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Millions still join online path to potential riches

By David Crooks

What is eBay? The answer to this question depends, to a great extent, on your experience of it. To Peter Clatworthy who unwittingly paid £450 for a photo of an Xbox One console last October, it is most likely a murky world of spivs and chancers.

To those who splashed out $1,350 (£810) on a single cornflake or $1,025 (£617) on Justin Timberlake's half-eaten toast, it's a hotbed of potential buyer remorse.

Over the years, there have been fully functioning kidneys for sale (illegally, of course, but at a starting price of $2.5m, £1.5m). A bobsleigh team put itself up for auction ahead of a Winter Olympics. People have flogged anything from eggs to a pinch of fairy dust (yours for a couple of quid). One wag tried to sell the town of Bridgeville in California in 2002. Three others have put it up for sale since.

But, without donning some rose-tinted Versace glasses (£45), eBay, which celebrated its 15th birthday last week, is not what it used to be. Although it still has quirky items and goods which cannot be bought in the shops, just 25% of items are now sold at auctions. The first item that sold on eBay.co.uk may well have been a second-hand CD by The Scorpions, fetching £2.89 worth of bids, but today – more than three billion items and £65bn of sales later – 70% of items are sold as new.

For eBay, this has been a marked yet deliberate shift. Each change made on eBay, no matter how small, has been carefully trialled in its labs and this has allowed eBay to "evolve", according to Valerie Nygaard, eBay's senior director of EU buyer experience. "We see ourselves as less auction site and more trusted retail partner," she says. The upshot is that eBay's major rival is now Amazon, which itself competes with eBay via its Marketplace. Indications are that eBay may well be winning.

Earlier this month, Ofcom's Communications Market report said eBay, with a reach of 34%, beat Amazon (with 28%) to be named the most popular retailer in the UK on mobile. Its smartphone and tablet apps have been downloaded more than 240 million times and, in the UK, an item is bought every second on eBay using a mobile device. There are 200,000 independent traders in the UK alone. "It's almost like Debenhams online, only with tens of millions of stores inside," says Robert Pugh, author of The eBay Business Handbook.

Mr Pugh, a former BT sales executive, is one of tens of thousands of UK eBay sellers who have abandoned careers to work on the site full time. He began by buying quality brand toys from car boot sales, building up a successful eBay toy company. As his daughters grew older, he took a keen interest in cosmetics and drifted into selling mascara and lipstick in an eBay business turning over £250,000-a-year.

"The good thing about eBay is that if you want to sell one thing a week, and have a curry, you can, but if you want to sell a thousand items and change your life, you can do that too. The flexibility and start-up costs are zero really and you can do what you like," he says.

However, in meeting Amazon head-on and making eBay as friendly as possible for buyers, sellers say its changes have put them under pressure, leaving them unable to leave negative feedback for buyers and encouraged to offer free postage and packing, click-and-collect and speedy delivery.

"You work yourself to the bone and you're hanging on a knife edge when they make these changes," says Alison Abruneiras, a former nail technician who progressed from earning £70-a-week in employment to turning over close to £1m-a-year. "There were no rules when I started but now you're a part of eBay and that is how you have to look at it. If they say you jump, you say how high."

Fees are always the main bone of contention. In 2006, around 450 professional eBay traders ceased trading for 24 hours, angry at the scrapping of a 3p listing charge in favour of a sliding scale of fees. Last week, there was a backlash when eBay announced Buy It Now items would attract a flat fee of 50p (previously, items below £25 were cheaper). The Gallery Plus feature has risen from 95p to £2.50 and subtitles on listings would go up from 35p to £1. Reserve price fees have risen from 3.5% to 4%.

Yet, sellers, by and large, stick with eBay. Its mammoth buying base (eBay claims 19 million Brits visit each month) opens up a path of potential riches and there have been more documented cases of eBayers becoming millionaires than are reported for Amazon Marketplace. Ms Abruneiras earned enough money to open a tapas restaurant, and others, including former Tesco employee Mark Radcliffe and City lawyer Anthony Ponsford, show the diversity of those turning to the site to earn a lucrative living.

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