Commerce | E-commerce » Scheidl Gergely - Online Marketplaces in Hungary

http://www.doksihu Budapesti Gazdasági Főiskola KÜLKERESKEDELMI FŐISKOLAI KAR KÜLGAZDASÁGI ANGOL SZAK Nappali tagozat Médiamenedzser szakirány Online piacterek Magyarországon és külföldön különös tekintettel az online aukciós oldalakra (ONLINE MARKETPLACES IN HUNGARY AND ABROAD WITH SPECIAL RESPECT TO ONLINE AUCTION SITES) Budapest, 2005 Készítette: Scheidl Gergely http://www.doksihu 3 Contents Contents Page Title 2 Contents 3 List of Tables 6 List of Figures 6 Acknowledgements 7 Abstract 8 Introduction 9 1 E-Marketplaces, E-Commerce and I-Commerce 10 1.1 Classification of E-Marketplaces 10 2 All about Auctions 11 2.1 From Ancient Auctions to Online Auctions 11 2.2 Online Auction Sites 12 2.21 B2B Online Auctions 12 2.22 B2C Online Auctions 13 2.23 C2C Online Auctions 13 2.231 eBay – The World’s Online Marketplace 17 2.2311 History of eBay 17 2.2312 eBay’s Success in Numbers 19 2.2313 How eBay Works 22 2.2314

Services Offered by eBay 30 2.23141 Listings 31 2.23142 Seller Tools 40 2.23143 PayPal 40 2.23144 Standard Purchase Protection Program 2.23145 Escrow Service 41 2.23146 ID Verification 42 2.23147 eBay Shop 42 2.23148 eBay Live Auctions 44 2.23149 eBay Toolbar 45 41 2.231410 eBay Giving Works Fee Donation Policy 45 2.231411 eBay Affiliate Program 45 2.231412 eBay University 45 2.231413 The eBay Shop 45 2.2315 eBay Germany 46 http://www.doksihu 4 2.23151 History of eBay Germany 46 2.23152 eBay.de’s Success in Numbers 46 2.23153 Characteristics of eBay.de 47 2.2316 Competitors of eBay 2.232 The Online Auction Market in Hungary 48 49 2.2321 Vatera – The Leading Hungarian Auction Site 50 2.23211 How Vatera Works 52 2.23212 Services Offered by Vatera 55 2.2322 TeszVesz – Competitor of Vatera? 59 2.2323 The Future of The Hungarian Auction Market 59 Conclusion 60 Bibliography 61 http://www.doksihu 5 List of Tables

Tables Page Table 2.23131 Bid Increments 27 Table 2.231411 Insertation Fees 31 Table 2.231412 Insertation Fees in Business & Industrial Category Table 2.231413 Insertation Fees for Real Estate, Timeshare & Land Table 2.231414 Insertation Fees for Vehicles Table 2.231415 Final Value Fees Table 2.231416 Reserve Fees Table 2.231417 Buy It Now Fees Table 2.231418 Listing Upgrade Fees 39 Table 2.231419 eBay Picture Service 39 Table 2.231421 Seller Tools 40 Table 2.231431 PayPal Fees 41 Table 2.231451 Escrow.com Fees 42 Table 2.231471 Store Insertation Fees 43 Table 2.231472 Store Final Value Fees 43 Table 2.231473 Store Listing Upgrade Fees 44 Table 2.231474 Store Picture Services Fees 44 Table 2.232111 Bid Increments on Vatera Table 2.232121 Final Value Fees on Vatera Table 2.232122 Optional Feature Fees on Vatera 31 32 32 33 34 34 54 55 56 http://www.doksihu 6 List of Figures Figures Page Figure 2.231 Auction of Pope

Benedict XVI’s car on eBayde 16 Figure 2.23111 eBay Across the World 19 Figure 2.23121 eBay’s Registered Users 1998-2004 20 Figure 2.23122 Listings on eBay 1998-2004 Figure 2.23123 Growth in Total Value of Items Sold on eBay 1998-2004 21 Figure 2.23124 Growth in eBays Net Revenue 1998-2004 22 Figure 2.23131 Seller Information Figure 2.23132 Member Profile Figure 2.23133 Classification of Feedback Stars 24 Figure 2.23134 Place a Bid 26 Figure 2.23135 Reserve Price 28 Figure 2.23136 Dutch Auction 29 Figure 2.23137 Buy It Now 30 Figure 2.231411 Gallery 34 Figure 2.231412 Item Subtitle Figure 2.231413 Bold Option 35 Figure 2.231414 Gift Services 36 Figure 2.231415 Border Figure 2.231416 Highlight 37 Figure 2.231417 Featured Plus! 37 Figure 2.231418 Homepage Featured 20 23 23 35 36 38 Figure 2.231521 Total Value of Items Sold on eBayde 2000-2004 47 Figure 2.23211 Growth in Vatera’s Registered Users 2001-2004 50 Figure

2.23212 Growth in Number of Items Sold on Vatera 2001-2004 51 Figure 2.23213 Growth in Total Value of Items Listed on Vatera 2001-2004 52 Figure 2.232111 Classification of Feedback Stars on Vatera 53 http://www.doksihu 7 Acknowledgements There are many other people who contributed to this dissertation in many ways. I would like to thank especially my advisor, Mária Bíró, for her generous time and encouragement, the detailed comments and suggestions as well as her support and advice. I wish to thank you my tutor from the Media Department, Judit Nagy, for her encouragement to choose this topic for my dissertation work. Finally, I would like to thank those who helped me by providing important information and data about their auction sites, namely Szabolcs Valner, the regional director of Vatera.hu; Ype Gerbrandy from eBay Netherlands Customer Support; Raymond Muntwyler, the marketing director of Ricardo.ch AG from Switzerland; Birgit Praher from OneTwoSold from Austria

http://www.doksihu 8 Abstract The advent of the Internet has changed completely our private and business life. Similar astonishing changes took place in the B2B, B2C as well as C2C relationship with the emergence of online auction sites. In my work I focus on the C2C auction sites, which revolutionized the C2C relationship. Prior to online auction sites consumers could look for unique and used products in classified ads or visit flea markets and garage sales with comparative results. eBay started as a hobby site; now it is the leading online auction site with an annual turnover of more ten billion US$. It accommodates millions of auctions each day with an incredible product range containing piles of items that cannot be found elsewhere. Not only private persons realized the potential of online auction sites, thousands of companies offer their products and services there taking advantage of their popularity. My work is based mainly on personal analysis of the online marketplaces I

describe, the way they operate, the product categories they concentrate on, their main sources of income and the services they offer to their users to smooth the transactions. I compare the marketplaces to each other as well as foreign sites to Hungarian ones, show the pros and cons of each site, analyse which services has been already adopted by Hungarian sites and what should be done in the future to be more effective and user-friendly. With the analysis of financial and selling data gathered either from public sources or directly from the firms running the marketplaces I show the soaring of online auction sites and forecast future trends on this market. http://www.doksihu 9 Introduction E-commerce is becoming more and more important in our life. With the advent of the computer and the Internet, B2B, B2C as well as C2C businesses can be done more easily. The spread of online auctions is also significant. Not only a lot of auction houses and Internet sites dealing originally with

another services decided to join but also the move of conventional retailers is considerable as online selling has became a viable and more and more profitable alternative. My work shows the most important international online marketplaces focusing on online auction sites, describes how they work, what services they offer, analyses their activity, compares them with the Hungarian sites, as well as looks at the extent of the impact that online auction sites are having on electronic marketplaces. http://www.doksihu 10 1 2 1. E - M a r k e t p l a c e s , E - C o m m e r c e a n d I - C o m m e r c e Markets play an essential role in the economy, facilitating the exchange of information, goods, services and payments. They create economic value for all of the participants of the market, ie buyers, sellers, intermediaries and the society at large. Markets match buyers and sellers; smooth the progress of the exchange of information, goods, services and payments for them as well as and

provide an institutional framework, which enables the efficient functioning of the market. The enormous increase in the use of IT and the Internet in recent years have changed the market in many ways. One of the most significant changes is in the manner we conduct business, especially in how we manage the marketplaces and commerce. Although many people think that electronic commerce takes place exclusively on the Internet, it is simply a term for any kind of commercial activity that is facilitated by electronic means. Ie electronic commerce may include ATMs, fax machines, bar code readers, etc. It is the process of electronically buying and selling goods, services and information, which is having bigger and bigger impact on our business as well as private life. “If all financial transactions, whether buying or selling, whether focused either on the business-tobusiness (B2B) or the business-to-consumer (B2C) or the consumer-to-consumer (C2C) market using electronic technology, is

called e-commerce, we can now define i-commerce as all those transactions done via the Internet.” 3 I will focus on this part of e-commerce in my work 1.1 Classification of E-Marketplaces E-Marketplaces can be classified whether they belong to the B2B, B2C or C2C market. Turban suggests that “in B2B we find private sell-side (one seller – many buyer) e-marketplaces, buy-side (one buyer – many sellers) e-marketplaces, and exchanges.” While “in B2C the major emarketplaces are storefronts (a single company’s Web site where products and services are sold) and Internet malls” 4 or e-malls that can be described as an online shopping centre with many shops. However, the author does not mention the C2C marketplaces, the main topic of my dissertation. The C2C marketplaces act as the intermediaries providing the matching services among consumers. Although classified ad sites also belong to C2C marketplaces, their main players are the online auction sites. In the following

