Factors behind eBay's increased sales and competitive success online

¶ … auction web sites has increased rapidly since the technology of the Internet was introduced. Many business-oriented people have diverged from the traditional way of doing business into the process of using the advanced technology of buying and selling online. One of the Internet-based company that is continuously proving the importance and usability of computers and state-of-the-art method of Internet communication is Ebay.

Ebay is among the Internet-based auction sites that are reaping success these days. Though Ebay has some contenders in the industry of buying and selling online, such as Yahoo, among the first in the industry of e-commerce, Ebay seems to turn the table on its side especially during the past year when patrons of Ebay online had increased in quite a large number of percentage as compared to its number of its investors and clients in the previous years.

The success of eBay can be proven by millions of resellers and entrepreneurs who testified that they became successful because of eBay. In turn, the success of many of eBay's registered users, with registered users of 114 million worldwide, gave eBay the edge to be the first among the rest of auction web sites. According to the 2004 analysis, eBay rates higher than its competing counterparts such as Yahoo and Amazon.

While eBay continuously reaps success, it is but normal for many analysts to make researches and study on how eBay had reached its current outstanding performance in online trading. The secrets to success of eBay is usually the topic employed in many statistical analysis regarding eBay. In view of this, how eBay was able to increase and maintain its rising sales in its business of online trading, despite of the many auction sites that were built after the Internet was introduced, will be the study in this research. To be able to do this, data will be gathered from people who habitually open their computers and take a look at new stuffs in eBay.

Much of the reasons in the increased in sales of eBay last year can be accounted to the millions of eBay's registered resellers and entrepreneurs, as well as to millions of eBay clients who buy stuffs online. In similar view to this, to gather information that will answer the question "Why has eBay increased its sales last year?," data will be collected from these important people of eBay. Information on the current characteristics of eBay would be useful to identify the reasons why eBay attracts investors and clients, bringing eBay a success that overcomes other auction web sites' achievements.

Some strategies of eBay, based on the study of some analysts, will be included in this paper. Discussing the company strategy can provide an overview and understanding to the readers regarding the success of eBay. Strategies such as marketing strategies, advertising strategies, and strategies in trading, will be a part in the discussion in this paper.

Overview on Ebay: Some Facts about Ebay

To allow the readers have a simple and quick overview about Ebay, before continuing in the succeeding sections of this paper, following is an extract from an online source about the activities that happen in Ebay.

There are nearly 95 million eBay users who spend $894 per second.

Most eBay sellers are individuals and small businesses who sell everything from porcelain dolls to DVD players to Mercedes convertibles.

Every day, more than 2 million new items are added to the eBay marketplace, more than 10 million bids are placed, and more than 100,000 new people register to buy and sell on eBay.

At any given moment, eBay is conducting some 19 million auctions, divided into more than 45,000 different categories.

About 2 million new items are offered for sale every day.

One company is grossing more than $5 million per year selling brand-new pool tables on eBay. Their eBay store is so profitable that they've closed their retail location and now sell solely online. That's right, they're making $5 million by selling pool tables -- proof that you can sell just about anything on eBay if you know how to do it.

The Increasing Number of Salespeople Registering in EBay

Ebay is a company that started from a small online auction business into a giant one. Its position in online trading had inspired many business-oriented people to try their luck and apply their capabilities in marketing. One good thing in Ebay is that aspiring businessmen and women can easily start their objective of becoming successful in trading with just the use of a computer.

Even at home, they can start their goal of doing business. All they need is a computer and a connection to the Internet. Of course, eBay is among the many options where they can choose to join and start their endeavors in online trading.

The increasing and unlimited supply of entrepreneurs that join eBay is among the reasons of eBay's success. Since eBay is an online business, the company considers the whole world as its source of entrepreneurs. Obviously, this is true as many people worldwide continue to join the company and provide eBay with people power that no other traditional company that can only be reached by attending in the physical location can achieve.

With 114 million registered users worldwide, it is unsurprising that Ebay is rsinked 60, ahead of Amazon (66) and Yahoo (61) on Interbrand's Top 100 Global Brands with an estimated brand value of $4.7bn (£2.6bn).

Ebay values the community of entrepreneurs that it has built and is continuously building. This is one reason why Ebay's sales are rising. The company values their people more than the need to advertise their company's name. According to a news analysis, taken from the September 2004 issue of Brand Strategy, Ebay only reached its ranking in Interbrand's Top 100 Global Brands only last year. However, despite eBay's brand did not rank well, the company's revenue performed differently, as it did well financially. The news analysis indicates that

Surprising though it may be to find a young brand alongside weU-estabUshed names such as Coca-Cola and IBM - albeit several places behind - it is more intriguing because Ebay is perceived to eschew traditional forms of marketing. On being asked how to achieve these lofty heights, a UK spokeswoman for the company said Ebay wasn't interested in talking about how it marketed its product, claiming: "It's not about marketing the Ebay name, it's all about developing the community"

Many eBay resellers have testified their success since they joined eBay. Because of them who tell the world what they had achieved from being online entrepreneurs, most of those who haven't found the way to knowing eBay and have read such testimonies have also started to become part of the online marketplace. This process makes eBay's people resources grow and grow continuously, allowing them to overcome their former competitors in online buying and selling. There are in fact a large number of testimonies that can be found online stating the success and financial growth eBay resellers earned from the company.

One strategy that had grown out of eBay's current resellers is the activity of drawing more resellers and registered users. From the millions of eBay resellers grows more resellers. This process is similar to a tree of resellers where every reseller has their own branches of resellers, and so on. Such activity of driving resellers in is not just a simple way of attracting people to join the company. Instead, this activity of expanding people into millions and millions provide benefit and earnings to everyone, both the current resellers as well as to the new eBay entrepreneurs.