eBay is leading the way in Internet auctions. The Internet brings together a larger number of both buyers and sellers and has opened the way for individuals to trade on a global scale. eBay has taken a number of steps to increase confidence and reduce risks. Buyers and sellers are rated by the other party, and these ratings are available to prospective buyers and sellers. Goods are insured by eBay up to a maximum value against non-delivery and they also offer an arbitration service. Payments are usually made direct between buyer and seller but eBay has helped the process by linking up with on-line payment systems such as PayPal. Both parties registered with PayPal each give their credit card or bank account details. Payment is then done through PayPal who keep the accou

Given the quality of eBay’s environment, and assuming their strategy is implemented correctly, it would be safe to say that eBay can achieve their mission “to help practically anyone trade anything on earth”.

Following, are some of eBay’s financial results for the past four years. This gives an indication of the company’s cash generating power. (All numbers are in thousands except EPS).

· Large portion of profit is dependant on people considered “collectors”

eBay’s strategy helped it become a dominant player in the industry. Their business model consisted of a consumer-to-consumer model, one that not many companies used at the time. Other companies were using merchant-to-consumer business models where consumers dealt mainly with large businesses and retailers. By using the consumer-to-consumer model, eBay was not limited to just retailers. Their model allowed the average person to trade and sell items with other people. It also allowed people to start small businesses who could not afford to purchase retail space, bust still sell their products to a large audience.

Net Income 7,061 7,273 9,567 48,294

Some topics in this essay:
Payment PayPal, Net EPS, Marketplace Founded, AuctionUniverse None, Income Statement, Product Development, Operating Margin, Gross Margin, Net Income, Gross Profit, buyers sellers, ebay profitable, gross margins, 80% gross margins, business model, “buy now”, consumer-to-consumer model, category listing, ebay leading, paypal account, ebay users,