chapters I will deal with them in details 1 Electronic Marketplaces Electronic Commerce 3 http://highered.mcgraw-hillcom/sites/dl/free/0070898588/104791/Chapter15pdf, p396 4 Turban, E. et al, Electronic Commerce 2004: A Managerial Perspective, 2004, p39 2 http://www.doksihu 11 2. All about Auctions 2.1 From Ancient Auctions to Online Auctions Before the advent of the Internet era, auctions were the privilege of specialists. It happened rarely that consumers took part in them. The spread of Internet and online auctions changed all that However, they do not offer a revolutionary pricing model. The origins of auctions are not well known but they have roots that go back to ancient Egypt and Mesopotamia. The form of double auction stems from haggling, in which buyer and seller each suggest prices. 5 Auctions have gone through several changes since the first auction held in ancient times. In 500 B.C, in the times of Herodotus, the auctions were for the purpose of selling women under the

condition that they be married after the purchase. Reports note that less attractive women were sold with monetary compensation given to the bidder. The Roman Empire used auctions to liquidate property and estate goods. The auctions were held in the “atrium auctionarium” and functionaries carried out the trading, which was followed by the waves of bidders to indicate a bid. Aside from the earlier accounts of the Roman auctions, they were used also in other civilizations. There also exists evidence of Buddhist monks in China using auctions to fund the creation of temples as it became customary to auction off the property of departed monks. The auction was an important money-raising institution. The earliest reference to the auction as practiced in Great Britain is from the 1595 Oxford English Dictionary, but nothing more is known until the final years of the seventeenth century. At that time auctions were held in taverns and coffeehouses to sell art. It is likely that such auctions

were held daily and that catalogues announcing the availability of certain merchandise, were printed. The first catalogue used for listing items to be auctioned was used in 1717. The firm of Sothebys was established in 1744 and Christies was founded in 1766. The first auctions in America originate back to the early times in the South when slaves were often sold at auction. Often times, the owner of the goods was not disclosed because the current social norms did not look favourably upon auctions. Aside from the early modern records of the use of auctions in Great Britain and America, auctions were used in the Netherlands and Germany as well in the later part of the 19th century. Auctioning in the Netherlands dates back to 1887 when it was used for the sale of fruits and vegetables. Reportedly, a grower arrived at a harbour in North Holland. Upon arrival he realised that the for his produce is strong and instead of liquidating his produce in the usually customary fashion of selling to a

specific dealer, he decided to allow the buyers to compete with each other by using an auction. 5 Friedman, D. & Rust, J, The Double Auction Market: Institutions, Theories, and Evidence Proceedings of the Workshop on Double Auction Markets, 1991 http://www.doksihu 12 In the same year, fishermen in Germany began to use auctions to sell their fish when arriving in port. These fish auctions allowed the fishermen to rapidly liquidate their catch and spend more time on fishing to satisfy consumer demand. 6 Today we can see the results of the seventeenth resurgence of auctions as they have evolved to occurring on the Internet. 7 2.2 Online Auction Sites Like in the classification of e-marketplaces we can divide online auction sites also to B2B, B2C and C2C sites. While B2B and B2C sites existed even prior to online auctions, the online auctions sites revolutionized the C2C relationship. Therefore I will introduce only shortly the B2B and B2C auction sites and focus on C2C auctions.

2.21 B2B Online Auctions B2B auctions were well-known and popular among companies with excess equipments and idle assets, which could be sold for other business interested in them. With the advent of online auction market B2B auction houses went online and listed their offers there to increase their market potential. Others were introduced to markets, which had no established auction outlet The advantage of online auctions was that they removed the outlet stores and liquidators, which were not so effective in selling and charged usually too high commissions. Online auctions offered a structured, attractive, competitive selling process, resulting in better prices for both sellers and buyers. A good example for the B2B auction sites is DoveBid, a global provider of capital asset auction, valuation, redeployment, and management services 8. Besides offline auctions on-location, they offer a variety of online auctions where various idle assets are sold from all over the world that the

companies want to dispose of. Firms interested in excess equipments can study their upcoming sales calendar by date, location, category, etc to find they are looking for. 6 Cassidy, R. Jr, Auctions and Auctioneering, 1967 Engel-Wiggans, R, Shubik,M.,& Stark, RM, Auctions, Bidding, and Contracting: Uses and Theory, 1983 8 http://www.dovebidcom 7 http://www.doksihu 13 2.22 B2C Online Auctions B2C sites are very popular on the Internet. A typical B2C site is a single company’s website where products and services are sold. We can find millions of such sites on the Web, like an online bookstore. Usually they serve as an extension of their real store to have more traffic We can order the products online, pay with credit card and receive the item by post within some days without leaving our home. On the other hand, B2C auctions allowed storeowners to offer their products directly to consumers using auctions. Their great advantage was their popularity With effective marketing tools

they attracted a lot of consumers to the auction site, who spent their money there browsing among the online auctions of the different stores. A typical B2C auction site is uBid.com 9 where customers can bid on computers, electronics, watches, jewellery, home equipments, linens, travel services, collectibles and sport items. Companies offer here their brand-name quality products at wholesale prices, where most auctions start at $1 and come with warranty. While the structure of this site is similar to a C2C auction site, individuals cannot sell on the site, only buy as the number of sellers is limited. Although they use the auction format to sell items, in other aspects they are similar to e-malls, sites where we find numerous online stores. Finally I should note that the difference between B2C and C2C blurs often. On eBay, the major C2C auction site around the world we can find thousands of companies that use the auction site to increase their turnover. The popularity of the site is so

high that companies offer their products even there besides of their online and real store. In the following sections I will deal with the C2C auction sites and show them in details. 2.23 C2C Online Auctions The ability of Internet that it can lure dozens of people to one place – does not matter where are they from – means opportunity beyond example for the online sellers. Plenty of shop owners have already closed their “real” shops and offer their products solely on the Internet. So they save among other things on the maintenance costs of a real shop. Buyers celebrate the delightful atmosphere of online auctions, often so much that the bidding become their everyday passion. A lot of auction sites offer opportunity to discuss their views about their hobby in forums and so meet with another collectors. People who are willing to bid should register themselves on the site, which is for free. Auction sites besides of name, contact information and e-mail address ask sometimes for

bank account or credit card information in order to deduct the selling commission for their service. This is not yet required in the Hungarian auctions sites. After signing in we can start immediately to bid Even the process of auction is not too complicated. With some click we can easily dispose of excess money or sell 9 http://www.ubidcom http://www.doksihu 14 things we do not need anymore and just taking up room. As you can find plenty of people with a huge variety of interest, we can never know whether there is not somebody who is interested in an old license plate from the German Democratic Republic 10 or an old Tesla dial-telephone from 1967 made in GDR. 11 These items are probably completely useless for their seller but for a GDR fan collecting old relics from that country it may mean a treasure. Although there are no bids on these items until now, it means nothing because bids are coming in the last 5-10 minutes on most of the items when the bidders interested sweep down on

the item. This way of bidding is on the Hungarian sites are not prevailing but who “grew up” and experienced on eBay, is likely to do so. It is good for the seller as if he/she finds out an eye-catching title for the item to be sold and writes a detailed description illustrated with photos, there is a big chance that a lot of users will find the auction among piles of other ones, pay attention and place a bid on the item pushing up the price. The owner of the winner bid can be also satisfied if he/she could take the item on the price he/she was willing to pay, which can be even under its value if only a few users notice the auction. I do the same as a buyer. Depending on the speed of the Internet access – to have enough time to place the bid and type in my password – I send my bid often in the last 20 seconds. It is called sniping on the auction sites. By this way I can reduce the chance for other bidders to get above my offer If even so there is somebody who could place a

higher bid, I do not become gloomy because it is more then the price I considered to be reasonable. The briefly but meaty title and a detailed item’s description illustrated with photos is one of the essential conditions of successful selling. The form of auction chosen for selling of our product is another important factor. The classic form of auction can be found on all of the auction sites. Sometimes it is called English auction In this case the seller gives the starting price – which can be even 1 Forint or 1 Penny –, the duration of the auction – varying from 1 to even one 3 weeks depending on the site – and sometimes also the bid increments, i.e the minimum value with the actual price can be increased In this case the winner will be the user who has the highest offer at the time of the auction’s end. This mechanism is highly appropriate for selling unique, special or used items or products at very good price because it helps to sell the good on the highest price. This

form of auction can be extended with reserve price ie minimum price below the seller is not obliged to sell the item. It means also that the seller does not need to have any fear that the product is sold under its price. The “Buy It Now” price is another opportunity for the seller to increase the chance to sell the item. In this case the product can be purchased any time for that particular price, which is of course higher then the starting price. It represents the price, which the seller wants to sell the product on. Who prefer to sell on the conventional way, can sell also at fixed price. This way the seller lets the buyers purchase the item at a set price without bidding. Another form of selling the products is the Dutch auction, which is 10 11 http://cgi.ebayde/ws/eBayISAPIdll?ViewItem&category=8772&item=6172462124&rd=1 http://cgi.ebayde/ws/eBayISAPIdll?ViewItem&category=8768&item=6172191824&rd=1 http://www.doksihu 15 suitable for selling multiple,

identical items on the same time. And finally in the end of the auctions the sites notify the participants in e-mail letting them know the other party’s contact information. Otherwise the users may deal with each other directly without paying the fees for the auction site. Therefore the auction sites usually strongly prohibit any attempt to contact the seller and buy directly the item and they check it frequently with various methods. Upon getting the other’s e-mail address and contact information, the actual transaction depends on the parties. The extent how much the auction sites help the buyer and seller to put forward the transaction varies. The senior auction site, eBay developed numerous services during the long years of existence for improving safety and convenience, all for smoothing the procedure with comparative success. I will show these services in details in the particular sections about the auction sites. Unfortunately these services increasing safety and convenience

