible for a Buyer Protection claim when they purchase an item not excluded from protection on the eBay site, via the checkout process, within the 45 days preceding the claim, and have a good-faith dispute with the seller.
Upon filing a successful claim, buyers are issued a refund from eBay for the full purchase price and shipping, required to return the unsatisfactory item to the seller, and absolved of any further connection with the transaction or obligation to the seller.
Where a buyer takes timely delivery of an item that is substantially the same as other products of the same make/model, eBay will not refund him simply because he is dissatisfied with it. A cheap or poor-quality product is unlikely to be refunded even if it breaks within the first 45 days of use. Used items are also rarely refunded for breakage.
Money-Back Guarantee
eBay’s Money Back Guarantee protects buyers if the item(s) ordered don’t arrive, are faulty or damaged, or don’t match the listing by refunding the full price. A buyer can enjoy the Money Back Guarantee when they make their purchase on eBay.com via checkout in a single payment.
For the Money Back Guarantee to apply, buyers must return the item in the condition it was received. Items returned must be in the same condition as received, and all packaging, accessories, certificates, manuals, warranty cards, “freebies” or bonus items, and all items included must be returned.
Vehicles, real estate, websites, and businesses for sale, classified ads, and services are not covered. Items sold by Sotheby’s, a third-party auctioneer and broker, and some business equipment categories are also excluded.
eBay Security Center
The eBay Security Center provides resources on how to be aware of, detect, protect oneself from, and report fraud. It features information on protecting a user’s account information, privacy, devices, and wireless network.
Guides on recognizing fake emails, fake web pages, and scams are included. The “Report a Concern” section allows users to contact customer service, report fake emails, suspected hacks, and similar problems.
The Center also conducts online tutorials on detecting and reporting spam and phishing emails. Under the Law Enforcement Resources section, buyers can report fraud or stolen goods to the police.
The eBay website minimizes fraud by tracking external links clicked. When a user leaves eBay by clicking a link or transacts using PayPal, the system warns of potential fraud.
Online Payment Options
eBay offers various online payment options to ensure ease of payment for buyers and sellers. To provide maximum protection, only payment methods offered at eBay’s checkout are allowed. PayPal, PayPal Credit, Apple Pay, Google Pay, and credit and debit cards are the approved online payment methods.
Direct contact information, including details of alternative payment options, can only be exchanged after eBay checkout is complete. For some approved categories, payment options like bank-to-bank transfers, checks, money orders, and online services such as Escrow.com and Allpay.net are allowed. However, not all payment methods are eligible for coverage under eBay’s Money Back Guarantee.
eBay Authenticate
Authenticate is a free authentication program for eBay items. High-end luxury items, notably watches and sneakers, which are often counterfeited, are verified by eBay’s experts. Authenticated items are marked by a blue tick.
When an authenticated item is listed, it is shipped to a site where eBay’s professionals examine and verify it. Authenticators check it against the listing description, process a multi-point inspection, then ship it with a unique authentication card or tag.
When an authenticated item is returned, the same verification process occurs, ensuring that both buyers and sellers are equally protected from foul play. Buyers can also report fake items and send any extra information they have. eBay investigates the reports and deletes listings for counterfeit goods.
Partnership with PayPal
PayPal is a fast and reliable global e-payment system. It is a payment processor for online vendors, auction sites, and other users, with value-added services like fraud detection and buyer protection. In 2002, eBay made PayPal its subsidiary and primary payments partner, raising public trust in its marketplace.
In July 2015, eBay and PayPal split into two separate companies, and eBay announced its plan to launch a new intermediated payments model. They signed a five-year agreement for PayPal to remain its primary payments partner while it transitioned to the new payment system.
In 2018, eBay announced that users would continue to have the option of using PayPal alongside the new system until July 2023. eBay’s main reason for moving away from PayPal was to improve its user experience.
eBay Managed Payments
E-commerce is getting more competitive, with users expecting to shop and checkout on the same site. eBay is moving from PayPal to Adyen to improve its user experience by intermediating payments on its marketplace.
With 150 supported currencies and over 200 methods of payment, Adyen makes payment flexible and accessible to more users. With managed payments, shopping and payment will take place on eBay’s website.
Sellers can expect lower payment processing costs, a simplified pricing structure, and more predictable access to their funds. Payouts will also be automatically sent to their checking accounts.
eBay will add a dashboard where all seller information will be tracked and made available. More payment options will attract buyers and improve conversion. eBay will manage the entire checkout experience to ensure users enjoy a more streamlined process.
By 2021, eBay will manage payments for most of its marketplace sellers and eventually require all sellers to use its managed payments.
Conclusion
Creating trust and confidence in the brand is the primary challenge for e-commerce businesses. Concerns about confidentiality, privacy, and safety often make potential customers shy away. E-commerce businesses must create user-friendly, easy-to-use, and secure platforms where first-time buyers can shop confidently, knowing they are getting value for their money.
