 | |
| Public | |
| Traded as | NASDAQ: EBAY NASDAQ-100 Component S&P 500 Component |
| Industry | Internet |
| Founded | September 3, 1995 (Originally as AuctionWeb) |
| Founder | Pierre Omidyar |
| Headquarters | San Jose, California, U.S. |
Key people
| |
| Services | Online shopping |
| Revenue |  US$9.567 billion (2017) |
 US$2.265 billion (2017) | |
| US$-1.016 billion (2017) | |
| Total assets | US$25.981 billion (2017) |
| Total equity | US$8.063 billion (2017) |
Number of employees
| ~14,100 (December 2017) |
| Subsidiaries | eBayClassifieds, Kijiji, iBazar, GittiGidiyor, Gumtree, G-Market, Stubhub, Half.com, Marktplaats.nl, Qoo10.jp |
| Website | www |
eBay Inc. (/ˈiːˌbeɪ/ EE-bay) is an American multinational e-commerce corporation based in San Jose, California that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in the autumn of 1995, and became a notable success story of the dot-com bubble. eBay is a multibillion-dollar business with operations in about 30 countries, as of 2011. The company manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a wide variety of goods and services worldwide. The website is free to use for buyers, but sellers are charged fees for listing items after a limited number of free listings, and again when those items are sold.
In addition to eBay's original auction-style sales, the website has evolved and expanded to include: instant "Buy It Now" shopping; shopping by Universal Product Code, ISBN, or other kind of SKU number (via Half.com, which was shut down in 2017); online classified advertisements (via Kijiji, or eBay Classifieds); online event ticket trading (via StubHub); and other services. EBay previously offered online money transfers as part of its services (via PayPal, which was a wholly owned subsidiary of eBay from 2002 to 2015).
History
eBay headquarters in San Jose, California
Early years
The AuctionWeb was founded in California on September 3, 1995, by French-born Iranian-American computer programmer Pierre Omidyar as part of a larger personal site. One of the first items sold on AuctionWeb was a broken laser pointer
for $14.83. Astonished, Omidyar contacted the winning bidder to ask if
he understood that the laser pointer was broken. In his responding
email, the buyer explained: "I'm a collector of broken laser pointers."
Reportedly, eBay was simply a side hobby for Omidyar until his
Internet service provider informed him he would need to upgrade to a
business account due to the high volume of traffic to his website. The
resulting price increase (from $30/month to $250) forced him to start
charging those who used eBay, and was not met with any animosity. It resulted in the hiring of Chris Agarpao as eBay's first additional employee to process mailed checks coming in for fees.
Pierre Omidyar, founder and chairman of eBay
Jeffrey Skoll
was hired as the first new president of the company in early 1996. In
November 1996, eBay entered into its first third-party licensing deal,
with a company called Electronic Travel Auction, to use SmartMarket
Technology to sell plane tickets and other travel products. Growth was
phenomenal; in January 1997 the site hosted 2,000,000 auctions, compared
with 250,000 during the whole of 1996.
The company officially changed the name of its service from
AuctionWeb to eBay in September 1997. Originally, the site belonged to
Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried
to register the domain name echobay.com, but found it already taken by
the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.
In 1997 the company received $6.7 million in funding from the venture capital firm Benchmark Capital.
Meg Whitman was hired by the board as eBay president and CEO in March 1998. At the time, the company had 30 employees, half a million users and revenues of $4.7 million in the United States.
The frequently repeated story that eBay was founded to help Omidyar's fiancée trade Pez candy dispensers was fabricated by a public relations manager, Mary Lou Song, in 1997 to interest the media, which were not interested in the company's previous explanation about wanting to create a "perfect market". This was revealed in Adam Cohen's book, The Perfect Store (2002), and confirmed by eBay.
After eBay went public, both Omidyar and Skoll became instant
billionaires. eBay's target share price of $18 was all but ignored as
the price went to $53.50 on the first day of trading.
