An example of an E-Commerce success and its causes

If you picked eBay, its probably because that’s what most people think about when they are considering selling something online. And for good reason! eBay is one of the most popular shopping areas on the internet with millions of registered users all over the world. In 2004, eBay had revenues of around $3.2 billion dollars. Between $7 - $8 Billion is run through eBay's platform every quarter. What was founded in 1995 as a hobby website has grown to a multi-billion dollar website. Talk about your niche markets! Every hour eBay registers 3,000 - 4,000 new users. More than 724,000 people report that eBay is their primary or secondary source of income and another 1.5 million say eBay is a supplemental source of income.

When one is thinking about starting a business, the primary rules for success are Location, Location, Location. If you are doing business on eBay, you are tapping into not only the most popular marketplace on the planet, but one that demands, and has the attention of millions of shoppers. There is no better location anywhere to sell your goods and services for incredibly reasonable rates. When you add in the convenience of PayPal, BidPay, the search tools, and the flexibility of how you can put together your auctions and business, there really is no comparable alternative that makes good business sense.

The stock performance may be all out of proportion, but the fact is, eBay has stumbled onto the next great E-commerce category: collectibles. It was founded in 1995 by Pierre Omidyar, a 31-year-old software developer who wanted to help his fiancee trade Pez dispensers online. He created a small auction site, charging just a tiny fee and commission for each listing. The risks were minimal since eBay acts only as an intermediary; the parties arrange delivery on their own. The model far exceeded Omidyar's expectations, and within a year he quit his day job. This year he hired as CEO Meg Whitman, who previously oversaw brands like Mr. Potato head and Teletubbies for Hasbro.

eBay's success is testimony to the Internet's ability to transform one person's junk--taxidermy animals or Fisher-Price toys--into another's treasure by matching sellers with a huge audience of buyers. Domenica Brockman, a Brooklyn antiques dealer, got hooked after she was able to sell an obscure Depression-era green-glass pitcher--that she paid $3 for--to a collector for $150. "I never would have gotten that price for it in my store," she says.

This enthusiasm has made eBay the leader in the online collectibles market. It was the fifth-most-visited Website in August, according to Media Metrix, an Internet-tracking company. "More time is spent in eBay's community than on either AOL.com's or Walt Disney's Website," says Mary Meeker, an analyst at Morgan Stanley Dean Witter. This growth has been driven by word of mouth, since until recently the company has avoided advertising. "Every auction and every buyer begets another auction and another buyer," says analyst Mitch Bartlett of Dain Rauscher Wessels.

When you really think about it, it all comes down to flexibility, cost, and potential business success. No other internet location offers the opportunities for success that eBay does. No other internet marketplace will provide you with the continuous exposure and stream of customers that eBay does each and every day and night of the year. "I've shopped for antique clocks listed by German sellers at 2:00 AM. I've visited eBay auctions in Holland, England, Italy. Where else can you go to see, buy and sell with such a worldwide focus"?
eBay's success is not in what they sell, but in what you and I buy and sell. It's a marketplace with over $30 Billion dollars worth of goods changing hands every year. The big numbers should not be viewed as competition, but rather, your opportunity for success.