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Exploiting the Internet, Opportunities for New Business

Exploiting the Internet, Opportunities for New Business. IIA, Westmeath CEB, Athlone. John McElligott October 2006. About eBay. eBay is the 21 st century marketplace. eBay Marketplace Business. Marketplace mission: create the world’s online marketplace.

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Exploiting the Internet, Opportunities for New Business

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  1. Exploiting the Internet, Opportunities for New Business IIA, Westmeath CEB, Athlone John McElligott October 2006

  2. About eBay

  3. eBay is the 21st century marketplace

  4. eBay Marketplace Business Marketplace mission: create the world’s online marketplace • Provide a global online trading platform where practically anyone can trade practically anything • Sellers create listings of products for sale • Listing fee as low as €0.20, small commission if item sells • Items listed by individuals, SMEs, large businesses or charities on same terms (“level playing field”) • Buyers can search, purchase and make payment • Thousands of categories of items • Auction-style format or fixed price (“Buy It Now”) • eBay acts to facilitate safe transactions and create transparency

  5. eBay is based on feedback • Goal to create open, transparent marketplace • Seller Information Box includes details about the seller, including feedback score • Feedback page shows detail of comments

  6. eBay Values eBay was founded on five key values • We believe people are basically good • We recognise and respect everyone as a unique individual • We believe everyone has something to contribute • We encourage people to treat others the way they want to be treated • We believe that an honest, open environment can bring out the best in people

  7. Welcome to the Community

  8. Find What You’re Looking for

  9. Get the Details

  10. Buyer Seller Transact

  11. Fast Facts • 203 million registered users worldwide • At time of eBay.ie launch in June 2005 there were over 200,000 in Ireland • eBay.co.uk passed 15 million users in April 2006 • At any time, there are 104 million items worldwide • More than 50,000 categories on eBay • Approximately 6.5 million items added per day • As of April 2006, eBay members had left more than 4.5 billion feedback comments for one another regarding eBay transactions • Approximately 1.3 million sellers use eBay as a primary or secondary source of income • More than 724,000 professional sellers in the U.S. • More than 170,000 professional sellers in Europe Source for number of professional sellers: AC Nielsen. All other metrics based on eBay data.

  12. Fast Facts (continued) • In Q2 2006, the value of all goods traded was US $12.9 billion • eBay users worldwide trade more than US$1,640 worth of goods on the site every second • Based on Q2 2006 GMV, the following categories delivered US $1 billion or more in worldwide annualized GMV: • eBay Motors at $17.1 B • Clothing & Accessories at $3.9 B • Consumer Electronics at $3.7 B • Computers at $3.5 B • Home & Garden at $2.9 B • Books / Music / Movies at $2.6 B • Sports at $2.5 B • Fixed-price formats accounted for 35% of total GMV during Q2 2006 • Collectables at $2.3 B • Business & Industrial at $1.9 B • Toys at $1.7 B • Jewellery & Watches at $1.7 B • Cameras & Photo at $1.4 B • Antiques & Art at $1.1 B • Coins & Stamps at $1.0 B

  13. eBay GMV (US $) 81% CAGR

  14. Depth Category Expansion, new and used items Breadth Categories

  15. Why Run a Business on eBay?

  16. Irish Seller: irish-celt (4819 ) • Registered on eBay since: 1998 • Location: Milltown Malbay, Co. Clare • Selling: postable antiques • Seller vignette

  17. eBay’s Addressable Market is Large Inefficient markets Highly efficient markets Less efficient markets in-season retail end-of-life used/vintage new/scarce

  18. Benefits as a Business Channel • Reach • Can reach a market of 203 million eBay users • Over 200,000 eBay users in Ireland; over 15 million users in UK • Business profitability • Low transactional costs • Can reduce or replace many of the traditional costs of doing business (e.g. premises, advertising) • Safety and reputation • Can build a reputation using feedback and comments • Safe, easy payments via PayPal • Ease of use • Listing and promoting items is easy • Several tools to facilitate selling (e.g. Turbo Lister) • Can use eBay as an alternative, or occasional channel • Support • Prioritised support for businesses and leading sellers • On-line help resources

  19. Access to Large Global Buyer Base Populations Athlone 16,000 (1) Midlands Region 279,137 (1) eBay.ie Registered Users at launch > 200,000 (2) eBay.co.uk Registered Users > 15,000,000 (3) eBay Europe Registered Users > 50,000,000(4) eBay Global Registered Users 203,000,000(5) (1) Source: IDA Ireland. (2) eBay.ie Registered Users as of June 2005. (3) eBay.co.uk Registered Users as of April 2006. (4) eBay Europe registered users as of April 2006. (5) eBay global registered users as of June 2006.