are still immature on Hungarian auction sites. However, provided both party want to make business, they have all the opportunity to do that. Problems can occur if one of the parties fails to fulfil his/her duties. Although auction sites let the users know in the general terms and conditions that they act only as an intermediary and are not responsible for the items sold on the side or the behaviour of the parties. Though they may interfere in the transaction to clear the situation or if it not possible indemnify the injured person. This useful service can be also found in eBay. Though in all of the auction sites can be found the feedback system, where both parties can give their feedback, i.e grading about the other party, which shows how much they are satisfied with the other party. So every user can get positive, neutral, and negative feedbacks according to his/her service. A seller possessing a high number of positives means trust and safety for the buyer. Although it cannot avoid

frauds on its own, it can be a good starting point before placing a bid. On the other hand the majority of “frauds” are bona-fide. It may happen that first time sellers without any experience do not describe their items precisely resulting in an embarrassing situation that the product sent to the buyer differs from the one in the item’s description. However, even extreme cases have occurred in the history of online auctions. Somebody wanted to sell his own kidney on the German eBay 12, another user offered her virginhood. Even these ones can be considered as a joke as they do not damage the other party. On the other hand there are attempts to do just the opposite, i.e deliberately wrong somebody The number of phishing scams sent out to users is continuing to increase dramatically. Phishing are e-mails that lure people to bogus websites that appear to belong to real companies. Once a consumer is lured to the bogus website, thieves will ask for personal information such as

usernames, passwords, credit card numbers, etc, in an effort to steal his identity. eBay lunched recently an anti-phising campaign to help its users to avoid to be a victim of phising. There will be always such nasty people trying to get personal information or directly money on the crook from honest Internet users. However, with careful manner they can be 12 http://www.ebayde http://www.doksihu 16 avoided. And Internet companies do their best to help their users in it because they are the ones who bring the profit. Lets say we need to get our hands on a tram, which was carrying thousands of people each day for decades on the streets of Leipzig in Germany. Or a Queen album dedicated personally by Freddy Mercury. Where would we start to look? Probably on eBay where we can hardly mention an item, which cannot be found. Just to mention a current example, where could we bid on the car of the newly elected Pope Benedict XVI? Of course on eBay. It is not a joke The auction of Joseph

Cardinal Ratzinger’s Volkswagen Golf Convertible started on the 25th of April, 2005 on the Germany eBay at 9,990 Euro. The seller is likely to be a young 21-year old man, which suggests his username “gape83”. I have just heard in the news that he bought it on a used car market The lucky seller will earn a fortune with this auction. There are 101 bids on the car up to now, the current price is at 41,564 Euro and there are still six days to close. As closed auctions cannot be viewed on eBay after 90 days, I show this auction here. Figure 2.231 Auction of Pope Benedict XVI’s car on eBayde Source: http://cgi.ebayde/ws/eBayISAPIdll?ViewItem&category=68191&item=4545301886 And now let’s see how has eBay became the world’s online marketplace. http://www.doksihu 17 2.231 eBay – The World’s Online Marketplace eBay was founded in Pierre Omidyars San Jose living room in September 1995. But let’s go back to the beginning to see its evolution. 2.2311 History of eBay

While living and working as a computer specialist in San Jose, Pierre Omidyar met and became engaged to Pamela Wesley, a hobby collector or PEZ candy dispensers, which was loved also by children in Hungary some year before. The dispensers modelled classic cartoon characters and the candy, which came out from the mouth of Mickey Mouse or Donald Duck was also delicious. Although these dispensers were collected and traded by a large community across the US, also in Boston where she came from, she was having trouble finding fellow collectors to trade with in the San Francisco Bay Area. Omidyar decided for establishing a website for direct person-to-person auction of collectible items. He created a prototype on his personal web page (eBaycom), and launched an online service called AuctionWeb in 1995. Since then the PEZ dispenser story has been retold hundreds of times, however, even Omidyar acknowledges that this is the embellished version of eBays founding. Actually, Omidyar was having the

same thing on the brain then other computer technicians in the Silicon Valley: what can be the Internet used for. After a stock purchase, which was done by his broker only later and therefore at a higher price, he though that this was not how a free market was supposed to work. The idea came across his mind that a better market mechanism should be created. His solution was an online auction. He did not know much about how real auctions worked, had even never attended an auction personally. He just considered them as market mechanisms that would naturally create a fair and correct price for stocks or for anything, which somebody wants to sell. He simply proceeded from the fact that if there is more than one person interested in a particular item, let the one win who is willing to pay more for it. And it enables the seller to sell the item at the market price. Omidyar had to do the programming for his perfect marketplace in his spare time He just created categories as they occurred to

him, e.g hardware and software, electronics, antiques and collectibles, books and comics, automotive, and miscellaneous as he had no real idea what people want to sell. The name he chose was as practical as the site itself: AuctionWeb Since it was only a hobby, he offered the services of his auction site for free. As he had no money for advertising, he posted announcements on newsgroups and “What’s New” pages that tracked new sites. And his site started to attract more and more visitors who started also auctions as it was free The word-of-mouth publicity worked also well, computer fans and bargain hunters were sending each other the URL of AuctionWeb lead to steadily increase of traffic. Toward the end of 1995 thousands of auctions were running on his site and it attracted more than ten thousand individual bids. http://www.doksihu 18 Omidyar was still offering the service of his auction site for free because his expenses were almost nothing. However, by the end of 1995 his

page attracted so much traffic that was slowing down the system of his Internet provider. Although AuctionWeb was not a business, in February 1996 his provider began charging him US$250 a month, the rate for a commercial account. Simply out of necessity he started to charge AuctionWeb users final value fees after successful auctions. Soon envelopes with cash started to arrive in his home mailbox. Although the amounts were not large, he realised by the end of February that the sum of amounts received from users exceeded the US$250 charged by the Internet provider. He did not know that it was the beginning of the success story of eBay. Hundreds of envelopes were coming In March revenues rose to US$1,000, in April to US$2,500, in May to US$5,000. In June revenues hit US$10,000 13 At that time Omidyar decided to quit his day job and devoted himself to the auction site. He employed more and more employees because he was not able to deal with the huge traffic alone. In 1997, Omidyar changed

the companys name to eBay and began to advertise the service aggressively. In 1998 when eBay was going public on the New York Stock Exchange, the site had more than a million registered users. As other online ventures came and went, eBay has continued to grow and prosper In 2004 eBay’s consolidated net revenues totalled a record US$3.27 billion, listings reached 14 billion, while the total volume of all successfully closed on eBay’s trading platforms was US$34.2 billion 14, all representing a steep year-over-year increase. eBay is represented all over the world. With eBays vision and global business strategy, the company continues to expand its service and brand abroad. It is not uncommon to hear about eBay users in Germany buying items from users in Australia, or users in New Zealand buying from others in the UK. Currently, eBay has country specific sites in Austria, Australia, Belgium, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Malaysia, the Netherlands,

New Zealand, the Philippines, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan and the UK. Moreover, eBay is also represented in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela in association with the MarcadoLibre sites. 15 The countries can be seen on the following map: 13 Cohen, A., The Perfect Store: Inside eBay, 2002 eBay’s Fourth Quarter and Full Year 2004 Financial Results 15 eBay: Company Overview, January, 2005, p26 14 http://www.doksihu 19 Figure 2.23111 eBay’s Presence Across the World Source: eBay: Company Overview, January, 2005 And the international expansion has not been stopped. eBay announced the launch of eBay Poland (www.ebaypl) 16 The competition is expected to be high if we take into consideration the already existing strong market players like leading online auction in Poland, the Allegro (www.allegropl) It would not be the first instance when eBay would have to go out from the market because of the strong

rival. It occurred also in Japan where Yahoo ruled the entire online auction market and eBay had no chance to reach a potential market share. It will turn out how successful will be eBay in Poland. 2.2312 eBay’s Success in Numbers Often a picture is worth a thousand words therefore I decided to show eBay’s success in details with the help of diagrams where the fantastic growth can be clearly seen. eBay increased the number of registered users from 40,000 in 1996 up to 135 million by the end of 2004 by internal growth and its worldwide expansion strategy. The steep raise of registered users can be seen in the Figure 2.23121 16 eBay Press Release on April 22, 2005: eBay Launches Service for Poland http://www.doksihu 20 Figure 2.23121 Growth in eBay’s Registered Users 1998-2004 Source: eBay: Company Overview, January, 2005 The number of listings on the auction site was 300,000 in 1996 and topped at 405 million towards the end of 2004. This enormous increase by 1350% in

eight years shows the Figure 223122 below. Figure 2.23122 Growth in Listings on eBay 1998-2004 Source: eBay: Company Overview, January, 2005 http://www.doksihu 21 The total value of items sold grew from US$7 million in 1996 up to US$34.2 billion by the fourth quarter in 2004. The continued profitable growth is shown in the Figure 223123 from 1998 to 2004 in the following figure. Figure 2.23123 Growth in Total Value of Items Sold on eBay 1998-2004 Source: eBay: Company Overview, January, 2005 If we divide the fourth quarter data from 2004 of total value of items sold by the number of listings from the same quarter it turns out that the average selling price on eBay was approximately US$84 in the end of last year. However, it is only a rough figure if we take into account that among the millions of items listed there are cheap coins for some dollars as well as rare oldtimers for several hundreds of thousands dollars. eBay is one of the very few Internet companies, which is

profitable from its first month of operation and unique in its success. Just take into account that even in the first month Omidyar had net revenue of more than US$250. It was just the beginning as eBay’s net revenue was US$3,271,000 by the end of 2004. This increase is shown in Figure 223124 on the next page http://www.doksihu 22 Figure 2.23124 Growth in eBays Net Revenue 1998-2004 (in US$000) Source: eBay: Company Overview, January, 2005 & Annual Report 2002 2.2313 How eBay Works 17 First of all we have to register ourselves on the site. The registration is absolutely free and takes only a few minutes. Besides of personal data such as name, address, phone number and e-mail address we have to enter on the American eBay site 18 either our credit card number or bank account information too. Buyers do not pay anything to eBay, it serves only as a proof that your personal information are valid. However, it varies from site to site even on eBay In Germany and on other European

