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September 15, 2003 |
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About Town Dave Uphoff |
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Ebay - an internet success story
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New websites flourished with the advent of the internet ten years ago. However,
the stock market crash in 2000 eliminated most of the marginal websites who had
no viable business model. Ebay, the online auction website, not only survived
the unmerciful purge of internet companies, it continues to flourish and has become
a unique business that more and more people are starting to use and to depend on.
The Ebay website is used by millions of people to buy and sell items in an auction environment. Everything is transacted through the internet. The seller adds an item for sale through a web page and specifies a starting price and optionally a reserve price that must be met before the item can be sold. Typically, one or more pictures of the item along with a description is entered on the web page. Once the item is added to Ebay's website, bidders from all over the world start bidding on the item online through the internet. Normally, the length of the auction for an item is 7 days and can go on for 9 days if specified by the buyer. The fun reaches a crescendo in the last few seconds of the auction when bidders compete to get in the last bid before the auction ends. There are companies that will actually do your bidding for you in order to get a bid in the last possible second. When the item is sold, Ebay receives a small commission. If the item is not sold because it didn't exceed the reserve price, there is no commission. To keep everyone honest, both sellers and buyers can provide feedback on each other so that everyone has a rating on Ebay. This eliminates crooks and other nefarious individuals from trying to be deceptive and dishonest. Last week I became a seller on Ebay for the first time. My arthritic hips make it difficult for me to get on and off my 1965 BMW R69S motorcycle which I have owned since 1971 when I lived in Massachussetts. So I decided it was time to sell. First, I took the bike to a dealer to have it tuned up for $450. When he found out I was going to sell the bike, he graciously offered to buy it from me for $750. I guess he must have noticed the hayseed on my shoes when he made the offer, but I politely declined. |
My motorcyle is considered a somewhat rare bike that has become a collector's item
and, therefore, I set a reserve price on my bike for $4000 based on what other
bikes of similar nature were selling for. The bidding on the bike exceeded the reserve
price of $4000 with 3 days to go on the auction. Then someone bid it up to $4500
with 2 days to go. It stayed there until the last hour of bidding. The eventual
buyer had been watching the bike on his laptop computer while vacationing out east.
The night of the deadline he checked into a hotel to see if he could get in a final
bid. Went he got to his room he found out that his laptop couldn't connect to the internet.
He made a mad dash down to the hotel lobby and got on the hotel's computer. He made
a last bid with 10 seconds to go and got the bike for $4650.
During the auction I received emails from people wanting to buy my bike outright, but that is forbidden once the auction starts. The buyer seemed to be extremely happy to win the bid on the bike. I was extremely happy to receive $4650 for a motorcycle that I paid $800 for 32 years ago. However, I must admit as the shipper hauled away my old friend for the last 32 years that I had a few tears in my eyes. The Ebay model is truly a great model for the internet. There is no way I could get $4600 for my motorcycle advertising locally. Ebay opens up the whole world as a market place. I even received an email from Austria wanting to buy my motorcycle. In addition to the market exposure, Ebay attracts those who have a compulsion to enter into a bidding contest. Compulsive bidders want to win the prize. It is almost like a gambling addiction. The final attraction is that you can do the bidding from the comforts of your home. It is almost too easy. I can see in the future, clinics for compulsive Ebayers who can't resist bidding for items online. To become a seller you have to provide Ebay with both a credit card number and a bank account number so that they can automatically debit your account for their charges after something is sold. The charge from Ebay for selling my motorcycle was $59. The buyer must arrange payment terms with the seller . Normally, most buyers will send the seller a certified check or money order before the seller will send the item to the buyer. I am thinking about sending a sympathy card to the dealer who offered to buy my motorcycle for $750 along with the copy of the cashiers check I received for $4650. Now I am starting to make a list of all the other items I no longer use that I could sell on Ebay. In case anyone wonders want I am going to do with my newfound wealth, it is to be used to pay for the hardwood floor in the IOOF building that I am remodeling. Sometimes you just get lucky. |