Beanie Babies and eBay
The
Pez dispenser myth generated enormous amounts of publicity and led to
some of eBay's most explosive early growth among toy collectors. However
at the time, Beanie Babies (manufactured by Ty, Inc.)
were the leader in the toy category and was the most difficult brand to
find in retail stores. Beanie Babies quickly became the dominant
product on eBay accounting for 10% of all eBay listings in 1997.
While still a privately held company, eBay's growing market share was contributed by two major factors:
- The growing collectibility of Beanie Babies in the mid-1990's - collectors internationally were trying to complete their collection of Beanie Babies
- Ty producing the first business-to-consumer Web site - the original Ty Web site (created by Lina Trivedi) contained an online trading post where people could trade their Beanie Babies, however the trading post was overwhelmed with unsortable listings creating a legitimate demand for a more efficient online system to buy and trade Beanie Babies in the secondary market
As a result, eBay provided a user-friendly interface to search for specific Beanie Babies that collectors were searching for.
On September 21, 1998, eBay went public. In the risk factors section of the annual report filed with the US Securities and Exchange Commission in 1998, Omidyar notes eBay's dependence on the continued strength of the Beanie Babies market.
2000s
As the company expanded product categories beyond collectibles into almost any saleable item, business grew quickly. In 2000, eBay had 12 million registered users and a cyberinventory of more than 4.5 million items on sale on any given day. In February 2002 the company purchased iBazar, a similar European auction web site founded in 1998, and then bought PayPal on October 3, 2002.
By early 2008 the company had expanded worldwide, counting
hundreds of millions of registered users as well as 15,000 employees and
revenues of almost $7.7 billion. After nearly ten years at eBay,
Whitman decided to enter politics. On January 23, 2008, the company
announced that Whitman would step down on March 31, 2008, and John Donahoe was selected to become president and CEO.
Whitman remained on the board of directors and continued to advise
Donahoe through 2008. In late 2009 eBay completed the sale of Skype for $2.75 billion, but still owned 30% equity in the company.
2010s
In 2012 eBay was charged by the United States Department of Justice with entering into non-solicitation agreements with other technology companies involving their highly skilled employees.
On September 30, 2014, eBay announced it would spinoff PayPal
into a separate publicly traded company, a demand made nine months prior
by activist hedge fund magnate Carl Icahn. The spinoff completed on July 18, 2015. eBay’s then chief executive, John Donahoe, stepped down from that role.
On January 31, 2018, eBay announced that they would replace
PayPal as its primary payments provider with Netherlands-based start-up Adyen.
The transition was set to be completed by 2021, but PayPal would remain
an acceptable payment option on the site until further notice.
Corporate affairs
Board of directors
As of November 2014 the board of directors was as follows:
- Devin Wenig, new eBay CEO and president since 2015
- Fred D. Anderson, former managing director of Elevation Partners, director of eBay since July 2003
- Edward W. Barnholt, former president and CEO of Agilent Technologies, director of eBay since April 2005
- Scott Cook, founder of Intuit, director of eBay since June 1998
- John Donahoe, eBay’s former president and CEO since March 2008, former director of eBay since January 2008
- David Dorman, non-executive chairman of Motorola, director of eBay since June 2014
- William Clay Ford, Jr., executive chairman of Ford Motor Company, director of eBay since July 2005
- Kathleen C. Mitic, founder and CEO of Sitch Inc, director of eBay since September 2011
- David M. Moffett, former CEO of Freddie Mac, director of eBay since July 2007
- Pierre Omidyar, director and chairman of eBay, since its incorporation in May 1996
- Richard T. Schlosberg, former president and CEO of the David and Lucile Packard Foundation, director of eBay since March 2004
- Thomas J. Tierney, co-founder of the Bridgespan Group, director of eBay since March 2003
Logo
In September 2012, eBay introduced a new logo set in the Univers typeface, but using a thinner variation of it,
installed on the website on October 10, 2012. It replaced the logo with
a thicker variation of Univers which had been used since its
establishment in 1995. An all red, ebay logo with the same type set was
also introduced to be used temporarily for various holidays.