eBay sites we can let eBay send us a letter with confirmation code to the address we entered during registration. Once we get it and confirm our registration by entering the code received by post, we can start to bid. However, for selling we still need to give our credit card number or bank account data to let eBay collect the fees for listing and selling on the site. It is advised to create a separate e-mail address depending on the frequency of bidding or selling. In the registration process we have to choose a user ID too, i.e the name that all other users see And finally we have to enter our password, which is required in the future for all important steps. We can create here also a personal page about us to let the other users know our interests, hobby, items we sell, etc. If we have a personal page, it is signalled by a “me” logo, which can be easily seen after our user ID. It is shown in Figure 223131 17 18 In this section I refer only to the US eBay at http://www.ebaycom

http://www.ebaycom http://www.doksihu 23 Figure 2.23131 Seller Information Source: http://cgi.ebaycom/ws/eBayISAPIdll?ViewItem&category=385&item=3971382162 After the user ID there is always a number with or without a star in brackets. It is the feedback score received after transactions from the other party. Every eBay user has a member profile including a feedback score as well as comments from other users we have bought from or sold to. It is can be seen in Figure 2.23132 Figure 2.23132 Member Profile Source: http://feedback.ebaycom/ws/eBayISAPIdll?ViewFeedback&userid=atsnotes The user called “atsnotes” has currently a feedback score of 2381, which means that the user received positive feedback from at least 2381 other eBay members. The feedback system is very easy. We receive +1 point for every positive comment, 0 points for every neutral and -1 point for every negative comment. Moreover a star with different colours shows also our current feedback score. The

meaning of the colours is shown in the Figure 223133 http://www.doksihu 24 Figure 2.23133 Classification of Feedback Stars Source: http://pages.ebaycom/help/feedback/reputation-starshtml Feedback is one of the most important aspects of trading on eBay. Consistent positive feedback lets other users know that we are honest and dependable. Likewise, too many negatives will turn off buyers and also sellers may have worries to make business with us. Buyers will usually bid more often and pay higher prices if we have a lot of positive feedback. Therefore a strong positive feedback is essential. To collect positive feedbacks as well as experience the best way is to buy some items, which we are interested in. Without buying one cannot become a good seller We can learn from other sellers, which practices are wise to follow and which mistakes should we avoid. All items listed on eBay are classed in well-constructed categories and numerous subcategories. The categorization is essential if we

take into account the enormous number of new listings each day. At this moment more than 14 million auctions are running on eBaycom, which refers only to US. Exact number cannot be told because thousands of auctions start and close each and every minute. The main categories are as follows: • Antiques • Computers & Networking • Art • Consumer Electronics • Baby • Crafts • Books • Dolls & Bears • Business & Industrial • DVDs & Movies • Camera & Photo • eBay Motors: • Cell Phones • Entertainment Memorabilia • Clothing, Shoes & Accessories • Gift Certificates • Coins • Health & Beauty • Collectibles • Home & Garden http://www.doksihu 25 • Jewelry & Watches • Sports Mem, Cards & Fan Shop • Music • Stamps • Musical Instruments • Tickets • Pottery & Glass • Toys & Hobbies • Real Estate • Travel • Specialty Services •

Video Games • Sporting Goods • Everything Else Even from this professional categorization can be seen that eBay is a serious auction site, not to mention the incredible varieties of subcategories. There are several ways to find an item of our interest. We can browse the categories where thanks to the well-done subcategorization everything is easy to find. There is indeed something for almost everyone on auction sites. Other way is to find an item is the use of eBay’s search engine by entering the keyword(s). We can search in titles as well as descriptions and refine our search results These engines are easy to use and mostly effective. We can search items, stores as well as members and sort them by various aspects. Furthermore, there are auction search engines specialized in searching of hundreds of auction site’s listings. A good example is http://wwwasearchde listing approximately 130 auction sites’ items. Once we found an item of our interest it is advised to check

the product description to learn more about it. These points should be checked: • Item description: If something is not clear, we can always ask the seller directly. • Item condition: Each circle has their established grades, which refer to condition. • Transaction terms: o Refund policy of the seller if the item is damaged o Duration of shipment o Payment options o Cost of shipping (almost always the buyer pays for it) o Insurance • Seller profile • Location of the item If there any questions that are not answered by the description we can always contact the seller directly. We need just to click on the phrase “Ask seller a question” By this way you can also appraise who helpful and honest the seller is. If everything is clear we can take our next step, place a bid on the item we are interested in. The bidding process is also easy to understand. By clicking on the button called “Place bid >” the following window appears: http://www.doksihu 26 Figure

2.23134 Place a Bid Source: http://cgi.ebaycom/ws/eBayISAPIdll?ViewItem&category=64355&item=5770526394 In this case the current bid is US$250 for this cell phone, which is at once the opening bid because otherwise US$250 would not be enough to exceed another bidder’s offer. By entering our bid two things happen. We have to type our user ID and password in to confirm our bid and in a short time we will receive an e-mail from the auction site that confirms our bid. However, placing a bid and getting a confirmation does not mean automatically that we will win the item. Depending on the remaining time and the attractiveness of the title and description it may easily happen that somebody places a higher bid then ours. In this case we get at once another e-mail from the auction site with the actual price. Provided we are still interested in the item, we can place a higher bid, minimum the actual price plus the bid increment. This term refers to the particular next step in price

needed to place a valid bid and it gets higher and higher when the item’s price exceeds a particular limit. In other words it “is the amount by which a bid will be raised each time the current bid is outdone. It is predetermined based on the current high bid” 19 These amounts and the bid increments can be seen in the Table 2.23131 19 http://pages.ebaycom/help/buy/bid-incrementshtml http://www.doksihu 27 Table 2.23131 Bid Increments Source: http://pages.ebaycom/help/buy/bid-incrementshtml This means that if the product’s price we are bidding on is currently at US$256 and we place a bid of US$257, our bid will be refused because the bid increment is US$5, i.e we must bid a minimum of US$261 in order to receive a valid confirmation. In case of hot items it may happen that other users outbid our offer several times. A useful and interesting feature of eBay and other auction sites can help us, called proxy bidding. Provided we are desperate to have an item listed on the

auction site, we can place even a much higher bid then the current one without letting other users know our maximum offer. Let’s say we really need the above cell phone that starts at US$250. We are willing to pay even US$320 for this mobile phone What happens if the current price is at US$256 and we enter our offer of US$320? The price will change to US$261, i.e increase by the bid increment that is US$5 between US$250 and US$49999 and the computer will bid for us. Whenever another user bids on the cell phone, the computer will automatically increase our bid to the other user’s offer plus the bid increment and let us know about the bid in e-mail. Should be the interest so high that it exceeds even our maximum offer of US$320, the computer will not bid for us anymore. During looking for an item we can see sometimes after the actual price that the reserve is not yet met. A reserve serves as a minimum price (which is not the minimum starting price) below which the seller does not

sell the item. The amount is secret until it is not met This is why a seller does not have any fear to list a several million years old elephant skull fossil with a starting price of US$1. This item can be seen as an example for reserve price in the following figure. http://www.doksihu 28 Figure 2.23135 Reserve Price Source: http://cgi.ebaycom/ws/eBayISAPIdll?ViewItem&category=3216&item=6528012816 The current bid is US$4,475 and it is still not a valid offer because it is lower than the seller’s reserve price. Once somebody exceeds the reserve the phrase “(Reserve not met)” will disappear and the owner of the highest bid in the end of the auction will win the fossil. This is how reserve price works Sellers use reserve first to do not risk a valuable item to sell it under price, second to create interest. Once a user placed a bid he/she usually starts to feel that the item already belongs to him/her. If somebody overbids him/her, he/she places again and again a higher

bid because of this feeling. Run to the extreme and paying an unreasonable high price because of the auction fever should be avoided. There are small tricks that make the difference in bidding and help us to win the desired item. Users usually bid in round numbers like US$11.00 or US$1550 Therefore it is wise to place a bid with a few cents more than a round number, i.eUS$1103 or US$1552 Sometimes only on these few cents depends whether we win the auction. Another trick is bidding in last minute called sniping that I have already mentioned. In other words do not bid too early and too high It is better to wait until the closing minute and place the bid in the last 20 seconds. After the end of the auction the winner receives e-mail from the auction site with all the important information about the seller and vice versa to contact each other and put forward the deal in the reality. Usually sellers require payment in advance. Once the payment arrived the seller sends the buyer the item via

post or the buyer can take it personally but it is possible usually only if both party lives in the same city. It this rare case even the payment can be given personally Payment can be done in many ways depending on the country where the seller and buyer are. In the US the most popular methods of http://www.doksihu 29 payment are checks, money orders, credit cards, cash on delivery (C.OD), PayPal or eventually escrow service. While the first means of payment are evident, I will deal with PayPal and escrow service in the next section. Now after the introduction to the basics of eBay I would like to show the types of auctions in details. The typical auction is the classical, sometimes called English auction where the winner takes the item. Though there are another more special auctions whose system may not be clear at first sight: • Reserve auctions I have dealt with this kind of auction already in this section in detail. • Dutch auctions They are for selling multiple,

identical items on the same time. Provided we want to sell 10 rainbow pencils with rubbers, we can list them 10 times or we can put them all in a Dutch auction. Sometimes it is useful to put the items in separate listings to achieve higher prices but it can be very time consuming and we rather turn to Dutch auction. However, there are some rules to be taken into account:  No reserve price is allowed  No proxy bidding is allowed  Available only for sellers with a feedback score of more than 50 The winners in a Dutch auction buy the item at the lowest successful bid. To understand it better I show it with an example in the following figure. Figure 2.23136 Dutch Auction Source: http://cgi.ebaycom/ws/eBayISAPIdll?ViewItem&category=11835&item=7511814416 http://www.doksihu 30 Provided there will be 2 bidders for the 10 available items and they place the following bids: • Bidder “A” bid for 7 items at AU$3.00 20 of each • Bidder “B” bid for 4 items at

