Why eBay Lost The E-Commerce War?

Sejal Raval Sejal Raval
Apr 22, 2022 5 min read
Why eBay Lost The E-Commerce War?

To begin with, eBay did not lose the e-commerce war to anyone but itself. The American multinational company, which was once a prominent ecommerce market player, gradually sidetracked, especially from the Indian market.

No wonder the ecommerce market now is dominated by able players like Flipkart and Amazon, and eBay still has a place but it has long lost its prominence. This often poses numerous questions in our minds regarding eBay and how it lost the ecommerce war.

So, we have decided to come up with this article, which will let you know all about eBay and how it dimmed from dominance.

How eBay started?
Factors That Made eBay lose E-commerce Market

How eBay lost the E-Commerce war?

How eBay started?

Pierre Omidyar - Founder of eBay
Pierre Omidyar - Founder of eBay

eBay was founded by Pierre Omidyar on 3 September 1995 in San Jose, California, United States eBay’s tenure on the dominating throne was very short-lived. Pierre was merely 28 years when he founded eBay. He graduated with a degree in Computer Science and was soon after hired by the all-time mega player Apple. While working for several companies, Pierre felt the need to have an innovation of his own. In 1991, while working at Inc development, Pierre Omidyar had ideas that could revolutionize the e-commerce marketplace. During his tenure at Inc development, he lacked the string that could lead him to what he desired, so he quit his job. After that, he worked at many places with the zeal of developing something of his own. This way gradually by experimenting in the modern marketplaces many times, eBay was born.

The original business model was to create a website to carry out auctions that could be customer to customer or seller to seller. This turned out to be quite a hit. The traffic to the website was humongous. The major and only source of monetization during the beginning for eBay was the commissions it charged on every auction. In 1996 the business started to get serious with the plunge in the number of users. Pierre hired programmers and was set to expand the platform. People seemed to like the concept. The number of auctions hosters on the website increased day by day. Soon eBay was a structured corporation under the guidance of the CEO Margaret Whitman, whose background and skill brought eBay to touch the zenith of success. Later, soon the universal law of Darwin, the world is meant for the survival only of the fittest stated to give major reality checks to eBay. The downfall devil knocked on eBay’s door.

Factors That Made eBay lose E-commerce Market

Most people think that eBay failed because it did not capitalize on the e-commerce revolutionary but in reality, it failed because it did not expand on discovery-driven eCommerce, which itself started when the trend expanded beyond the platform and onto social media.

Cost Factor

eBay failed to be cost-friendly for everyone, it was more of a bargain store than a pocket-friendly store as it had the option of bidding which cannot be found on any other e-commerce platform, and eBay has a fee for almost everything including shipping charges.

When every platform started cutting down the shipping cost to attract more customers eBay did not adapt to this and still kept the charges making them lose a lot of their customer base to other e-commerce giants.

Lack of Customer Support

Every business has a major impact through its customer support base, We all know the hassle we have to go through when we have to return a product or enquire about anything and how we prefer buying from places that have exceptional customer support.

Not focusing on their customer support was also one of the prime factors why eBay was left behind. Especially during the pandemic, every e-commerce platform improved its customer support drastically. on the other hand, eBay was notorious for poor support, no phone number, automated responses, and a buy at your risk policy, it took years for eBay to give very minimum buyer protection, and also a seller can be banned at the drop of a hat, with no appeals process and it stays for life. This made eBay neither buyer-friendly nor seller-friendly.

User Interface

The website of eBay is very laggy for users, when most of the world was moving online, The expectations of people were increasing. eBay was still lacking behind with its crappy website which was filled with a lot of bugs and the interface was neither user-friendly nor pleasant to the eye.

Lack of Innovation

eBay’s inability to innovate has pushed it onto the sidelines of e-commerce business, it had to look into the future and innovate accordingly to survive in the marketplace which it failed to do, it is also heavily biased towards buyers and gives almost zero protection to sellers which forces most of the good businesses to move to other marketplaces instead of eBay.


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Talent Retention

Every business thrives on the type of people they have to work with. Accordingly, every business wants to retain its talented employees that would help them improve their business. eBay almost every time failed to retain its good talent and lost it to other companies. Most of the alumni of eBay even turned into very successful entrepreneurs. Had eBay retained even a little percentage of such talent in the company, the story of eBay might have been different now.

Like every e-commerce business out there, eBay is a business that needs both buyers and sellers equally. If people aren’t using eBay to sell their things, then eBay is out of luck, it isn’t like eBay can go into people’s houses, and sell the stuff themselves.

Most of the people that use eBay now are using it mostly to buy used parts and second-hand parts for cheap or trade their items for bidding. That’s all they find good about the website now. If you wanted a brand new item or wanted to sell a brand new item you would not turn to eBay.

Terms and Conditions

eBay has made its terms and conditions complex for both the buyers and sellers which makes it impossible for both of them to stay in business with each other without any complications or hassle.

Conclusion

Charging higher commissions, offering no sellers/buyers' protection, extremely complicated terms and conditions, bad customer support, and the lack of transparency, are some of the major factors that led to eBay getting sidelined in the e-commerce business. Furthermore, the rapid rise of the other innovative alternatives has led to the fall of eBay’s dominance. Though eBay's fall from glory is not here for long in the world of brands and businesses that are ever-changing, the missteps of the brand can certainly serve as lessons for startups, budding startups, founders, business executives, entrepreneurs, and all who dream of being one.

FAQs

Is eBay an E-Commerce platform?

eBay is an American multinational e-commerce corporation based in San Jose, California.

Who is the founder of eBay?

eBay was founded by Pierre Omidyar in 1995.

Is eBay on the decline?

eBay is continuously losing its customers of e-Commerce market.

Who is the biggest competitor of eBay?

Amazon is the biggest player in E-commerce market that gave tough competition to eBay.

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