EBay

Profit and transactions

eBay generates revenue from sellers, who pay a fee based on the selling price of each item, a fee based on the starting price, and from advertising. In February 2005 it was announced that eBay would increase fees it charges to eBay Stores sellers, which caused considerable enough controversy among eBay users that the President of eBay's North America business recently emailed all eBay users with news that other fees would be decreased. eBay does not handle the goods, nor does it transact the buyer-seller payments, except through its subsidiary PayPal. Instead, much like newspaper want-ads, sellers rely on the buyers' good faith to make payment, and buyers rely on the sellers' good faith to actually deliver the goods intact. To encourage fidelity, eBay maintains, rates, and publicly displays the post-transaction feedback from all users, whether they buy or sell. This way, the buyer is encouraged to examine the sellers' feedback profile before bidding to rate their trustworthiness. Sellers with high ratings generally have more bids and garner higher bids. However, it is possible for sellers to make their feedback private and just leave the numbered rating (number of positive, negative and neutral feedback with a positive feedback percentage), which means that bidders and sellers cannot see the comments other users have left. eBay also has a significant affiliate program, and eBay affiliates can, for example, place live eBay product images and links on their web sites.

Related Topics:
Advertising - PayPal - Newspaper

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