How eBay does its business

A company that has emerged unscathed from the recent dot-com bust with profits soaring to almost 400% and revenues doubling in the past one year. It has transformed auctions that were limited to garage sales and flea markets into highly evolved e-marketplaces. Selling just about anything, from antiques and jewelry to computers, automobiles and even auto insurance, it has 29.7 million registered users today.

Adopting an amazing and unique culture, where buyers and sellers of all items are allowed to post their comments online, where credit-card payment facilities are secure and easy, the company projects a trustworthy and reliable image.

Apart from bidding, certain high quality goods can be sold at prices fixed by the seller. This site also offers professional services for all kinds of business needs. A widespread global reach makes its easy for a buyer in Hong Kong to bid and buy a product from a seller in Paris while the regional sites in North America are able to offer hard-to-ship merchandise.

Person-to-person trading and a barter economy have established the company on a secure B2B and B2C platform. Other companies like Yahoo! and Excite have been quick to catch on and incorporate auctions into their sites., a site that offers airline tickets on discount has begun experimenting quite successfully with this business model.

To summarize, their business model can be elucidated thus:
  • Automation of traditional methods of selling unique items
  • Reliability in mode of payments
  • Customer friendly company
  • Professional services in addition to just plain selling of goods
  • Global reach
  • Regional diversification
  • Successful advertising