  20. Low Transaction Costs

  21. For an item that starts at €0.01 and sells for €30.00 Listing Fee (€0.01 - €1.49) €0.20 Final Value Fee (5.25% of total) €1.58 Total €1.78 eBay Fees as % of Total 5.9% For an item that starts at €0.01, has reserve of €500 and sells for €900 Listing Fee (fee based on Reserve Value of €500) €3.00 Final Value Fee €29.40 Reserve Fee (2% of reserve price) €10.00 Total €42.40 eBay Fees as % of Total 4.7% Margins can increase by using multiple item fixed price or Shop Inventory Format to promote your items Example Fee Totals

  22. What Can You Sell? • You can sell practically anything on eBay.ie, as long as it is legal • Specific listing policies provide users with guidance • http://pages.ebay.ie/help/sell/questions/prohibited-items.html • All eBay users are bound by these policies, which are updated as appropriate • There are some variations in listing policies between eBay sites due to local laws and obligations

  23. Getting started – Feedback • Feedback is an essential enabler of trade on the eBay platform • It is the primary method for our members to protect themselves and make informed decisions before bidding or buying • What is it? • Every member has a reputation based on feedback • Personal opinion comments from other members for transactions with positive, neutral, or negative rating • Feedback score is a count of positive ratings minus negative ratings from unique members • Each member can affect another’s score by a net of +1, 0 or –1 • Coloured feedback stars attained at various levels

  24. Feedback System – Generating Trust • Goal to create open, transparent marketplace • Seller Information Box includes details about the seller, including feedback score • Feedback page shows detail of comments

  25. PayPal – Safe, Fast, Convenient Online Payments How PayPal works – 4 steps Sender 1. Customer clicks on PayPal link. Benefits of using PayPal • Safe and secure • Fast • Easy • International • Buyer protection • Cost effective 2. Customer logs in and enters payment amount. Receiver 3. Seller gets electronic notification of funds received and delivers goods. Seller can withdraw funds or send payment to another customer. 4.

  26. Quick Facts • Global leader in online payment solutions • PayPal has 114 million total accounts, is available in 55 markets and in seven currencies • PayPal has over 10 million accounts in the UK • PayPal transacted about $1,126 in total payment volume every second in Q2 2006. • PayPal established its international headquarters in Dublin in 2003 • PayPal is a safe way to pay online and maintains a very low loss rate due to fraud – 0.29%, or less than one third of one percent.

  27. Return Policy • Many sellers allow the return of items sold • Business sellers must provide customers with a period of seven working days after receipt • Many individual sellers honour similar terms as good business practice • eBay facilitates communication of a seller’s policy through: • Seller tools • Standard placement on item listings • Stating a clear return policy creates transparency and reinforces buyer trust

  28. Skype lets you talk through the Internet … for free. You can also make very low cost calls to phones around the world Download Skype at www.skype.com. Contact eBay buyers and sellers using Skype – testing in select categories Free Calling and “Skype Me” Why is it so great? • Free unlimited worldwide calling to other Skype users • Low cost calls to international landlines and mobiles (e.g. $0.02/ min to New Zealand) • Superior sound quality • Videoconferencing • Easy to use

  29. Tools to Support Efficient Selling

  30. Automation with Selling Manager Pro • Many selling processes can be automated with Selling Manager Pro: • Listing creation • Contacting buyers • Invoicing • Sellers can tailor their own selling strategies by month, quarter or seasonally • Good value for business sellers • Free with Featured or Anchor Shops subscription • €6.99 per month otherwise Third party tools (e.g. ChannelAdvisor) also available to serve large sellers

  31. Maximise Visibility – eBay Shops • Unique look and presence • Customise colours and branding • Extra promotion and recognition • Control what you cross-sell • Data on visitors to your Shop • Shop-only format with lower insertion fee, longer listing duration

  32. Sales Reports and Sales Reports Plus • Can be used to tailor market approach • Provides sales information by category, day, format, ending times • Also compares ASP • Sales Reports are Free • Sales Reports Plus offers more detail • Free with Shops subscription • €4.99 per month without Shops

  33. Select the Right Delivery Services • Postage, courier and delivery market is de-regulating; new options are continually available • Providers can offer differentiated services, such as tracking, guaranteed delivery and volume discounts • GLS are building out a network of “Parcel Shops” around Europe ~ 50 in Republic of Ireland to date • Optimum solution may involve different providers for posting to different regions