1995–2012
2012–present
Profit and transactions
eBay generates revenue by a complex system of fees for services, listing product features, and a final value fee for sales proceeds by sellers. As of November 2012, the US-based eBay.com charges $0.10
to $2, based on the opening or reserve price, as an insertion fee for a
basic auction-style listing without any adornments. The Final Value Fee
amounts to 10% of the total amount of the sale, which is the price of
the item plus shipping charges.
Fixed-price listings have an insertion fee of $0.30, and the final
value fee varies based on category and total amount of the sale (e.g,
13% for DVDs & Movies up to $50). The UK-based ebay.co.uk takes from £0.15
to a maximum rate of £3 per £100 for an ordinary listing and up to 10%
of the final price. Reduced Final Value Fees are available to business
registered customers.
Under US law, a state cannot require sellers located outside the state to collect a sales tax, making purchases more attractive to buyers. Although some state laws require resident purchasers to pay use tax on out-of-state purchases, it is not a common practice. However, sellers that operate as a business do follow state tax regulations on eBay transactions. However Value Added Tax
(VAT), the EU countries' sales tax, is different. eBay requires sellers
to include the VAT element in their listing price and not as an add-on
and thus profits by collecting fees based not only on the sale price "ex
VAT" but also on the VAT.
In a similar manner eBay also charges its Final Value Fees on all shipping charges.
The company's business strategy includes increasing international trade. eBay has already expanded to over two dozen countries, including China and India. Strategic international expansion has failed in Taiwan and Japan, where Yahoo! had a head start, and New Zealand, where Trade Me is the dominant online auction website. eBay also notably failed in China due to competition from local rival Taobao. eBay entered the Chinese market in 2002 and shut down its Chinese site in 2007. In India too, eBay's operations came to a halt after it sold off its India operations to country's largest ecommerce company Flipkart, in the latter's $1.4Bn fundraise, where eBay was a participant too.
In its Q1 2008 results, total payment volume via PayPal increased 17%, but off the eBay auction site it was up 61%.
For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as Escrow.com, PayPal, Paymate, Propay, and Skrill. Propay and Skrill were banned effective September 27, 2015, citing low usage.
Escrow.com is eBay's approved escrow
site. The transactions processed through Escrow.com largely are in
relation to eBay Motors; however, they are not restricted to this type
of listing.
eBay runs an affiliate program under the name eBay Partner Network.
eBay affiliate marketers were originally paid a percentage of the eBay
seller's transaction fees, with commissions ranging from 50% to 75% of
the fees paid for an item purchased. In October 2009, eBay changed to an
affiliate payout system that it calls Quality Click Pricing, in which
affiliates are paid an amount determined by an undisclosed algorithm.
The total earnings amount is then divided by the number of clicks the
affiliate sent to eBay and is reported as Earnings Per Click, or EPC. In
October 2013, ePN launched a new pricing model. The new model is more
transparent and is based on category-level base commission rates with
bonuses available for referring new and reactivated buyers.
On April 18, 2012 eBay reported a 29% Q1 revenue increase to $3.3
billion compared to their Q1 in 2011. Net income was reported to be at
$570 million for the quarter.
For the fiscal year 2017, eBay reported losses of US$1.016
billion, with an annual revenue of US$9.567 billion, an increase of 6.6%
over the previous fiscal cycle. eBay's shares traded at over $35 per
share, and its market capitalization was valued at over US$27.2 billion
in October 2018.
| Year | Revenue in mil. USD$ |
Net income in mil. USD$ |
Total Assets in mil. USD$ |
Price per Share in USD$ |
Employees |
|---|---|---|---|---|---|
| 2005 | 4,552 | 1,082 | 11,789 | 15.65 |
|
| 2006 | 5,970 | 1,126 | 13,494 | 13.00 |
|
| 2007 | 7,672 | 348 | 15,366 | 13.25 |
|
| 2008 | 8,541 | 1,779 | 15,592 | 9.58 |
|
| 2009 | 8,727 | 2,389 | 18,408 | 7.29 |
|
| 2010 | 9,156 | 1,801 | 22,004 | 9.68 |
|
| 2011 | 11,652 | 3,229 | 27,320 | 12.28 |
|
| 2012 | 14,072 | 2,609 | 37,074 | 16.61 |
|
| 2013 | 8,257 | 2,856 | 41,488 | 21.03 | 33,500 |
| 2014 | 8,790 | 46 | 45,132 | 21.01 | 34,600 |
| 2015 | 8,592 | 1,725 | 17,755 | 25.00 | 11,600 |
| 2016 | 8,979 | 7,266 | 23,847 | 27.08 | 12,600 |
| 2017 | 9,567 | −1,016 | 25,981 | 35.06 | 14,100 |
Environmental record
On May 8, 2008, eBay announced the opening of its newest building on the company's North Campus in San Jose, which is the first structure in the city to be built from the ground up to LEED Gold standards.
