Friday, 12 January 2007

I bought it on ... eBay

Search-term analysis brings with it sometimes words, which are hardly trendy, or at leats new. eBay is one of them. It is one of the most popular keywords, yet it is - in Internet years (which is apparently worse than dog years) - an old establishment. It celebrates now its 11th anniversary and keeps up swallowing other e-commerce services, like Skype, PayPal, Shopping.com, and the late purchase in Pierre and Mag's virtual shopping bag: StubHub, an online ticket sales (and resells service) for $310 Million. It also continues to work on users' security issues, given the common concerns in this area. Now you can buy (almost) everything on eBay, even Domain Names.

However, it is worth mentioning, that eBay caused a revolution in the way people start a business. People can now start a business, knowing the right trends, almost from nothing and from very little original capital, apart from a good know-how on how to advertise on eBay and work with this site. It is one of the best solutions for a home-based business and has helped to developed an industry of eBay related businesses: shipping companies and forwarding companies (PO Boxes for those not living an an area where the auction is available but really must have that manga book); people who'd sell on eBay for you, if you're not computer savvy or know how to sell; drop-shippers and other wholesalers, who now might sell to the average Joe, who hopes to break it on eBay, and many others (regarding the latter, may I just add a warning that there are many scams out there, and it takes hard work - and no e-book - to find the right drop-ship deal for you! I used to sit hours to research for clients on right drop-shippers and wholesellers. Not an easy task to find them in the crowd of scammers and spammers). You can also use eBay to make a joke (remember that Paris Hilton toilet paper from two weeks ago?), shock and provocate, and collect charity.

It is interesting to see (and learn) how eBay's system is based on trust. For a scientific analysis of this question, read, for example "Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System" by Paul Resnick and Richard Stockhausen (PDF. ). Another study on eBay that might be interesting to read is "Pennies from eBay:
the Determinants of Price in Online Auctions" by David Lucking-Reiley, Doug Bryan, Naghi Prasad and Daniel Reeves (PDF). Another interesting study's abstract says:

We conducted the first randomized controlled field experiment of an Internet reputation mechanism. A high-reputation, established eBay dealer sold matched pairs of lots—batches of vintage postcards—under his regular identity and under new seller identities (also operated by him). As predicted, the established identity fared better. The difference in buyers’ willingness-to-pay was 8.1% of the selling price. A subsidiary experiment followed the same format, but compared sales by relatively new sellers with and without negative feedback. Surprisingly, one or two negative feedbacks for our new sellers did not affect buyers’ willingness-to-pay.
(See: Paul Resnick1 Contact Information, Richard Zeckhauser2, John Swanson3 and Kate Lockwood4 "The value of reputation on eBay: A controlled experiment" Experimental Economics Volume 9, Number 2 / June, 2006).

However, it should be mentioned, that a recent study has also found that some users manage to manipulate their ratings, and that ratings shouldn't be your only index in knowing whether to trust a seller or not.

Other issues:

* How to beware of scams and counterfeit designer merchandise on eBay


* And while we're at it, another eBay problem is sites posing to be eBay, actually phishing for your credit card information. Read more about avoiding eBay identity theft here.

* How to contact eBay and Paypal support

* When to sell - When are the most users on eBay? (or in other words: when is it best for your auction to end?)

* What to sell on eBay? ( if you could buy stuff in other countries)

* How to price - What is the average price of items sold on eBay

* Where to market your art (also through eBay)

As a personal consequence, I decided to add eBay's "What's Hot" to my Zeitgeist Analysis.

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