  34. Become an Effective Business Seller – Top Tips • Include search keywords in your title and write a complete, accurate description • Sell internationally and specify postage costs for multiple jurisdictions • Include a clear and buyer-friendly return policy • Become more efficient and organised with the right seller tool for you • Offer PayPal as a payment option for ease, speed, buyer peace of mind • Take your feedback rating seriously – it’s your brand! • Consult the Business Centre

  35. Education Resources • eBay Explained • eBay Tour, how to buy, sell, use My eBay, etc. • http://pages.ebay.ie/help/ebayexplained/ • Community & chat boards • Member to member help, discussion boards, interest groups • http://pages.ebay.ie/community/ • Business Centre • Advice for business sellers • http://pages.ebay.ie/ebaybusinesscentre/index.html • Safety Centre • Safety tips & problem reporting • http://pages.ebay.ie/safetycentre/ • eBay Events • eBay University, IIA/CEB & other events • http://www.ebay-events.ie/ • Site help and contact Customer Support • http://pages.ebay.ie/help/index.html

  36. Free Business OnRamp Support • Service to assist businesses with becoming sellers on eBay.ie • Expert consultation with a member of our specialist Business team • Support through the process of getting started • Advice on how to make the most of your eBay selling • How to take advantage • Register as a seller on the eBay.ie site • Once you have registered, send email to IrishBusiness@eBay.com with the following: • Your eBay user ID • Best contact telephone number, with voicemail if possible • We will arrange a time for the Business Onramp consultation, generally can schedule within two weeks

  37. eBay in Ireland

  38. eBay.ie Business History • May 2004: Tánaiste and Minister for Enterprise, Trade and Employment Mary Harney TD officially opens eBay’s Irish offices • European CS centre and PayPal’s international headquarters • June 2005: Launch of eBay.ie to give Irish eBayers their own marketplace • July 2005: Wanderly Wagon’s Judge appointed eBay Security Watchdog • September 2005: First eBay University in Ireland • November 2005: Launch of eBay Motors Ireland to facilitate trade of vehicles, parts and accessories • March 2006: eBay announces expansion of Irish operations • >900 employees in Ireland, plans to create >300 additional jobs • July 2006: eBay and O2 partner to launch eBay Mobile

  39. eBay Mobile • Launched in partnership with O2 • From i-mode phones users can: • Search • View simplified listings • Bid and buy • Also available at www.ebaymobile.ie • Ad campaign in summer 2006 • Print ad in June O2 magazine • Co-branded TV ad launched July 2006 • Co-branded radio ad launched August 2006

  40. Education – Events • eBay.ie sponsors and participates in local events • Goals: further education on e-commerce and eBay as a platform to enable business • Recent and upcoming events: • eBay University, Dublin: 12 September 2006 • Generating Revenue for Your Website, Tullamore: 14 September 2006 • Facilitating Broadband Leadership, Dublin: 21 September 2006 • Exploiting Business Opportunities on the Internet, Carlow: 5 October 2006 • eBay University, Limerick: 10 October 2006 • Exploiting Business Opportunities on the Internet, Athlone: 19 October 2006 • National IT and e-Security Summit, Dublin: 9 November • Exploiting Business Opportunities on the Internet, Dún Laoghaire: 23 November 2006

  41. Charity Fundraising eBay.ie works directly with Irish charities to help promote fundraising and awareness, offering unique items and experiences

  42. Select Irish Charities Featured To Date Action Aid International Ireland Fermoy Lions Club Irish Wheelchair Association Bóthar GOAL Ireland Kildare Town C.Y.M.S. Brothers of Charity Svcs. Galway Irish Autism Action Leprosy Mission Ireland Cystic Fibrosis Assn. of Ireland Irish Cancer Society To Russia With Love DEBRA Ireland Irish Heart Foundation

  43. Velocity of Trading – Irish Buyers On an average day… An Irish buyer purchases an auto part every 5 minutes

  44. Velocity of Trading – Irish Buyers An Irish buyer purchases a DVD every 4 minutes

  45. Velocity of Trading – Irish Buyers An Irish buyer purchases a collectible every 2 minutes

  46. Velocity of Trading – Irish Buyers An Irish buyer purchases an item of clothing every 2 minutes

  47. Velocity of Trading – Irish Sellers In Q3 2006, an Irish buyer buys 3 items across all categories every minute of every day

  48. Velocity of Trading – Irish Sellers An Irish seller lists a collectible for sale every 5 minutes

  49. Velocity of Trading – Irish Sellers An Irish seller sells an item in music every 4 minutes

  50. Velocity of Trading – Irish Sellers An Irish seller sells an item in computing every 4 minutes

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