The building, the first the company had built in its 13-year existence,
uses an array of 3,248 solar panels, spanning 60,000 square feet
(5,600 m2), and providing 650 kilowatts of power to eBay's campus. The array can supply 15–18% of the company's total energy requirements, reducing the amount of greenhouse gases that would be produced to create that energy by other means. SolarCity,
the company responsible for designing the array, estimates that the
solar panels installed on eBay's campus will prevent 37 million pounds
of carbon dioxide
from being released into the environment as a result of replaced power
production over the next three decades. Creating an equivalent impact to
remove the same amount of carbon dioxide from the atmosphere would
require planting 322 acres (1.30 km2) of trees.
The design of the building also incorporates other elements to
reduce its impact on the environment. The building is equipped with a
lighting system that detects natural ambient light sources and
automatically dims artificial lighting to save 39% of the power usually
required to light an office building. eBay's newest building also
reduces demand on local water supplies by incorporating an eco-friendly
irrigation system, and low-flow shower heads and faucets. Even during
construction, more than 75% of the waste from construction was recycled.
eBay also runs buses between San Francisco and the San Jose campus to
reduce the number of commuting vehicles.
In 2014, eBay and several other Oregon businesses signed the Oregon
Business Climate Declaration to promote local job growth and slow carbon
pollution.
Acquisitions
PayPal
On October 3, 2002, PayPal became a wholly owned subsidiary of eBay. Its corporate headquarters were sited in San Jose, California,
United States at eBay's North First Street satellite office campus. On
September 30, 2014, eBay Inc. announced the divestiture of PayPal as an
independent company, which was completed on July 20, 2015.
Craigslist
In the summer of 2004, eBay acknowledged that it had acquired 25% of classified listings website Craigslist.
Former Craigslist executive Phillip Knowlton was the seller, and he
insisted that his former employer was aware of his plans to divest his
holdings. Initially, eBay assured Craigslist that they would not ask the
company to change the way it does business.
In March 2005, eBay launched the classifieds service Kijiji.
In April 2008, eBay sued Craigslist to "safeguard its four-year
financial investment", claiming that in January 2008, Craigslist took
actions that "unfairly diluted eBay's economic interest by more than
10%."
Craigslist counter-sued in May 2008 "to remedy the substantial and
ongoing harm to fair competition" that Craigslist claimed was
constituted by eBay's actions as a Craigslist shareholder. In September 2010, Delaware Judge William Chandler ruled that the actions of Craigslist were unlawful and that the actions taken by Craigslist founders Jim Buckmaster and Craig Newmark
had "breached their fiduciary duty of loyalty", and restored eBay's
stake in the company to 28.4% from a diluted level of 24.85%.
However, the judge dismissed eBay's objection to a staggered board
provision, citing that Craigslist has the right to protect its own trade
secrets. eBay spokesman Michael Jacobson stated "We are very pleased that the court gave eBay what it sought from the lawsuit."
Skype
In October 2005, eBay Inc. acquired Skype Technologies, developer of the Skype VoIP and Instant messaging
service, significantly expanding its customer base to more than 480
million registered users worldwide. eBay later sold a majority stake in
Skype in November 2009, while retaining a minority investment in the
company. This eventually led to the sale of the entire Skype business to Microsoft for $8.5 billion in May 2011.
