How Does Ebay Make Money

Everyone want to make money online, just cause it seem easy to do. but only 5 percent from the whole entrepreneurs get success and other 95 drop in the market or switch from the idea. Now day the most popular business online is eCommerce, there are thousands of websites are developed day by day which are based on eCommerce.

We always try to innovate new things in the tech world but only few can did it. Let’s take the example of the eBay which is introduced by Pierre Omidyar.

Did you know: EBay is the world’s eighth-largest internet company by revenue. wikipedia.org

The idea behind eBay is very simple, eBay is earning by the commission systems, suppose there are two person Ali and Amir. Ali wanted to buy a car and Amir want to sale the car. Here eBay comes where amir posted about his can and ali watched the post and convince to buy that, and when ali buy the car eBay get commission from the amir.

Now just imagine hundreds of thousands items are sale on eBay daily from 0.01$ to thousands of dollar and eBay get commission from them vary from 0.001$ to thousands of USD.

Currently the stock market of the eBay is very strong and it’s the biggest eCommerce website over the globe.

Current Stock price: EBAY (NASDAQ) US$35.32 +0.53 (+1.52%)

According to the survey which is held in late in the 2016 the revenue of the ebay as the following

Revenue: 8.97 billion USD (2016)

Now the point is that how does eBay make money? exactly the thing we want to know. in the simple and one word the major source of income of ebay is paypal.

yeah, right paypal, did you know paypal is the child company or eBay.

ebay make money  with PayPal

approximately the third part of the income comes from the fee generated of paid by the paypal, in 2012 eBay reported that 3.9 billion USD is collected by the paypal. now as the estimate 41% to 55% or revenue is collected from the paypal fee.

if you still don’t get my point, then the simple is that when someone paid money for any product which is purchased from the ebay and generated bill through the paypal, paypal detected the free of transaction which is the almost the major revenue of ebay.

Marketplaces

The second biggest moneymaker for eBay is its marketplaces, or where people like you and I go to buy things. And, like it does with PayPal, eBay makes its money from the section on transaction fees, which apply to sellers.

The company lets users list their first 50 items every month for free. Beyond that, eBay charges a set amount, depending on what the item is. For fixed price Books, DVDs & Movies, Music, and Video Games listings, it is 5 cents. For auction-style and fixed price listings in all other categories, it is 30 cents.

In addition, eBay takes 10% of the total amount of the sale for every listing, though its maximum fee is $250.

Users also have the option to pay more for certain services. For example, they can spend an extra 35 cents for larger pictures on auction-style listings or 50 cents to put extra descriptive information. Prices for these fees depend on the style of listing (either auction or price fixed) and the duration of the listing (from three days to a month).

Now, these fees may seem fairly insignificant, but eBay had 124 million active marketplace users in the third quarter, and all of this added up to give the company a total of $2 billion, or 51% of revenue.

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