Podcasting Ideas at the ThinkSpot
The Price of War ... and Peace

eBay: I Think I Get It

I always go to the Northwest Entrepreneur Network (NWEN) Venture Breakfast Meetings; even when the topic doesn't really excite me, I never fail to make or renew valuable connections with wonderful people during the earlybird networking.  And, I am sometimes pleasantly surprised by a topic and/or speaker(s) being far more interesting than I expected, as was the case yesterday.  [Disclosure: I am a member of the all-volunteer Venture Breakfast Committee for the not-for-profit organization.]

My only experience with eBay was in bidding on a handbag that my daughter really wanted for her birthday last fall.  I was far too laid back on the first one, and failed to win the item; I paid a little more attention the next time, but still lost on that item, too.  The third time, I was ready to pounce; I monitored the auction carefully, and placed my final bid -- $2 higher than the previous bid, when there were 2 seconds left -- and won the item.  It was exciting, and I could see how people could become addicted to this kind of activity, but the effort exceeded my cost/benefit threshold, and I have not returned to the site ... and so, frankly, I wasn't all that interested in learning about how much money people are earning, or saving, by using eBay.

After starting off with a prominent and ominous (prominous?) slide warning about copyright restrictions on her presentation material, the moderator, Janelle Elms, an eBay Universty Instructor, polled the early morning audience on our experiences and intentions with respect to eBay.  About 5% of those present had sold something on eBay, a little less than half had bought something on eBay, and perhaps 2% were interested in making a living by selling on eBay (I imagine that all of these percentages were significantly lower than her usual audience at an eBay University session, especially that last number). 

The moderator and the two panelists, Greg Harrison, co-founder and CTO of mpire (which provides "personal ERP software for online sellers"), and Howard Hawk, co-founder and President of Bidadoo ("the easy way to eBay" for individuals, businesses and non-profits), helped open my eyes to the much larger potential of eBay.  A number of statistics were shown about the amount of items bought and sold on eBay, but it was the types of items, buyers and sellers that I found really interesting, as well as some of the second-order effects. 

I thought eBay was primarily used for selling used goods (an online garage sale), but new goods are increasingly part of the mix.  I also thought that most transactions were between individual consumers (C2C), but businesses -- large and small -- are increasingly buying and selling through eBay (though I didn't think to ask, then, what the proportion was between B2C and B2B transactions).

And, it's not just products being bought and sold on eBay -- services can be bought and sold as well!  Janelle used the example of an insurance agent who was holding a seminar about some "boring" product he was offering; the man sold tickets to the event via eBay (for some token amount), which created a significant buzz around the event, and helped fill the seminar.  GaylĂ© Morrison (one of my favorite NWEN members) later suggested that this kind of thing could be extended more generally for speakers, creating a new kind of speakers' bureau within eBay; as a former conference chair, I think this would be really cool, since the reputation system could be used to help event planners select speakers who are knowledgeable, articulate and passionate (the latter two are not always easy to determine from speaker bios).

Extending this idea a bit further, given the rise of free agency, I wonder if eBay could become a marketplace for assembling teams, in which people can more effectively and dynamically form partnerships and other business relationships for new ventures.  And, could eBay create its own currency to provide a barter capability among different people and organizations?  Perhaps eBay could provide the means to "enabling a community-driven marketplace for civic good" envisioned by the Interra Project, which I blogged about a while back.

Another interesting aspect to the growth of eBay is the crossovers between the online marketplace and the offline marketplace (another example of what Alex Pang refers to as the impending end of cyberspace, where the distinctions between the so-called online and offline worlds will fade away).  Janelle reported that eBay sellers who have "bricks and mortar" stores see a 25% increase in foot traffic in their stores, so setting up an eBay storefront can be an effective new marketing channel for such businesses.  Other interesting tidbits include Janelle's observations about passion and self-fulfilling prophecies: "eBay sellers are the most excited group of entrepreneurs I've ever seen" and "If you treat eBay like a garage sale, you will get garage sale prices".

Apparently, more and more people (and businesses) are treating eBay not like a garage sale, but a full-featured marketplace.  I started wondering what implications this has for Amazon.  I noted earlier that I personally find bidding rather tiresome, and prefer to simply buy things outright ... I'm reminded of different preferences in buying automobiles (more and more of which, of course, are being bought and sold on eBay): perhaps eBay will be the marketplace of choice for those who like to haggle over prices, and Amazon will be the marketplace of choice for those who prefer a fixed price.  If eBay offers non-bid purchasing options, then I suspect Amazon may be in real trouble.

Primed by my recently increased appreciation of the potential power of podcasting, I now see that eBay -- and companies like mpire, Bidadoo and iSoldIt -- are [also] reducing barriers to entry and enhancing the long tail in the marketplace.  I also see that biztrust, an essential element of bizlove, will be increasingly important in driving these trends (eBay users' increasing trust is one of the significant factors in the increasing average transaction price on eBay).  And, based on some of the statistics and examples mentioned throughout the talk, it appears that eBay is enabling tens of thousands of people to realize the promise of "do sell what you love, the money will follow".

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