eBay would seem to have realized the goal of a perfect market where buyers and sellers have access to perfect information about other buyers, sellers and merchandise. Because eBay charges a small fee relative to the price of the products, and because the company does not maintain or manage any inventory of its own, it depends on large volume and low overhead in order to remain profitable. The auction site has also expanded its original vision of merely providing an auction forum to a site where buyers can select a "buy it now" price for many items, and where new items are sold directly to consumers as well as used items. At this point, it is possible to buy items for a few dollars that would otherwise be found at a garage sale, and also entire homes and businesses for millions of dollars. This research examines the marketing strategy of eBay and how the company's marketing works to further eBay's long-term strategic objectives.
Although the World Wide Web was, at one time, expected to bring about a revolution in management--resulting in the so-called "new economy," companies learned that old-fashioned attention to profitability was still required for success. One of the few companies that did have a new approach to doing business was an online auction house that survived by providing a forum for strangers to sell goods to other strangers. From these inauspicious beginnings, eBay has become a commercial powerhouse, and has expanded its operations around the world.
Today, eBay's mission is "to provide a global trading platform where practically anyone can trade practically anything" ("Company Overview," 2003). Founded in 1995, eBay began its existence as an on line auction service. Sellers (who must register with the site) list items for sale and, optionally, a minimum price (as well as a reserve price below which they will not sell the item). Today, sellers also have the option of setting a fixed price ("Buy It Now") th...