From auction to fixed price in only 20 years for EBay

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Time flies when you’re having fun. Can it really be 20 years since Pierre Omidyar created eBay and sold the very first item on what was then a rather unusual beast – an online marketplace.

Since then there have been marketplaces opened up by all and sundry but none have gained the presence that eBay has gained – helped by its virtuous circle of more buyers attracting more sellers etcetera. This has helped it maintain its prominent position in the world of retail that has remained healthy after 20 years.

Equally unusual was Omidyar’s use of self-regulation whereby buyers and sellers leave mutual feedback on the site. Such a simple and effective innovation has also been employed by all and sundry.

These two components remain at the heart of eBay but some things have changed in the last two decades. The scale of the thing for starters, as Will Weightman, director of consumer to consumer at eBay, tells Retail Insider that there are now 25 million sellers and 125 million active buyers on the site.

The auction side of things has also dwindled away since 80% of the goods on the site are now listed as ‘Fixed Price’ items. And rather than it being a site for second-hand items, as many as 80% sold today are brand new goods.

In conjunction with this move to fixed price there has been significant growth in the number of business sellers on the site – including some well known high street names. There are currently 200,000 such sellers on the site. The beauty, according to Weightman, is that eBay offers sellers of all sizes a “democratic level playing field”.

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Pierre Omidyar, founder of eBay

The company also bought PayPal en route and recently sold it (for a rather decent return) having benefited in the early days when it needed a robust payment system for the site that Weightman says could be “adopted by the community”.

More recent changes have involved the recognition that there is an increased blurring of online and offline and that eBay, as an online-only business, needs to partake in this development. To this end, in 2013 it struck a partnership with Argos to offer a click & collect service for eBay customers in its stores that now runs to 750 outlets and has seen 2.5 million parcels go through this system to date.

The eBay global shipping programme is also proving a big winner as it opens up the world to sellers by offering them a global delivery service whereby they simply send the purchased goods to the eBay warehouse in Derby and the company does the rest.

The purchase of Shutl (with its 90-minute delivery service) was also part of the company’s ongoing trials around delivery as Weightman says it reflects “how eBay is developing a portfolio of options that makes it easy for customers”.

That of course was exactly the objective of Omidyar exactly 20 years ago when he  coded up the first online marketplace.

Glynn Davis, editor, Retail Insider