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THINKING. Business Revolution – Online Auctions. The Experience. david.king@mmv.vic.gov.au November 2000. What’s the problem?. didn’t want? couldn’t inspect goods? was it value? no trust? remedies if something went wrong? did I get the best price?.

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business revolution online auctions

THINKING

Business Revolution – Online Auctions

The Experience

david.king@mmv.vic.gov.auNovember 2000

what s the problem
What’s the problem?
  • didn’t want?
  • couldn’t inspect goods?
  • was it value?
  • no trust?
  • remedies if something went wrong?
  • did I get the best price?
ebay some facts and figures
eBay – some facts and figures …
  • Operating, profitably, since 1995
  • 18.9 million registered users - buyers and sellers (was 7 million 18 months ago)
  • Around 4 million items at any time- 4,500 categories- 600,000 items added/auctions per day
  • 2.1 million unique visitors per day- use 2hrs/month
  • $US0.01 to $10K’s – average $US50
ebay model
eBay – model …
  • NEW MODEL – electronic one-to-one trading in an auction format
  • electronic listing/bidding/introduction system (Pez container trading)
  • NOT a traditional Auction House - doesn’t handle money or goods
  • most litigious society on earth
  • issues faced – trust, ease of use/training, payment, adding new value, ethical, global market
ebay how does it work
eBay – how does it work …
  • anyone can look
  • buyers and sellers must register
    • Name, address, contact details, email
    • “nickname”
    • Sellers – account for paying eBay fees
  • sellers “list” an item, with a finishing date/time, starting price
  • buyers bid up to the finishing date/time
  • notification, Winner and Seller agree shipping, payment (by email, 3 days to contact)
ebay bidding simplified

Bidder 2 bids $22.00 (max.)

System sets top bid to $19.00

Bidder 3 bids $18.00 (max.)

System sets top bid to $11.00

Bidder 1 bids $10.00 (max.)

Current top

bid

System sets top bid to $5.00

Seller sets $5.00 minimum($1 bid increment)

Current topbid

Seller’s minimum

Seller’s minimum

eBay – bidding (simplified)…

$25

$20

$15

$10

$5

ebay payment
eBay – payment …
  • eBay charges Seller $US0.25 to $2.00 to list, +1.5% to 5% for successful sales
  • Buyer pays Seller direct, inc shipping
    • Cash, or
    • Money order/cheque (usually $US), or
    • Credit card direct – email or secure server or
    • Billpay, Bidpay, Paypal, or
    • iEscrow
  • Seller then sends the goods
ebay experience
eBay – experience …
  • 18 months, 3-person household, buyer only, 80+ things
  • “the mother-load”
  • exposed to most behaviours
feedback rules
Feedback rules?
  • can only be posted by the successful buyer, seller in a transaction
  • once posted, can’t be changed – by anyone - (can respond)
  • overall negative and you’re out (???)
  • some sellers say they won’t deal with ANYONE with negative feedback
important to buyers
Important to buyers?
  • trustable, impartial, transparent system
  • critical mass, find things (despite poor grading), and tracking
  • (“good buy”/bargain)
  • seller who
    • describes accurately
    • communicates clearly
    • easy to pay, won’t abscond
    • ships promptly, economically, safe and sound
  • privacy
  • recourse if things go wrong
important to sellers
Important to sellers?
  • trustable, impartial, transparent system
  • critical mass of bidders
  • best price
  • bidder who
    • communicates clearly, promptly
    • pays
    • won’t falsely claim goods didn’t arrive, damaged
  • privacy
  • recourse if things go wrong
changing the world
Changing the world?
  • NEW – market which didn’t exist
  • global, with global prices ($A = ouch)
  • service industries/spawning
    • middlemen - payment, escow
    • umbrellas – AuctionWatch
    • postal and shipping calculation online
  • (training?), ease of use, clear process maps
  • balance of trust – look mum, no certificates
  • NEW – track sellers, buyers, prices, market intelligence, tools (eg sniping).
challenges for ebay
Challenges for eBay …
  • litigation - really an Auction House?
  • fraud - >10% (20%?) of all internet fraud estimated to be in Auction envt.
  • responsibility for listing:
    • guns
    • body parts
    • soul?
  • flawless 24 x 7