Ebay

Definition

eBay is an online auction and shopping website where individuals and businesses can buy and sell a wide variety of goods and services. As one of the pioneers of e-commerce, eBay transformed the way people shop online by creating a marketplace that connects buyers and sellers globally, contributing significantly to the rise of digital business models in the late 20th century.

5 Must Know Facts For Your Next Test

1. eBay was founded in 1995 by Pierre Omidyar, originally as a site for selling collectibles, which quickly expanded into a broad marketplace.
2. The platform introduced a unique bidding system that allows buyers to place bids on items, revolutionizing online shopping and commerce.
3. eBay's user feedback system established trust among buyers and sellers, making it a safe environment for transactions in its early years.
4. The acquisition of PayPal in 2002 significantly enhanced eBay's ability to facilitate secure online payments and streamlined the purchasing process.
5. eBay became synonymous with online auctions, but it also introduced 'Buy It Now' options, allowing users to purchase items at set prices without bidding.

Review Questions

• How did eBay's auction model influence consumer behavior in online shopping?
  • eBay's auction model created a sense of excitement and competition among consumers, as buyers could bid against each other for items. This approach not only changed how people perceived the value of goods but also made shopping more interactive. The thrill of winning an auction contributed to increased engagement on the platform, ultimately shaping consumer behavior towards valuing the experience of purchasing as much as the item itself.
• Discuss the role of eBay in the development of digital business models and how it paved the way for other e-commerce platforms.
  • eBay played a crucial role in the evolution of digital business models by demonstrating that an online marketplace could thrive without traditional storefronts. Its successful auction format inspired other e-commerce platforms to adopt similar marketplace concepts, leading to innovations such as customer reviews and personalized shopping experiences. The impact of eBay's model can be seen in today's widespread use of marketplaces like Amazon and Etsy, which continue to shape the landscape of online commerce.
• Evaluate the impact of eBay's payment system innovations on the broader e-commerce ecosystem.
  • eBay's integration with PayPal revolutionized how transactions were conducted online, enhancing security and convenience for users. This shift encouraged trust among consumers hesitant to make purchases over the internet and set a standard for online payment processing. As a result, eBay's innovations not only bolstered its own growth but also influenced how other e-commerce platforms approached payment systems, leading to a more robust and secure online retail environment overall.

Related terms

Auction: A public sale in which goods or property are sold to the highest bidder, a key feature of eBay's marketplace.

PayPal: An online payment system that facilitates secure transactions between buyers and sellers on eBay, enhancing the e-commerce experience.

Marketplace: A platform or space where multiple sellers can offer their products or services to consumers, exemplified by eBay's diverse listings.