StubHub
StubHub's acquisition by eBay was announced in January 2007 for a reported $310 million. According to CNN Money,
2007 was a very successful year for the company, handling five million
individual transactions, more than in the previous six years combined of
its history. Staffing at StubHub had increased to 350 workers by the time of the sale. Eight months after the acquisition, StubHub reached an exclusive agreement with Major League Baseball (MLB). They get a piece of the 25% in commissions StubHub earns on either end of a sale. Ticketmaster filed a lawsuit against StubHub and eBay in 2007, alleging "intentional interference" with Ticketmaster's contractual rights.
Corrigon
In October 2016, eBay acquired Corrigon, a visual search engine, for less than $30 million.
Qoo10.jp
In April 2018, eBay acquired Qoo10.jp, a market place driven by Giosis and having the 4th GMV in Japan, for a reported $573 million.
With the close of the transaction, eBay also has relinquished its
investment in Giosis’ non-Japanese businesses. This acquisition expands
eBay’s footprint in Japan, one of the largest e-commerce markets in the
world. eBay made an initial investment in Giosis Pte. Ltd. in 2010.
Since then, Giosis has established dynamic marketplace businesses across
Asia. With today’s acquisition, eBay will build on Giosis’ progress in
Japan, enhancing the domestic customer experience and providing
approximately two million Japanese buyers currently using the Qoo10.jp
platform with a well-curated selection of merchandise sourced both
locally and from across the globe. eBay’s Japan business, including
Giosis’ Japan business, will report into Jooman Park, Senior Vice
President of eBay’s Asia Pacific region.
Use for data analysis
eBay
is a publicly visible market which has attracted an interest from
economists, who have used it to analyze aspects of buying and selling
behavior, auction formats, etc., comparing them with previous
theoretical and empirical findings.
Computer information systems researchers have also shown interest
in eBay. Michael Goul, Chairman of the Computer Information Systems
department of the W. P. Carey School of Business at Arizona State University, published an academic case based on eBay’s big data management and use in which he discusses how eBay is a data-driven company that processes 50 petabytes of data a day.
eBay uses a system that allows different departments in the
company to check out data from their data mart into sandboxes for
analysis. According to Goul, eBay has already experienced significant
business successes through its data analytics. eBay employs 5,000 data
analysts to enable data-driven decision making.
Third party
In 2006 the accounting software company Intuit launched a web-based donation tracking service called ItsDeductible. The service uses data from eBay to help users assign a market value to the items they donate.
Visual search
In
July 2017 eBay released an image search capability allowing users to
find listings on the site that match an item depicted in a photo, using
artificial intelligence and machine learning technologies.
GCHQ
UK's GCHQ has a suite of tools for monitoring target use of eBay, named ELATE.
Items
Millions of collectibles, decor, appliances, computers, furnishings, equipment, domain names,
vehicles, and other miscellaneous items are listed, bought, or sold
daily on eBay. In 2006, eBay launched its Business & Industrial
category, breaking into the industrial surplus business. Generally,
anything can be auctioned on the site as long as it is not illegal and
does not violate the eBay Prohibited and Restricted Items policy. Services and intangibles can be sold, too. Large international companies, such as IBM,
sell their newest products and offer services on eBay using competitive
auctions and fixed-priced storefronts. Separate eBay sites such as eBay
US and eBay UK allow the users to trade using the local currency.
Software developers can create applications that integrate with eBay
through the eBay API by joining the eBay Developers Program.
In June 2005, there were more than 15,000 members in the eBay
Developers Program, comprising a broad range of companies creating
software applications to support eBay buyers and sellers as well as eBay
Affiliates.
Numerous government and police agencies around the world now use eBay as well as traditional auctions to dispose of seized and confiscated goods.
Controversy has arisen over certain items put up for bid. For instance, in late 1999 a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs.
eBay North First Street satellite office campus (home to PayPal)
Beginning in August 2007, eBay required listings in "Video Games" and "Health & Beauty" to accept its payment system PayPal and sellers could only accept PayPal for payments in the category "Video Games: Consoles".
