eBay - The Last Bastion of Free Market Economics
The world of online auctioning seemed so foreign until that fateful day Hubby and I received a wedding gift we knew we would never use. Peering through the crack we made in the gift wrap, we could see there was no point in opening any further and we puzzled over what to do with the new addition to our marriage. It was too valuable to just give away, but so far outside the realm of our tastes that it was guaranteed to sit in a closet unused. There had to be someone out there who would appreciate the gift more than we did.
eBay instantly came to mind.
We went online, researched the retail value of the item, chose an attractively reduced opening bid and there began my personal eBay journey. And voila! There was a bidding war and the item sold for not too far under retail value. Now I use eBay to get rid of anything and everything.
As I headed to the post office this morning to ship an item that sold last week, the greater meaning of eBay hit me - the free market. eBay's system is based on five basic values -
- A belief that people are basically good.
- Everyone has something to contribute.
- An honest, open environment brings out the best in people.
- Recognition and respect of each person as an individual.
- Treat others the way you want to be treated.
Putting these principles into action, eBay engages the active participation of the entire community through its honor system. After a sale closes, you are asked to give feedback about the other side. The feedback you receive is linked to your screenname, which pops up with a rating next to it and anyone contemplating buying from or selling to you can look up what everyone else has said about you. With one click, one can learn whether a seller packages a product safely, whether a buyer pays in a timely fashion or if someone has a history of skipping out on deals. The most egregious violators of the honor system can be banned from the community.If the financials are any indication, this simple free market formula works. eBay posted net revenues of $1.7 billion in the 4th quarter of 2006 alone.
No government regulations needed. No tariffs imposed that favor one seller over another. No quotas on how much can be sold or restrictions on to whom. Good old integrity, buyer beware and personal responsibility.
So far, I have 100% positive feedback. As a seller, it is important to me to package items well, ship promptly and refund any overcharges I may have quoted for shipping. It is the way I would want to be treated.
This week, however, I confess that I fell short of my own standard. The buyer paid for the item on Tuesday and my carpool/work schedule essentially guaranteed that I would not make it to the post office until Saturday. The buyer paid for Priority Mail, but will get the item a week after he paid for it. It occurred to me that the buyer might give me negative feedback. If so, would it discourage others from doing business with me? When I got home, I marked the item as shipped and sent a note to the buyer apologizing for the delay. A few days from now I will find out if the buyer is willing to vouch for me as a seller and encourage others to buy from me.
That is the free market.