AU$3.50 of each In the above case the lowest successful bid will be AU$3.00 Therefore the outcome of the auction is as follows: • • Bidder “B” wins 4 items at AU$3.00 • Bidder “A” wins 6 items at AU$3.00 Buy It Now Auctions When we see the “Buy It Now” logo next to the listing or on the item page, we can purchase the item instantly for the given price without waiting for the end of the auction. The following figure shows this opportunity Figure 2.23137 Buy It Now Source: http://cgi.ebaycom/ws/eBayISAPIdll?ViewItem&category=44938&item=6764314517 2.2314 Services Offered by eBay eBay offers numerous services and features to help to sell our items and ease the transaction. Although they are not for free, they increase the chance to sell our item at a good price. 20 Australian Dollars http://www.doksihu 31 2.23141 Listings While browsing and buying are free of charge, selling is not. eBay charges insertation fees after listing our items as well as

final value fees once it is sold. The total cost of selling an item is insertation fee plus the final value fee. Let’s see what kind of fees should we pay and what do we get in exchange • Insertation Fees Although there are auction sites that do not require paying insertation fees, on eBay it is not the case. We have to pay for listing our items depending on its starting price They are charged as a percentage and not refundable. If the auction closes without any successful bid, we loose this money. The insertation fee is based on the starting price of the item as follows: Table 2.231411 Insertation Fees Source: http://pages.ebaycom/help/sell/feeshtml For Dutch auctions – when we list multiple items – the insertation fee depends on the opening value of the items, i.e the starting price multiplied by the quantity of the items Items listed in the Business & Industrial category; real estate, timeshare, land as well as vehicles are subject to other fees and are shown in the

following tables. Table 2.231412 Insertation Fees in Business & Industrial Category Source: http://pages.ebaycom/help/sell/feeshtml http://www.doksihu 32 http://www.doksihu 33 Table 2.231413 Insertation Fees for Real Estate, Timeshare & Land Source: http://pages.ebaycom/help/sell/realestatefeeshtml Table 2.231414 Insertation Fees for Vehicles Source: http://pages.ebaycom/help/sell/motorfeeshtml http://www.doksihu 34 • Final Value Fees If the item sells, we are also charged a Final Value Fee as a percentage that is shown in the following table. Table 2.231415 Final Value Fees Source: http://pages.ebaycom/help/sell/feeshtml For Dutch auctions the Final Value Fee is calculated by taking the Final Value Fee of the lowest successful bid and multiplying it by the number of items sold. • Optional Feature Fees While the above fees are essential to list our item, there are optional features to help increase bids and the chances to sell the item. o Reserve Price As we

have already discussed reserve price helps to stimulate bids because we can start the auction even on one cent while we do not have to sell the item under the reserve price and take the risk of selling the item under the price we desire. The cost of this feature is shown below http://www.doksihu 35 Table 2.231416 Reserve Fees Source: http://pages.ebaycom/help/sell/feeshtml o Buy It Now As already discussed, buyers can purchase the item in this case instantly for the given price without waiting for the end of the auction. To use this feature, we have to possess at least 10 feedback ratings and pay the following additional fees when we list our item: Table 2.231417 Buy It Now Fees Source: http://pages.ebaycom/help/sell/feeshtml o Listing Upgrade Features  Gallery Advantage of gallery items is that they stand out in the list with a photo, which is clearly seen below. Figure 2.231411 Gallery http://www.doksihu 36 Source: http://www.ebaycom  Listing Designer Listing Designer

helps users who are not experienced in HTML by adding attractive themes and layouts to the listings and so creating a professional lookout.  Item Subtitle With Item Subtitle we can give additional, more descriptive information to the buyers about our item beyond what would fit in the limited space of the title. Moreover it stands out in the list of items, which can be seen below. Figure 2.231412 Item Subtitle Source: http://www.ebaycom  Bold Option The function of this feature is the same, attracting attention on our item. We can see it on the following figure. Figure 2.231413 Bold Option Source: http://www.ebaycom  Scheduled Listings This feature gives us the convenience to list our item at anytime starting at the time we want. So we can list our item even in the afternoon, which will start and end in the evening, in the peak time when the potential buyers are more likely to be online.  10 Day Duration http://www.doksihu 37 We can list our items for 1, 3, 5 and

7 days. However, if we want to gather more attention and list it for 10 days, for an additional fee we can do it. http://www.doksihu 38  Gift Services If we consider that our item is suitable for a gift too, we can let the buyers know and list it with an eye-catching gift icon shown below. Figure 2.231414 Gift Services Source: http://www.ebaycom  Border This eye-catching feature impales our listing with a coloured band to stand it out as it is shown below. Figure 2.231415 Border Source: http://www.ebaycom  Highlight This feature makes our listing more attractive with a coloured band, which can be seen in the next figure. http://www.doksihu 39 Figure 2.231416 Highlight Source: http://www.ebaycom  Featured Plus! This useful feature assures the stand out in search results as well as in the category listings by listing it featured prior to normal listings. If a buyer browses in the category where our item is, he/she can see it for sure because of its prominent

place among the featured items as we can see in the following figure. Figure 2.231417 Featured Plus! Source: http://www.ebaycom http://www.doksihu 40  Gallery and Homepage Featured To attract even more attention we can use these features. Besides being always prior to the normal listings in these cases our item will appear also in the special featured section above the general picture gallery and in case of Homepage Featured our item will rotate in the special display on eBay’s home page as it is shown in the next figure. Figure 2.231418 Homepage Featured Source: http://www.ebaycom  List in Two Categories This feature let more buyers see our item and generate more interest in it as our item can be found in both categories. As we can see the above features emphasise our item and so create bigger interest in it, which raises the chance to sell the item at a good price. Their costs contain the following table. http://www.doksihu 41 Table 2.231418 Listing Upgrade Fees

Source: http://pages.ebaycom/help/sell/feeshtml o eBay Picture Service While the first picture is always free of charge in the listing, for each additional photo as well as special picture features we have to pay. The Picture Show serves as a slide show where our pictures run. Supersize Pictures let the bidder see our item see in high resolution XXL picture, in 800x600 pixels that allows a closer look on the item. The Picture Pack offers us the maximum exposure Here we can add up to 12 pictures to our auction in XXL size with Picture Show, moreover, our item is placed also in eBay Gallery. These features costs are as follows. Table 2.231419 eBay Picture Service Source: http://pages.ebaycom/help/sell/feeshtml http://www.doksihu 42 2.23142 Seller Tools The more auctions we start the most time do they consume. After an extent it is worth to use an auction manager program, which helps us to list, follow and get through our numerous auctions. eBay offers a several selling manager tools

with different features designed for different needs. They all help make us much more efficient at listings and managing our sales. eBay’s basic listing tool called Turbo Lister saves time and helps us selling more by creating professional looking listings, managing and organizing our listings quickly and uploading thousands of items in bulk. We can use it alone or in combination with other already prized sales management tools with more useful features. The Selling Manager, Selling Manager Pro, Seller’s Assistant Basic and Pro beyond the above features show which post sales activities should be done, contains e-mail and feedback templates to communicate more effective with the buyers, allows bulk relist, printing of invoices and shipping labels directly from sales records, inventory management, which reminds us when our inventory is out of stock, free listing designer, etc. While the Turbo Lister is free of charge, the more serious selling manager programs can be tried out also

during the free 30-day trial. After it we have to pay the following monthly fees: Table 2.231421 Seller Tools Source: http://pages.ebaycom/help/sell/feeshtml 2.23143 Paypal PayPal enables us to send payments quickly and securely online using a credit card or bank account. We can sign up for an account on the site. Besides giving our personal data and e-mail address that will serve as an online bank account number, we can choose how we would like to fund our PayPal account. Alternatives are bank account or credit card Once the registration is completed, our PayPal account is ready to receive and send payments to any eBay user who accepts PayPal. Paypal has many advantages. The transfer occurs immediately and it is convenient, the status of our transfer is traceable, by using credit card our card number is in secret and the other party sees only our e-mail address and http://www.doksihu 43 last not but least PayPal offers buyer protection. With PayPal Buyer Protection, qualified

purchases are eligible for up to US$1,000.00 coverage at no additional cost In PayPal there are personal accounts as well as premier and business accounts with more features. While the personal account is free of charge, it cannot accept debit or credit card payments. However, when we decide to choose a premier or business account to offer more convenience in payment for our buyers, PayPal charges commission after receiving payments. The fees charged by PayPal are showed below. Table 2.231431 PayPal Fees Source: http://www.paypalcom/cgi-bin/webscr?cmd= display-fees-outside 2.23144 Standard Purchase Protection Program If a buyer did not receive the paid item but the payment was not done via PayPal, he/she can claim for indemnification too. This protection program reimburses buyers for eligible transactions when a product was purchased on eBay and paid but either not received or was received but significantly not as described. “The maximum reimbursement for any claim is US$175” 21