Starting January 10, 2008, eBay said sellers can only accept PayPal as
payment for the categories "Computing > Software", "Consumer
Electronics > MP3 Players", "Wholesale & Job Lots > Mobile
& Home Phones", and "Business, Office & Industrial >
Industrial Supply / MRO".
eBay announced that starting in March 2008, eBay had added to this
requirement that all sellers with fewer than 100 feedbacks must offer
PayPal and no merchant account may be used as an alternative. This is in addition to the requirement that all sellers from the United Kingdom have to offer PayPal.
Further, and as noted below, it was a requirement to offer PayPal
on all listings in Australia and the UK. In response to concerns
expressed by the Australian Competition and Consumer Commission, however, eBay has since removed the policy on the ebay.com.au website requiring sellers to offer PayPal as a payment option.
eBay Express logo
eBay Office in Toronto
On April 24, 2006, eBay opened its new eBay Express site, which was
designed to work like a standard Internet shopping site for consumers
with United States addresses.
Before it closed in 2008, selected eBay items were mirrored on eBay
Express, where buyers used a traditional digital shopping cart to
purchase from multiple sellers.
The UK version was launched to eBay members in mid-October 2006, but on
January 29, 2008, eBay announced its intention to close the site. The German version, eBay Express Germany, was also opened in 2006 and closed in 2008.
At the 2008 eBay Developer's Conference, eBay announced the Selling Manager Applications program (SM Apps). The program allows approved developers to integrate their applications directly into the eBay.com interface. The applications created by developers are available for subscription by eBay members who also subscribe to Selling Manager.
eBay maintains a number of specialty sites including the
discussion boards, groups, answer center, chat rooms, and reviews and
guides. eBay's mobile offerings include SMS alerts, a WAP site, Java ME clients, and mobile applications for Windows Phone, Android OS, and Apple iPhone.
The initiative Choice in eCommerce was founded on May 8, 2013 by several online retailers in Berlin, Germany.
The cause was, in the view of the initiative, sales bans and online
restrictions by individual manufacturers. The dealers felt cut off from
their main sales channel and thus deprived them the opportunity to use
online platforms like Amazon, eBay, or Rakuten in a competitive market for the benefit of their customers.
Unusual items
Many unusual items have been placed for sale on eBay, including at least two previously undiscovered species, including the Coelopleurus exquisitus sea urchin.
Prohibited or restricted items
In
its earliest days, eBay was nearly unregulated. However, as the site
grew, it became necessary to restrict or prohibit auctions for various
items. Note that some of the restrictions relate to eBay.com (the US
site), while other restrictions apply to specific European sites (such
as Nazi paraphernalia). Regional laws and regulations may apply to the
seller or the buyer. Generally, if the sale or ownership of an item is
regulated or prohibited by one or more states, eBay will not permit its
listing. Among the hundred or so banned or restricted categories:
- Tobacco (tobacco-related items and collectibles are accepted.)
- Alcohol (alcohol-related collectibles, including sealed containers, as well as some wine sales by licensed sellers are allowed, some sites such as ebay.com.au allow licensed liquor sales) (eBay announced September 21, 2012, it will begin removing listings for beer and liquor from its site after a story was aired on ABC series 20/20.)
- Drugs and drug paraphernalia
- Items that "promote or glorify hatred, violence, racial, sexual, or religious intolerance, or promote organizations with such views." This includes Nazi paraphernalia, although there are exceptions to this rule for Nazi items such as stamps, letters, and envelopes displaying Nazi postmarks (must comply with the currency and stamp policy)
- Historically accurate WWII military model kits that have Nazi symbols and items depicting the Confederate battle flag.
- Bootleg recordings
- Firearms and ammunition (as of January 1, 1999), including any parts that could be used to assemble a firearm as well as (as of July 30, 2007) any firearm part that is required for the firing of a gun, including bullet slugs, brass casings and shells, slides, cylinders, magazines, firing pins, trigger assemblies, etc. Various types of knives are also forbidden.
