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How Does eBay Work

How Does eBay Work

If you are clueless about how the online auction giant, eBay works, this article will be a revelation. Read to know all about it, from the buyer's and seller's perspective.
Omkar Phatak
With a listed revenue of USD 8.727 billion in 2009, eBay is the most visited online auction website ever. It was officially launched in September 3, 1995 by Pierre Omidyar in San Jose, California. At that time, the site was known as 'Auctionweb'. The very first item ever auctioned or bought on the site was a broken laser pointer. The site was rechristened as 'eBay' in September, 1997.

From a mere 30 employees in 1998, with a revenue of USD 4.7 million, eBay has grown today to be the premier online auction site operating in 30 countries worldwide, employing 15,500 people and earning revenues that have gone beyond 8 billion dollars. It remains to be one of the best dotcom success stories ever.

For Sellers

Here's how bidding works on the site, from the seller's perspective. Any seller must first open an account with the site to be able to sell items. A PayPal account will also be necessary to make reception of payments possible. Checking out the best selling items will provide you an idea about how items are marketed and sold on the site.

To list an item, you must provide all the relevant information describing it. There is a fixed fee for listing items on the site, which you must pay for every item you list in there. You may also upload a photo of the selling item for free. There are two ways of selling it. You can either sell through the auction format or through the 'Buy Now' option.

If you want to use the latter option of direct sale, you have to pay extra fees. If you plan to sell through the auction format, you need to set the starting base price and the time frame for which the auction will go on. You hold complete responsibility for the sale of the item and need to answer any queries put forward by the buyers. Specify shipping cost details in the product information.

Once the auction ends, you must sell the item to the highest bidder. The buyer who wins the bidding will be informed about it by eBay and will be asked to pay you for the item, via PayPal. On receiving payment, you must ship the item to the buyer and then provide feedback about the transaction. This feedback helps create 'positive' reputation for the buyer. The website earns money by working as an intermediary to bring the buyer and seller together.

For Buyers

Now, let us take a look at the other side of the auction, from the buyer's perspective. A buyer also needs an account. So, if you want to participate in any of the online auctions, get registered as a buyer. You can make a category wise search of the items, which you would like to buy. If you are interested in buying any item put for auction, sign into your account and place your bid. You may inquire about the item directly with the buyer and get your doubts cleared out.

The bidder must remember that once you put in your bid, you are in a binding contract to buy the item, if you win the auction. Once the stipulated time for which the auction lasts, is over, the buyer with the highest bid is informed about it. He must pay the seller using PayPal or any other such service allowed by eBay. The buyer must then provide feedback to the seller, which helps in improving his rating on the site.

Hope this article has cleared most of your doubts about how this auction site works to make the buying and selling of millions of items through more than 30 countries worldwide possible.