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Auction Services Fast Facts, Last Updated:09/10/2010
eBay generates revenue from sellers, who pay a fee (http://pages.ebay.com/help/sell/fees.html)based on the selling price of each item, a fee based on thestarting price, and from advertising. In February 2005 it was announcedthat eBay would increase fees it charges to eBay Stores (http://stores.ebay.com)sellers, which caused considerable enough controversy among eBayusers that the President of eBay's North America business recentlyemailed all eBay users with news that other fees would bedecreased. eBay does not handle the goods, nor does it transact thebuyer-seller payments, except through its subsidiary PayPal. Instead, much likenewspaper want-ads,sellers rely on the buyers' good faith to make payment, and buyersrely on the sellers' good faith to actually deliver the goodsintact. To encourage fidelity, eBay maintains, rates, and publiclydisplays the post-transaction feedback from all users, whether theybuy or sell. This way, the buyer is encouraged to examine thesellers' feedback profile before bidding to rate theirtrustworthiness. Sellers with high ratings generally have more bidsand garner higher bids. However, it is possible for sellers to maketheir feedback private and just leave the numbered rating (Numberof positive, negative and neutral feedback with a positive feedbackpercentage), which means that bidders and sellers cannot see thecomments other users have left. eBay also has a significantaffiliate program, and eBay affiliates can, for example, place liveeBay product images and links on their web sites. |
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