- Police and emergency service vehicular warning equipment such as red or blue lights and sirens (antique or collectible items are exempt)
- Intentionally soiled underwear and dirty used clothing
- Forged, illegal, stolen, or confidential documents, which include passports, Social Security cards, drivers licenses, voter registration cards, birth certificates, school documents, medical records, financial information, government license plates, or government classified information documents. Any item that is used to modify documents is also restricted.
- Human body parts, organs, and remains (with an exception for skeletons and skulls for scientific study, provided they are not Native American in origin)
- Live animals (with certain exceptions)
- Certain copyrighted works or trademarked items
- Lottery tickets, sweepstakes tickets, or any other gambling items.
- Military hardware such as working weapons or explosives with the exception of demilitarized vehicles.
- Any object of Iranian, Cuban, or North Korean origin.
- Enriched uranium, plutonium, and other fissile material.
- Certain categories of sexually oriented material, which must be listed in the "Adult Only" category, notwithstanding certain items prohibited:
- Child pornography
- Materials deemed obscene, including bestiality, necrophilia, rape, coprophilia, and incest
- Used sex toys
- Services including any sexual activity
- Links to sites that contain prohibited items
- Adult products that are delivered digitally
- Virtual items from massively multiplayer online games, restrictions that vary by country
- Ivory products
- Knives, other than some cutlery, are prohibited in the UK following the criminal importation into the UK (by BBC Watchdog researchers) of several knives that were already illegal to own or import under existing UK legislation. The ban also includes empty leather knife scabbards if they are listed under the category of "knives" on one of the eBay sites
- Fortune-telling and witchcraft-related services
- Souls, ghosts, and other "items whose existence cannot be verified" are prohibited.
- Many other items are either wholly prohibited or restricted in some manner.
Bidding
Auction-style listings
Bidding on eBay (old or new)'s auction-style listing is called proxy bidding and is essentially equivalent to a Vickrey auction (sealed-bid), with the following exceptions.
- The winning bidder pays the second-highest bid plus one bid increment amount (that is, some small predefined amount relative to the bid size), instead of simply the highest bid. However, since the bid increment amounts are relatively insignificant compared to the bid size, they are not considered from a strategic standpoint.
- The highest bidder's bid is sealed, as in a Vickrey auction, but the current winning bid (second highest plus one increment) is displayed throughout the auction to allow price discovery.
- Because eBay's auction-style listings are sealed-bid, it is usually to all bidders' advantage that bids are made only at the very end of the auction (except for an initial minimum bid, that cancels out a "Buy It Now" option, or prevents the seller from ending the listing early). Early bids will usually not increase the bidder's chance of winning the auction, and will often raise the item's final price (winning bid) for the eventual winner.
- eBay also allows sellers to offer a "Buy it Now" price that will end the auction immediately. The Buy It Now price is available until someone bids on the item, or until the reserve price is met. When the Buy It Now option disappears, the auction-style listing proceeds normally.
Seller ratings
In
2008, eBay implemented a system of seller ratings with four categories.
Buyers are asked to rate the seller in each of these categories with a
score of one to five, with five being the highest rating. Unlike the
overall feedback rating, these ratings are anonymous; neither sellers
nor other users learn how individual buyers rated the seller. The
listings of sellers with a rating of 4.3 or below in any of the four
rating categories appear lower in search results. Power Sellers are
required to have scores in each category above 4.5.
In a reversal of roles, on January 24, 2010, Auctionbytes.com
held an open survey in which sellers could rate eBay, as well as
competing auction and marketplace sites.
In the survey, users were asked to rank 15 sites based on five
criteria: profitability, customer service, communication, ease of use,
and recommendation.
eBay was ranked 13th, after other large sites such as Amazon and Craigslist, as well as lesser-known selling sites such as Atomic Mall, eCRATER, and Ruby Lane.
In individual category rankings, eBay was rated the worst of all the 15
sites on customer service and communication, and average on ease of
use. Some respondents stated they would have given eBay a rating of 10,
three to five years ago. eBay was rated twelfth out of fifteen in the
Recommended Selling Venue category.
Charity auctions
Using MissionFish as an arbiter, eBay allows sellers to donate a portion of their auction proceeds to a charity of the seller's choice. The program is called eBay Giving Works in the US, and eBay for Charity in the UK. eBay provides a partial refund of seller fees for items sold through charity auctions.
