eBay is one of the largest online marketplaces where you can buy or sell almost anything! eBay itself states, “Buying and selling on eBay is easy and it’s fun. Best of all, you’ll never know what you can find.”
With all of the buying and selling that occurs on eBay – whether you’re new to the platform (or a veteran user), you may be wondering how eBay, as a company, makes their money.
How Do They Make Money?
eBay makes money through:
- Seller Transaction Fees*
- After-Market Ticket Sales (through sites such as StubHub)
- Companies they have acquired (Paypal, Craigslist, Skype, StubHub)
*eBay does not currently charge ‘buyers’ to use their platform.
To sell items on eBay, sellers are subjected to listing fees as well as final value fees as outlined by eBay.
On top of charging listing and final value fees, eBay also offers its sellers the option to add-on advertising to further showcase their listed items and make more sales. eBay reported that their marketing services gained $333 million in revenue in the last quarter of 2017.
eBay also has an extensive list of companies they have acquired over the years – most notably – PayPal, StubHub and Skype. In fact, StubHub posted revenue of $306 million in the fourth quarter of 2017 alone, proving the acquisition to still be incredibly lucrative for eBay.
What is eBay?
eBay is an e-commerce corporation which was founded in 1995 by Pierre Omidyar. The platform allows buyers and sellers to come together to exchange goods and services worldwide in the form of auction-based sales, ‘Buy It Now’ sales, ticket sales (on sites like Stubhub), and through classifieds. eBay’s current headquarters are located to San Jose, California, and is publicly traded under the symbol: EBAY.
eBay is currently free for buyers to use, and sellers are charged fees based on their transactions. According to eBay, “The fees we charge for selling on eBay mainly depend on what you sell and how much it sells for. We’ll send you a monthly invoice, and you can pay by PayPal, credit card or direct debit.”
What are eBay And PayPal Fees?
eBay and PayPal both charge fees to sellers that are using their platforms.
- eBay’s fees are separated into two main categories: Insertion (Listing) Fees and Final Value Fees.
- PayPal charges the seller based on the amount of the transaction.
eBay’s basic fees are outlined in the chart below. Further explanation can be viewed on eBay.com
Watch This Video To Learn More About eBay’s Fees
What Can’t You Sell On eBay?
In previous years, there have been plenty of obscure or obscene products/services that people have attempted to exchange via eBay. However, eBay maintains that the safety of their community is something that they take very seriously, and they have banned the sale of some products and services to maintain their community’s protection.
According to Chris Grundy of bitbond.com, Below is a top 10 list of prohibited items to sell on eBay:
- Partially Used Cosmetics
- Electronic Surveillance Equipment
- Human Remains / Body Parts
- Weapons (including firearms)
- Prescription and Illegal Drugs
- Personal Information
- Equipment that could aid in crimes (such as lock picks)
- Used Underwear
- Animals & Related Animal Products
- Adult-Only Items
The rest of the list, and eBay terms & conditions may be read here.
What Are The Strangest Things People Have Tried to Sell on eBay?
According to Samantha Grossman of Time Magazine – here are the top 5 weirdest things to be sold on eBay:
- A grilled cheese sandwich, which resembled the Virgin Mary, sold for $28,000 in 2004.
- Clippings of Justin Bieber’s hair fetched $40,668 in 2011.
- A latex Casey Anthony mask, sold for $999,900 in 2011.
- Justin Timberlake’s half-eaten French toast, sold for $1,025 in 2000.
- Ad space on a guy’s forehead, in the form of a temporary tattoo, went for $37,375 in 2005.
Read more about the weirdest things sold on eBay here.
Watch This Video For More Of The Weirdest Things Sold On eBay
How Are eBay And Amazon Different?
While both eBay and Amazon are large e-commerce platforms, they are actually very different based on their business models and services.
According to an article by Investopedia, here are the main ways that the two platforms differ:
- Auction-based business model
- Wholesale pricing strategy
- Direct provider of goods to buyers
- Fixed pricing on products