This feature makes the transactions more secure for the buyer. 2.23145 Escrow Service This special service means perfect security for both buyer and seller. Escrow is available for any purchase but typically is used for purchases of $500 or more. It does not make any sense in case of cheap items as the service is quite expensive as it can be seen in the following table. 21 http://pages.ebaycom/help/tp/esppp-coverage-eligibilityhtml http://www.doksihu 44 Table 2.231451 Escrowcom Fees Source: https://www.escrowcom/support/calculatorasp Though it protects buyers and sellers from fraud. The buyer sends the payment to the escrow company that notifies the seller that payment is received and the product can be sent to the buyer. Once the buyer receives the item and confirms to the escrow company that it is in order, the seller gets the money from the company. eBay strongly recommends to use its approved escrow service called Escrow.com as unfortunately there are fraudulent escrow

services too 2.23146 ID Verification To get ID Verified through eBay is an extra sign of security for buyers. If we decide to get ID Verified, a company working together with eBay confirms the members identity by cross checking their contact information across consumer and business databases. It is not a credit check, it establishes only a proof of identity. ID Verified members have an advantage that next to their username and feedback score even an ID Verified logo with a characteristic check-mark appears. The cost of the verification is US$5 22, deducted from our eBay account. 2.23147 eBay Store Advanced sellers may consider opening their own eBay store. This feature was introduced in June 2001. In our professional-looking store we can show all of our items categorized and tell the buyers more about our business and activity on our own customized pages. We get our own web address so we are able to drive our buyers directly to our store. We get free monthly sales and traffic reports

with graphical analysis. Disadvantage of store items is that they cannot be found in regular search results in eBay. However, as I have already mentioned earlier there are auction search engines specialized in searching of hundreds of auction site’s listings and they are able to search and list even in eBay store items. Although the maintenance of an eBay store alone is not a good idea, it may integrate completely our eBay business provided we use it smartly. If we keep listing eye-catching items with wellsounding titles on eBay, we can drive the traffic directly to our eBay store as save a lot on insertation fees. Just take into account that listing an item in our store costs just US$002 for 30 days and the starting price does not matter while the insertation fee for an item starting at US$1 costs US$0.35 and 22 http://pages.ebaycom/help/sell/id verifyhtml http://www.doksihu 45 the duration is limited for 7 days. In our eBay store we can list our expensive items without paying

any additional fee. If we list hundreds of items each month we can save tremendous amount of money Moreover, the listing upgrade features and the picture service costs also much less. And once a buyer won an item or purchased something he is likely to seek for more items to save on postage. Even eBay’s Cross-Promotional Tool helps us drive the buyers to our store. After the item description of our each and every auction there are pictures showing our further items. We can set which items are shown and once the buyer clicked on it, he/she is already in our store with hundreds of other items listed for a very low fee. Moreover, after placing a bid the buyer comes again to a page where out cross-promoted items are shown. Although we have to pay a monthly fee for our shop and the final value fees are a bit higher compared to normal listings, the first 30 days are for free of charge and with a bit creativity and smartness we can double our traffic on eBay and save a lot. In order to see

the difference in fees in the next tables I show the cost of an eBay store. Table 2.231471 Store Insertation Fees Source: http://pages.ebaycom/help/sell/storefeeshtml Table 2.231472 Store Final Value Fees Source: http://pages.ebaycom/help/sell/storefeeshtml http://www.doksihu 46 Table 2.231473 Store Listing Upgrade Fees Source: http://pages.ebaycom/help/sell/storefeeshtml Table 2.231474 Store Picture Services Fees Source: http://pages.ebaycom/help/sell/storefeeshtml 2.23148 eBay Live Auctions Besides of its millions of auctions eBay offers even live auctions and let us join and participate in auctions on the floors of some of the world’s greatest auction houses. Without being there we are able to bid on these items too in live at http://www.ebayliveauctionscom Even the categories suggest that these auctions are for advanced users: • Antiques & Decorative Arts • Entertainment • Art • Jewelry & Timepieces • Automotive • Real Estate • Books

& Manuscripts • Sports • Coins • Stamps • Collectibles & Memorabilia • Wine • Dolls & Toys • Everything Else http://www.doksihu 47 Buyers can browse in the list of coming auctions and sign up for the particular auction of interest to be able to participate. 2.23149 eBay Toolbar Users can download and install the eBay Toolbar to the browser desktop, which offers many useful features. We can search for items, be alerted when an auction of our interest is going to close, reach eBay’s home page, the eBay stores, etc. This feature is for free of charge 2.231410 eBay Giving Works Fee Donation Policy The eBay Giving Works program is dedicated for charity listings on eBay. When we sell a Giving Works item and donate 100% of the final sale price to a member non-profit organization, eBay will donate the insertion and final value fee to the non-profit organisation selected in the listing. 23 2.231411 eBay Affiliate Program Within the frame of the

affiliate program eBay pays commission for anyone who places eBay’s banner on his/her website or promotes eBay in other ways and drives new active users to the site. Affiliates get up to US$13 24 for each new active user signed up in eBay. 2.231412 eBay University The aim of eBay University is to teach its users the way to sell on eBay. The first classroom was organised in June 2000 and since then they are held regularly. eBay experts and experienced power sellers who can answer any question hold the classes. We can visit one of the regularly held university classrooms across the US or take an online course from our home. Classrooms are held from 900 am to 330 pm and cost US$59 25, while an online course cost US$19.95 26, which is available on CD-ROM available for the same price in the eBay Shop. 2.231413 The eBay Shop 27 eBay offers for its fans clothes and accessories like t-shirts, pullovers, caps as well as home and office gear like mugs, umbrellas, key rings, pens, all with the

famous eBay logo. 23 http://pages.ebaycom/help/sell/givingworks-fee-policyhtml http://pages.ebaycom/help/sell/affiliate-programhtml 25 http://pages.ebaycom/university/classeshtml 26 http://pages.ebaycom/education/ebayuniversityonline/ 27 http://www.theebayshopcom 24 http://www.doksihu 48 2.2315 eBay Germany 28 eBay Germany is the first site established in Europe by eBay and today the most important European eBay site with the largest number of registered users and items listed and the biggest profit. 2.23151 History of eBay Germany 29 The success story of the German eBay started with the establishment of the company alando.de AG in February 1999. In March alandode started its online activity and became quickly the leader C2C Internet auction platform in Germany. In June alandode merged with eBay and became the eBay marketplace for the German-speaking area and starting point of all German-speaking eBay sites 30. At this time the site had more than 50,000 registered user. While

the “Buy It Now” feature was introduced in November 2000 in the American eBay, the eBay Germany started it in June 2001 called “Sofort-Kaufen!” After the successful introduction of eBay Stores on the American eBay, eBay Germany started to offer eBay Shops from October 2001. From March 2002 eBay Germany introduces the auction format at fixed price, which was followed by eBay US only four month later. In May 2002 took place the first eBay University in Germany In November 2003 eBayde became the most popular site in Germany. In April 2004 eBay took over the site mobilede to sell cars, motorbikes and accessories at motors.ebayde In June the worldwide online payment system PayPal was integrated to ebay.de to let also German users pay via PayPal And eBayde keeps growing 2.23152 eBayde’s Success in Numbers Since its start in 1999 eBay Germany multiplied all its key financial indicators. The total value of items sold in 2004 was US$7.6 billion In the 4th quarter of 2004 alone more

than 80 million items were listed, while the average number of items is around 4 million. Another interesting data is that German Internet users spend 12.5% of their online time on eBay The growth of total value of items sold on German eBay is also stemless. Although the following figure shows only the 3rd quarter’s data of each year, not the full year’s figure, the steep growth is even so evident. 28 http://www.ebayde http://presse.ebayde/newsexe?typ=MS 30 eBay Austria (http://www.ebayat) and eBay Switzerland (http://wwwebaych) 29 http://www.doksihu 49 Figure 2.231521 Total Value of Items Sold on eBayde 2000-2004, Q3 (million US$) Source: http://presse.ebayde/newsexe?content=FD 2.23153 Characteristics of eBayde Thanks to eBay’s international expansion philosophy all eBay sites around the world have the same design. The features and services offered by various sites depend on their development status While smaller sites of smaller markets like eBay.se in Sweden do not have

so big variety of service like eBay.com, eBay Germany do not have to be ashamed The scale of its service and features offered for its users are as large as on ebay.com Of course the fees for services are different, also because of the fact that everything runs in Euro, but roughly the same fees are charged if we convert them to US$. Therefore I do not want to list all of the services again, just mention some differences, which are mainly country-specific. As the usage of credit cards is Germany is not so common like in the US, the payment of commission occurs normally with bank transfer. Also the ID Verification occurs with the help of the German Post 31 and usually not with the help of our credit card. Unique service on eBay.de is the work of sales agents, who help for less experienced users or for nonInternet-users in selling their excess items for a small commission, which is normally 5-10% depending on the selling price. They are likely to sell our item at the highest possible

price because of their experience and smartness. As these agents are also eBay users, theoretically everybody can become an agent provided he/she comply the safety conditions. 31 Deutsche Post http://www.doksihu 50 2.2316 Competitors of eBay Currently eBay has very low direct competition. There are hundreds of auctions sites around the globe but none of them can compete with eBay’s popularity and its quality services. They may mean competition only in the market of a particular country. Just take the case in Poland where eBay started recently its auction site in a situation where Allegro.pl is the strongest online auction site with considerable market share. However, usually it is not the case Where eBay has its country specific site, normally dominate the market, like in Germany for example. There are small auction sites but they are not able to compete with eBay. In the US market the only auction sites worth to mention as possible competitors are Yahoo! and Amazon.com Yahoo!