As of March 4, 2010, $154 million has been raised for US nonprofits by
the eBay Community since eBay Giving Works began in 2003.
Some high-profile charity auctions have been advertised on the eBay home page. As of June 2010, the highest successful bid on a single item for charity was for the annual "Power Lunch" with investor Warren Buffett at the famous Smith & Wollensky Steakhouse in New York. The winning bid was $2.63 million with all of the proceeds going to the Glide Foundation.
The winning bidder was not made public, but was able to bring up to
seven friends to the lunch. In 2012, a higher bid, of $3.46 million,
also going to the Glide Foundation, won a lunch with Buffet.
In 2016 an anonymous bidder won a $3.45 million lunch with Warren
Buffett and the money raised from the auction was given to Glide
Foundation.
The previous highest successful bid on a single item for charity was for a letter sent to Mark P. Mays, CEO of Clear Channel (parent company of Premiere Radio Networks the production company that produces The Rush Limbaugh Show and Glenn Beck Program) by Senator Harry Reid and forty other Democratic senators, complaining about comments made by conservative talk show host Rush Limbaugh.
The winning bid was $2,100,100, with all of the proceeds going to the
Marine Corps-Law Enforcement Foundation, benefiting the education of
children of men and women who have died serving in the armed forces. The
winning bid was matched by Limbaugh in his largest charity donation to
date.
In 2007; eBay Canada partnered with Montreal-based digital branding agency CloudRaker
to develop a campaign to raise money for Sainte-Justine children's
hospital in Montreal. They aligned themselves with Internet phenomenon Têtes à claques
to create an eBay auction based on popular T-A-C character Uncle Tom,
an infomercial host who pitches absurd products. eBay and CloudRaker
reproduced Uncle Tom's imaginary products, The Body Toner Fly Swatter,
The Willi Waller Potato Peeler, and the LCD Shovel and sold them online.
In six weeks, they raised $15,000 for Hôpital St-Justine with one fly
swatter, one potato peeler, and one shovel, a world record. The Body
Toner Fly Swatter sold for $8,600, the Willi Waller Potato Peeler sold
for $3,550, and the LCD Shovel sold for $2,146.21.
Shipping
During auction setup, eBay provides shipping-method choices to sellers: ordinary mail, express mail,
and/or courier service. The seller may choose to offer only one
shipping method to buyers; or the seller may offer buyers a choice of
options.
Very-low-value items shipped directly from China are sometimes shipped by surface mail (sea mail), which is inexpensive but takes one to two months. If the buyer is in a hurry, he or she might be able to pay an extra fee to upgrade to second-class Surface Air Lifted shipping or to first-class airmail shipping.
Since 2012, eBay has been enlisting sellers into its "Global
Shipping Program". If a seller uses the program, non-domestic buyers pay
a fee to Pitney Bowes.
The seller sends the item to a Pitney Bowes facility in the US (or UK),
which then forwards it to the buyer, taking care of all international
shipping requirements. The program is claimed to enhance the product
selection available to international buyers.
Controversy and criticism
Common eBay criticisms involve the policy of requiring the use of PayPal for payments and concerns over fraud, forgeries and intellectual property violations in auction items. There are also issues of how negative feedback after an auction can offset the benefits of using eBay as a trading platform. eBay has been criticized for not paying UK taxes: the Sunday Times reported in October 2012 that eBay paid only £1.2m in tax on sales of over £800m.
2014 security breach
On
May 21, 2014 the company revealed that the consumer database of
usernames, passwords, phone numbers, and physical addresses had been
breached between late February and early March. Users were advised to
change their passwords; to expedite this, a "change password" feature
was added to profiles of users who had not yet done so. The Syrian Electronic Army
took responsibility for the attack. The SEA said that even though the
hack revealed millions of users' banking details to them, they would not
misuse the data. They had replaced the front pages of the websites with
their own logo, called "Defacing" in technical terms. The hack caused eBay's share price to crash in intra-day trade as a result of the breach of security.
