Online marketplace/Ecommerce

The first product sold on eBay, the auction website, was a broken laser pointer. In September 1995 its founder, Pierre Omidyar, posted it for sale on a website he first named AuctionWeb. The pointer sold for $14.83. When Omidyar asked whether the buyer understood that the pointer did not work, he was reportedly told: “I’m a collector of broken laser pointers.”

Two months earlier Jeff Bezos had opened Amazon.com, but Omidyar was more interested in the business of helping others sell online – by creating an open-access marketplace where they could be matched with buyers.

In part he used old ideas: the auction and the outdoor marketplace. What was new about the eBay online flea market was that it tested whether strangers could build enough trust over the internet to trade with each other. It sounded unlikely to many at the time. Today, it seems ludicrous to doubt.

Trust was built by sellers who offered product photos, contact phone numbers and shipping details. And by payment systems, public scoreboards for customer service and policing mechanisms. Now, online marketplaces are a fixture of global retail.

No bazaar is without rogues and counterfeits. But online marketplaces have produced great advances in consumers’ ability to research, price-check and buy a wider range of products.

Even Amazon got in on the act. It wants to offer the world’s largest selection of merchandise, but only wants to hold the more popular goods. In 2000, it opened its own marketplace – and so-called third-party sellers now account for 40 per cent of the sales volume on its website.

Many sellers are ordinary folk clearing out household junk. Online marketplaces give them an easy way to turn that into cash. In an era of economic volatility and environmental stress, that is an underappreciated form of recycling.

Barney Jopson