The year's biggest antiques story is that of a three year old Web-based auction trading company called eBay. First offered publicly at $16-$18 per share their stock rocketed to highs of $88 a share on October 27th. This rise was spurred-on by third quarter revenue announcements of 12.9 million and profits of 2 million; nine-fold increases from the previous year.
On their current web page, eBay advertises 903,628 items for sale in 1,086 categories ranging from microwave ovens, to computers, to antiques and collectibles. Twenty-nine million items have been offered since the company's inception resulting in over 108 million bids and 12 million page views per week. Considering "regular" auction galleries average about 25 auctions a year, consisting of about 500 lots per sale, that's substantial business.
Although of thousands of companies have thrown their hats into the high-tech Internet ring, eBay is one of only a handful turning a profit. Forecasters predict cyberspace commerce houses will seize a sizable chunk of sales away from retailers in the next ten years, and that 30% of "e-tailing" business will move via auctions. Proof that investors see online auctions as a huge growth industry is reflected in eBay's market capitalization. At 3.2 billion, it's already three times the size, on paper, of 254 year old Sotheby's.
Ebay has one of the world's busiest web sites (www.ebay.com). They make money by charging consignor credit card accounts a small listing fee and a small commission on items sold. Wall Street is enamored because the business maintains almost no inventory. They do not touch the merchandise or the proceeds. Sellers register items from their homes or businesses according to name, category, description, and length of sale. Five days is about the norm. A good photo, downloaded as a "link" from the consignor's own web site, is usually included as well.
Registered bidders find items by using search-engines or scrolling through various categories and favored regular seller listings until they locate an article that entices. Bids are typed in. When the sale term is concluded, the highest bidder is contacted electronically. Pre-arranged conditions regarding delivery and payment terms are established by the seller.
Knavery is curbed by a self-policing system where buyers and sellers are encouraged to rate each other after a transaction is concluded. One of three scores; positive, negative, and neutral, are allowed, as well as a fifty word comment. Sellers who provide properly advertised products, quick delivery, and other good services receive favorable ratings and a strong following of bidders. Those who rate as scoundrels are dropped from the service.
Now, before investing your children's college trust funds into eBay, here's a few warnings: The stock is currently trading at multiples of 60+ times revenue. That means it's high priced. A gross of competitors have just entered the market and some are already major web players. Netscape's Classified 2000 just started an antique auction site. Yahoo is offering a new auction arena free of charges. Even hi-tech stocks go down in bear markets.
Perhaps you have taken vows never touch a computer or anything having to do with the web. This news still impacts you. Internet auction business has already had an influence on the valuation of what you own and the way it can be marketed. With a vault full of money to spend eBay president and chief executive, Margaret Whitman, is contemplating increased technology investment, stronger marketing, and shopping for related businesses. I wonder if she has ever thought about the antiques column business?
EBAY ON-LINE AUCTIONS - ANTIQUES STORY OF THE YEAR
Write to
Wayne Mattox
Like AntiqueTalk?
Recommend it to a friend!
Copyright © 1995 - 2006 Wayne Mattox
Home | Columns | On-Line Auctions | Our Shop | Appraisals
Events and Lectures | Wayne Mattox | Woodbury
