Mercantilism and eBay eBay operates just like a modern day flee market and in many ways eBay operates similar to the old Mercantilism style of economic system.

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Mercantilism and eBay

eBay operates just like a modern day flee market and in many ways eBay operates similar to the old Mercantilism style of economic system. Merchants gather together to buy and sell their products, but unlike the old market places these merchants now gather on-line. With eBay itself, being the chief merchant the owner of the village market so to speak.

"Mercantilism allowed the market to operate, but it kept the market under its control. The market was not allowed to respond freely to the laws of supply and demand" (Colander 50.) eBay does exactly that. They control the market. eBay is the head merchant, the owner of the market and the king of Internet Market.

Overview of eBay

eBay is the online marketplace for the sale of goods and services by a diverse community of individuals and businesses. This marketplace was founded in September 1995. Today, the eBay community includes 49.7 million registered users and is the most popular shopping site on the Internet when measured by total user minutes, according to Media Matrix. In 2000, the eBay community transacted more than 5 billion in annualized gross merchandise sales. On any given day, there are millions of items listed on eBay across thousands of categories. People come to eBay to buy and sell all kinds of practical, unique, and interesting items, such as automobiles, jewelry, musical instruments, cameras, computers, furniture, sporting goods, tickets, to name a few (eBay).

eBay's mission is to help almost anyone trade practically anything on Earth. eBay enables trade on a global basis. It features a variety of international sites, specialty sites, categories, and services that aim to provide users with the necessary tools for efficient online trading in an auction style and fixed price format. The eBay community profits from an environment combining traditional auction-style and fixed-price trading on their e-commerce site. provides an organized online marketplace to buy and sell high quality, previously owned mass-market goods. Unlike auctions, where the selling price is set on bidding, the seller sets a fixed price for items on at the time the item is shown (eBay).

eBay users reflect countries from all over the world. It is common to hear about eBay users in Korea buying items from users in the U.S., or users in Australia buying from others in France. Currently, eBay has country specific sites in Austria, Australia, Canada, France, Germany, Ireland, Italy, Korea, New Zealand, Switzerland, and the United Kingdom (UK). With eBay's vision and global business strategy, the company continues to expand its service and brand abroad (eBay).

"International expansion is progressing nicely and is likely to become a significant

driver of growth over the next 3-5 years. According to eBay, Gross Merchandise Sales (GMS) in Europe grew 130% faster than GMS in the United States, fueled primarily by strength in Germany and the United Kingdom. The recent introduction of fees into these two marketplaces also suggests that they are beginning to contribute to eBay's revenue base. Recently launched

sites in France, Austria, and Italy are likely to play more prominent roles throughout 2001

and into 2002. Moreover, future results are likely to benefit from eBay's integration with

Internet Auction Co. (IAC) in South Korea. Launched in April 1998, IAC is the leading

online auction platform in Korea, boasting 2.8 million registrants and an average of more

than 450,000 items for sale at any time. This alliance should provide eBay with a key

point of entry into the 2nd largest online market in Asia and the 6th largest worldwide" (WR Hambrecht + Co.).

Thesis Statement

How does the Internet affect the buyer's and seller's market? This report will evaluate the global impact of the e-commerce transaction industry from the perspective of the shareholders. We will also discuss the government's current fiscal...
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