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TMCNet:  To the virtual (junk) shop that taught the world to buy online, many happy returns: Arrival of eBay in Britain 15 years ago triggered a small-business revolution

[August 18, 2014]

To the virtual (junk) shop that taught the world to buy online, many happy returns: Arrival of eBay in Britain 15 years ago triggered a small-business revolution

(Guardian (UK) Via Acquire Media NewsEdge) This week in 1999 a man in Renfrewshire bought a CD single of You & I by the German heavy metal band Scorpions for pounds 2.89. It was not a particularly interesting purchase. Scorpions are still touring, 25 years after their song Wind of Change became a worldwide hit as soundtrack to the fall of the Iron Curtain.


But the method of purchase was new. That CD was the first item ever bought in the UK on then unknown startup website eBay. Since then 3bn items, worth pounds 65bn in total, have been sold on eBay UK. Along with Amazon, it has transformed the way we shop: 11% of all retail purchases are now bought online rather than on the high street, according to the Office for National Statistics.

More than 19 million Britons use eBay. Most sellers are sporadic, auctioning off unwanted junk or even gifts - the site sees a big jump after Christmas. For many eBay is a hobby and for others it's an addiction. Some have been able to make a career out of selling online, and almost 2,000 British people have become eBay millionaires.

The top nine eBay searches all start with an 'i' as in iPhone, iPad and iPod, but users have turned to the site to try to sell almost anything - even a half-eaten toasted cheese sandwich that looked a bit like the Virgin Mary.

David Taylor, a father of three from Grimsby, auctioned his forehead as advertising space last year after reading about Eric Hartsburg, who made $15,000 for having Mitt Romney's "R" campaign logo tattooed on the side of his head before the 2012 US presidential election.

Richard Perks, a retail analyst at the market research firm Mintel, said eBay's early success in reassuring the public of the security of buying and selling online via its dedicated PayPal service kickstarted the online sales revolution.

"EBay is one of the main reasons we are all happy to shop online. If there had been problems, internet retailing would have taken much longer to take off," he said. "Nowadays any decent store operator has to have a good online offering." Mark Radcliffe became Britain's first eBay millionaire five years ago, selling up to 6,000 low-cost products from protein supplements to iPod holders from his parents' garden shed in Stockport. Now the former pounds 7-an-hour trainee manager at Tesco has bought a pounds 700,000 home, a pounds 150,000 Ferrari and a pounds 118,000 Aston Martin with his earnings from the eBay shop First2Save.

Christie Foster, 45, became a millionaire after moving her baby products business online eight years ago, transforming her business "from market stall to a large organisation employing 20 people", she said. Online4Baby.com now turns over pounds 6m a year.

Radcliffe, Foster and other eBay millionaires have not made their fortunes through the auction process eBay is known for, but by selling goods at fixed prices, now 75% of all eBay listings.

Much has changed since Pierre Omidyar, a pony-tailed Silicon Valley computer programmer, created the online marketplace in his spare room in 1995. It launched in the UK four years later.

Deciding he was never going to be "the founder-CEO type like Bill Gates or Steve Jobs" he hired Meg Whitman as chief executive in 1998. That year the company floated on the Nasdaq in New York, making Omidyar one of the richest people in the world. "It was more money than I could ever use," he said. He set up a philanthropic investment company, Omidyar Network, which aims to invest in "entrepreneurs who share our commitment to advancing social good at the pace and scale the world needs today". The latest big project is The Intercept, an investigative journalism website co-founded with Glenn Greenwald, the former Guardian reporter who led the coverage of the Edward Snowden NSA files.

Douglas McCabe, an analyst at Enders Analysis, said eBay "lost traction" as an auction business, but "very successfully reinvented itself as an e-commerce marketplace" allowing anyone to set up a business selling anything to anyone anywhere in the world at fixed prices.

But in doing so it has placed itself in direct competition with Amazon, Play.com and hundreds of small nimble startups, such as hipster marketplace Depop.

Sucharita Mulpuru-Kodali, an e-commerce analyst at Forrester Research, says eBay "democratised selling" , but by doing so created a huge number of competitors. She believes eBay has lost a lot of the buzz that surrounded it in the early days as it consolidates core business rather than experiments like its technology-driven rivals.

While the company has been praised for its early adoption of mobile phone shopping, it has suffered a series of technology lapses.

The website crashed offline last week for the 10th time this year and suffered a major cyber-attack in May that might have compromised the details of 145m users.

EBay - which Omidyar originally wanted to call Echobay.com because it "sounded cool" but the name was taken - is still raking in big profits, with $3.5bn (pounds 2bn) in 2013. The company, which employs 33,000 people, has a market value of $65bn, almost six times as much as Marks and Spencer.

Enough to buy 13.5m more Scorpion CDs at pounds 2.89.

Pierre Omidyar founded the online auction website eBay from the spare room of his home in Silicon Valley in 1995 (c) 2014 Guardian Newspapers Limited.

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