32 is mainly an Internet portal with numerous features. One feature is the online auction called Yahoo! Auctions 33. Although they started this service too, it does not belong to their core activity The structure and functioning of auctions are similar to eBay but if we compare the items listed, it becomes clear that they Yahoo! does not mean competition to eBay. There are exemptions but only a few, like in Japan, where Yahoo! dominated the market almost the entire market at the time of eBay’s appearance and it turned out soon that eBay has no chance to lure significant share of users from Yahoo! The other company, Amazon.com sells mainly used and new items at fixed prices in non-auction format So it can be classified as an e-mall with the difference that also individuals can list their items to sell. On the other hand, search engines can mean indirect competition. Buyers looking for bargains not necessarily in auction form can use search engines to quickly locate the lowest-priced

items on the Internet. While we can find everything with Google 34, there are search engines specialized in comparison of prices of any product we are looking for. 32 http://www.yahoocom http://auctions.shoppingyahoocom/ 34 http://www.googlecom 33 http://www.doksihu 51 2.232 The Online Auction Market in Hungary After the astonishing success of eBay, there were several attempts to introduce the C2C business and online auctions in Hungary with comparative success. Several sites started in the early years have closed their sites already because of the lack of interest. On wwwkalapacshu we can find now a completely other site, while the URL of www.netauckiohu does not exist anymore There are currently also sites, which won’t exist in the next year in my opinion. Although on wwwarvereslaphu and www.licithonorhu we can find a working platform able to list auctions, we can hardly find a running auction, not to mention the lack of bids. On wwweeebidhu there are about 700 running

auctions besides the offering of a CD store with more than 14,000 listings at set prices, however, the seller does not reply on questions, mails, even when we win an auction. We can find sites, where several strategic changes occurred, like www.axiohu The site started with online auctions in 1999. Later it started to deal in renting online stores and the number of auctions dropped significantly. Recently, however, the site changed its name to Axio Art and deals only in antiques, arts, collections, jewellery and old books and furniture. They became a B2C auction site listing the items of famous Hungarian auction houses like BÁV Rt. Aukciósház, Polgár Galléria és Aukciósház, etc Common characteristic of these sites that they appeared early on the market and because of the lack of interest they either stopped their activity or changed strategy. One of the barriers hindering the spread of online auctions in Hungary is the lack of use of credit cards, which is the most common method

of payment in the US and also popular in Western Europe. In the growth of online auction market is a serious barrier when the cash on delivery is the only possible method of payment. A lot of buyer asks for shipping the item they won on COD because of the lack of trust Later, when they have more experience and get to know a seller, they do not hesitate to do a bank transfer and pay in advance. The majority of Hungarian Internet users afraid of auctions like rather another form of C2C business, namely the online classified ads. Apronet, the leading Hungarian classified ad site, attract 18,000 people each day on the average 35. The site has usually more than 65,000 ads33, and each day 3000 new ads are posted. Although the site introduced the ads placed in auction form too, mere 10% of the sellers used this way of listing. Now we do not find any auction 35 http://www.apronethu/stuff/mediaajanlattdp http://www.doksihu 52 2.2321 Vatera – The Leading Hungarian Auction Site In spite of

all these predominantly negative tendencies Vatera 36 exists continually and keeps growing. Private persons founded Vatera in December 2000. Erik Csupor, the director of Vatera Hungary Kft and Szabolcs Valner, the regional director are optimistic as since last year the company is profitable. It could be reached only with strong and strenuous work and great losses during the first 3.5 years They trust to this model, which proved to be successful in the US, Europe and Asia, taking into account the typical East European mentality that everybody is looking for bargains. It is justified by the investment of US$650,000 in the Hungarian, Czech and Polish Vatera in the summer of 2002 37. Vatera dominates 90-95% of the Hungarian market according to their own surveys. The number of registered users is growing continuously and in the end of 2004 it reached 57,66635. This growth can be seen in the next figure Figure 2.23211 Growth in Vatera’s Registered Users 2001-2004 Source: Information from

Vatera.hu 36 37 http://www.vaterahu Information from Vatera.hu http://www.doksihu 53 The same can be said about the number of listings in Vatera, which topped at 940,000 in 2004 while 33 the items sold exceeded 100,00033 last year. The growth in the number of items sold on the site is shown in the next figure. Figure 2.23212 Growth in Number of Items Sold on Vatera 2001-2004 Source: Information from Vatera.hu The most astonishing growth occurred in the total value of items listed on Vatera. While it reached 316,398,891 HUF 38 in 2003, it topped at 1,217,510,209 HUF34 which is a 385% growth within a solely year. The following figure shows this steep rise 38 Information from Vatera.hu http://www.doksihu 54 Figure 2.23213 Growth in Total Value of Items Listed 2001-2004 (in 000 HUF) Source: Information from Vatera.hu The outstanding growth is mainly due to the interesting combination of cheap or unique products in the listings, which cannot be found elsewhere. It lures a lot

of people who will visit the site frequently to follow the auction and look for other bargains. And in spite of the astonishing results, Vatera’s aim is the continuous expansion. 2.23211 How Vatera Works As all the existing auction sites around the world can be derived from eBay, the ancestress of online auction marketplaces, no wonder that they are similar in their functioning and structure. Of course the number and exaction of their services are different, depending on the seriousness of the maintainer and the extent of investment, though the basic structure is always the same. Usually newly created auction sites cannot attract enough Internet users to establish a functioning marketplace because of the lack of services of quality and users are more likely to visit another already well-running auction sites, like Vatera. The leading Hungarian auction platform gained enough experience during its 4.5 years of existence, not to mention the tremendous amount of money invested in the

company for marketing and infrastructure. Because Vatera based on the same idea like eBay and offers more or less the same services, I would like to just list them and deal with the differences more detailed. http://www.doksihu 55 The registration process is much easier in Vatera compared to eBay. During the free registration we have to give only our personal data like name, address, phone number and e-mail address, choose a user ID and password. Credit card or bank account data is not compulsory at all We may give our bank account data to let the company deduct the commission after the sold items directly from our Hungarian bank account but we can pay with postal order or bank transfer upon receipt the invoice. On the one hand privacy is good, on the other hand can lead to frivolity of buyers. They can give false data in the registration and bid on several items just for fun without payment without any serious consequences. Once they collected too much negative feedback scores

from the angry sellers, can create another username and continue their deteriorative activity. Fortunately it happens rarely Vatera has the same feedback system like eBay. The feedback score is showed also with stars but in a different way. The following figure shows how Figure 2.232111 Classification of Feedback Stars on Vatera 39 Source: http://www.vaterahu/info/visszajelzes 39 „közötti pozitív visszajelzésnél” in English: between and positive feedback score http://www.doksihu 56 Vatera has also well-constructed category structure with numerous subcategories, which is continuously expanded. At this moment more than 71,000 auctions are running on Vatera Of course exact number cannot be told because of the frequent start and close of auctions. The main categories are as follows: • Antiques & Arts • Consumer Electronics • Baby • DVDs & Movies • Books & Magazines • Cars & Motorcycles • Business & Industrial • Sport &

Health • Camera & Photo • Home, Office & Garden • Cell Phones • Jewelry & Watches • Clothing & Fashion • Music • Coins & Banknotes • Stamps • Collectibles • Toys • Computers • Everything Else Vatera’s search engine works the same too, we can items, stores as well as members and sort them by various aspects. The bidding process is also the same, we can use proxy bidding too, however, the bid increments are different. These amounts and the bid increments can be seen in the following table. On Vatera, however, sellers can set their desired bid increments too Table 2.232111 Bid Increments on Vatera Source: http://www.vaterahu/help/buyers guidephp#buy3 Reserve price can be used also on Vatera, called minimum price. The payment takes place usually also in advance. The most popular methods of payment is cash on delivery (COD) because of its safety, bank transfer and if the parties come from the same city, cash in a

personal meeting, where the buyer gets also the item purchased. On Vatera we can find the same types of auction like the classical English auction, Dutch auction, reserve price auction and Buy It Now auctions extended with a “Flash Price” how Vatera it calls. http://www.doksihu 57 http://www.doksihu 58 2.23212 Services Offered by Vatera The services, which Vatera offers for its users are also very similar to eBay’s. While the major differences are shown in the following section in details, the similar services are just listed. • Listings on Vatera Although Vatera’s main source of income comes from sellers, the auction site does not charge fees for listing an item, i.e there is not insertation fee like on eBay and sellers has to pay fee only after items sold. Even this final value fee was introduced after 35 years of existence of Vatera. There was a great disgust among the bigger sellers, however, each of them agreed that Vatera could not maintain itself and offer

quality service from nothing. Vatera introduced the fee in a very friendly way. They invited all the power sellers to a cosy pub, discussed all the details and took into account the opinion and suggestions of sellers. o Final Value Fees Sellers are charged only with final value fee as a percentage that is shown in the following table. Table 2.232121 Final Value Fees on Vatera Closing Price Final Value Fee Item not sold No Fee Below 20,000 HUF 6% of the closing value (max. 1,200 HUF) 20,000 - 100,000 HUF 1,200 HUF plus 4% of the remaining closing value balance (max. 4,400 HUF) 100,000 - 250,000 4,400 HUF plus 3% of the remaining closing value HUF balance (max. 8,900 HUF) Above 250,000 HUF 8,900 HUF plus 1.25% of the remaining closing value Source: http://pages.ebaycom/help/sell/feeshtml balance http://www.doksihu 59 o Optional Feature Fees In Vatera the cost of optional features is not so high. The next table shows it in details. Table 2.232122 Optional Feature Fees on

Vatera Optional Feature Fee Bold Listing 125 HUF Item in the beginning of the listings 40 125 HUF Lengthening the auction with 5 minutes 90 HUF Gift icon next to the item 40 HUF Item listed in the weekly newsletter 1600 HUF Item showed on the homepage Upon agreement Source: http://pages.ebaycom/help/sell/feeshtml New feature on Vatera is that our auction lengthens with 5 minutes if in the last 5 minutes a bid comes. It serves in the situation when a lot of bidders want to buy the item and they send their offer in the last minutes to win the auction. Another useful feature is the appearance in the weekly newsletter sent the thousands of Vatera members. It means a good publicity, which increases the chance that our item will be sold for a good price. While on eBay sellers have to pay additional fees for reserve price and buy it now price, it is for free on Vatera. Even gallery pictures are for free of charge and we can place up to 3 high-resolution pictures in the item

description. Contrary to eBay, in the duration of listings we get a much bigger variety. We can list our items for 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 days as well as 2 and 3 weeks and none of them cost extra fee. 40 Correspond to the Featured Plus! in eBay http://www.doksihu 60 o Seller Tools  Power Seller Tool Vatera has also its own Power Seller Tool, which helps sellers to list multiple items on the same time, managing and organizing our listings quickly.  Vatera Shop Like on eBay we can open our store on Vatera too. The monthly fee for a Vatera store is 5000 HUF + VAT 41. Although it is quite expensive, it offers more than a basic eBay store. Contrary to eBay, the final value and optional feature fees cost the same but the store items are listed automatically on Vatera too among the normal listings. Storeowners get their own URL address, which can be accessed directly from the Internet without browsing the auctions. Another advantage is that buyers can view and browse our

items in a well-categorized designed structure.  Vatera Premium Shop The opening of a premium store cost 300,000 HUF + VAT, however, it offers unique service. Sellers who choose this store can sell items in the auction format of Vatera on their own well-running and/or popular website. Great advantage that the items are listed automatically on Vatera too, which means extra publicity. o Vatera Academy Like eBay Vatera offers classrooms for novice users to widen their knowledge and learn new tricks how to sell more effective on Vatera. The approximately 6 hours session costs 5000 HUF 42, where participants have chance to talk with experienced power sellers too. 41 42 http://www.vaterahu/info/dijtablazat http://www.vaterahu/szolgaltatasok/vatera akademia http://www.doksihu 61 o Corporate Auction Solutions Like eBay, Vatera offers also a variety of services for companies: • “Sales solutions over the internet o Internet retailing for retailers (B2C) o Internet retailing for

private individuals (C2C) o Liquidation solutions for excess inventory and older products (B2C) o Closed auctions for distributors (B2B) o Internal asset auctions for corporations (B2C) o IT asset liquidations for corporations (B2C and B2B) o Car fleet liquidations for corporations (B2C and B2B) o Procurement auctions (B2B) • Sales infrastructure solutions o Vatera shop o Vatera premium shop o Internet auctions platform o Closed internet auctions platform o Procurement auctions platform o Credit card module o Chat customer service module o Intranet module o SMS module o Power seller tool o Complete website designs • Auxiliary services o Overall auction management o Preparing product descriptions o Taking photos and editing digital pictures o Logistics framework contracts o Logistics execution o Collections management o Invitations to auction partners o Organizing marketing campaigns and new products introductions o Training for corporate staff o Training for buyers o Vatera

Academy http://www.doksihu • 62 Marketing services o "One forint auction" to introduce new products and new services o Vatera newsletter and direct email o Vatera banner advertising o Vatera category-sponsoring o Vatera-shop advertising opportunities o Index yellow box advertising o Portal order forms o External direct email campaigns o "Workplace shopping" email programmes o Overall design and execution of marketing programs” 43 2.2332 TeszVesz – Competitor of Vatera? TeszVesz started its auction site on the 10th of January 2005 44. The main aim of the newly established Hungarian-Polish joint venture is the expansion and to be the leader of the Hungarian auction market. Currently there are approximately 18,500 running auctions on TeszVesz, which is well below the number of items listed on Vatera in the average. However, if we take into consideration, that the site exists only since January this year, it is a nice result. In some years TeszVesz may be a

real competitor to Vatera as it is backed by the leader 45 Polish auction site, Allegro.pl 46 TeszVesz uses the same auction platform and offer the same services like Allegro.pl It means a great advantage as they could sweep into the market with quality service and they can focus on marketing activity to lure more and more new users. 2.2333 The Future of The Hungarian Auction Market According to the regional director of Vatera, Szabolcs Valner’s expectations, TeszVesz will cut a 1020% 47 market share from the Hungarian online auction market. Currently Vatera dominates the market with its current market share of 97-98%44 according to their own estimation. The Hungarian online auction market has a very high growth potential. The overall growth was about 200% last year in the online auction market, while e-commerce increased only by 50%44. The majority of Hungarians has never tried this form of buying and selling. And who has already tried it, becomes immediately attached to online

auctions. 43 http://www.vaterahu/info/index eng http://www.teszveszhu/country pages/93/0/marketing/pressphp 45 http://www.hwswhu/hirphp3?id=28827&count21=1 46 http://www.allegropl 47 http://www.hwswhu/hirphp3?id=28827&count21=1 44 http://www.doksihu 63 Conclusion In my work I picked out the major online auction sites in the US, Germany and Hungary. I showed in details how they work, what kind of services they offer and how much they cost. After analysing the financial data of each site it became evident that the business model is sound and the online auction business is still in its build-up phase. eBay is growing from year to year with giant strides and expanding its business to overseas markets, where the market potential is even bigger than in the US. The recent start in China, India, South Korea and Poland justifies this trend. And due to the steep growth of Internet penetration in Europe and Asia eBay’s expansion is going on. Although the Hungarian auctioning

service market has also a great market potential, eBay is not likely to come here yet due to the relatively small market. However, the market is perfect for Vatera, the leading Hungarian online auction site, which can boast similar astonishing results after its 4.5 years of existence, and it is only the beginning. http://www.doksihu 64 Bibliography Books • Cassidy, R. Jr, Auctions and Auctioneering, 1967, University of California Press • Cohen, A., The Perfect Store: Inside eBay, 2002, Little, Brown • Engel-Wiggans, R, Shubik, M.,& Stark, RM, Auctions, Bidding, and Contracting: Uses and Theory, 1983 • Friedman, D. & Rust, J, The Double Auction Market: Institutions, Theories, and Evidence Proceedings of the Workshop on Double Auction Markets, 1991, Addison-Wesley Publishing Company • Griffith, J., The Official eBay Bible, 2003, Gotham • Kaiser, L.F & Kaiser, M, The Official eBay Guide, 1999, Simon & Schuster • Prince, D. L, Auction This!

Your Complete Guide to the World of Online Auctions, 1999, Learning Express • Prince, D. L, Online Auctions at eBay: The Expert’s Guide to Buying and Selling, 2003, Premier Press • Turban, E. et al, Electronic Commerce 2004: A Managerial Perspective, 2004, Prentice Hall Press • HVG Háló Supplement: Internetes bazárok – Vegye, vigye (In English: Internet Bazars – Buy and Take It), 31 July, 1999 • HVG Háló Supplement: Internetes vegyesboltok – Záróra (In English: Internet Stores – Closing Time), 28 July, 2001 • HVG Háló Supplement: KONCENTRÁLÓDÓ MAGYAR C2C PIAC - Aukciós apály (In English: The Hungarian C2C Market – Low Water in Auctions), 6 September, 2003 • HVG Háló Supplement: Magyar aukciós oldalak (In English: Hungarian Auction Sites), 1 September, 2001 • HVG Háló Supplement: Online árverések internetcímei (In English: Web Address of Online Auctions), 25 September, 1999 • HVG Háló Supplement: Próbavásárlások az

interneten – Nem kell szatyor (In English: Trial Purchases on the Web – Bag is unnecessary), 9 October, 1999 http://www.doksihu 65 Online Resources • Allegro Online Auction Site: http://www.allegropl • Amazon Online Store: http://www.amazoncom • Aprónet Classified Ads Site: http://www.apronethu • aSearch Auction Search Engine: http://www.asearchde • AxioArt Online Auction Site: http://www.axiohu • Árveréslap Online Auction Site: http://www.arvereslaphu • DoveBid Online Auction Site: http://www.dovebidcom • eBay US: http://www.ebaycom • eBay Germany: http://www.ebayde • eBay: Annual Report 2002: http://www.ebaycom/2002annualreport/indexhtml • eBay: Company Overview, January 2005: http://investor.ebaycom/downloads/CorporatePresentationpdf • eBay’s Fourth Quarter and Full Year 2004 Financial Results: http://investor.ebaycom/news/Q404/EBAY0119-777666pdf • eBay Help: http://pages.ebaycom/help • eBay Live Auctions Site:

http://www.ebayliveauctionscom • eBay Press Release on April 22, 2005: eBay Launches Service for Poland: http://investor.ebaycom/ReleaseDetailcfm?ReleaseID=161003 • eeeBid Online Auction Site: http://www.eeebidhu • Escrow.com Online Escrow Service: http://wwwescrowcom • Honor Licit Online Auction Site: http://licit.honorhu • Interview with Pierre Omidyar on the Web site of Academy of Achievements: http://www.achievementorg/autodoc/page/omi0int-1 • http://highered.mcgraw-hillcom/sites/dl/free/0070898588/104791/Chapter15pdf • PayPal Online Payment Site: http://www.paypalcom • TeszVesz Online Auction Site: http://www.teszveszhu • uBid Online Auction Site: http://www.ubidcom • Vatera Online Auction Site: http://www.vaterahu • Yahoo Online Portal: http://www.yahoocom Electronic Press • HWSW Informatikai Hírmagazin, Aukciós biznisz kelet-európai módra (In English: Auction Business in Eastern-European Way), April 28, 2005:

http://www.hwswhu/hirphp3?id=28827&count21=1