Way back yonder in a simpler time, Pierre Omidyar founded the web site AuctionWeb. AuctionWeb was a part of a larger site that he had been working on at the time. According to wikipedia, one of the earlier items sold on the site was his own broken laser pointer for $13.83. When the bidding ended, the founder contacted the bidder to make sure that he knew the pointer was broken, and the bidder replied, “I’m a collector of broken laser pointers.” With nineteen public acquisitions, and several investments in the bag, AuctionWeb has grown to the now successful eBay.com. People can buy or sell anything from a Ferrari to a piece of toast. While the internet phenomenon has created millions upon millions of opportunities for people all over the world, it has started to take adverse effects on the open market we have come to love and enjoy.
Since 1998, eBay has experienced unrivaled growth in the online auction industry. Now with over 203 million subscribers, it has changed from a place of business to a place of community, heck a nation, of its own. Just browsing through the different auctions you can find everything from broken laser pointers to items that have not been released yet, like the two new next-generation consoles (Playstation 3 and Nintendo Wii). There are companies founded to just help you sell your stuff through eBay, and countless others sell on eBay to make a living. The gross merchandise volume has increased from a few spare items to over 12.9 BILLION dollars over the past decade. As an example of just one of the many unique ways people can make money on eBay, the star of the hit online show Pure Pwnage sold a lock of his hair for $4200.
As eBay continues its conquest the world is changing with it. Like the Industrial Revolution, and the advancements through the ages, eBay and its influence over the internet is changing the ways we function day in and day out. The first TCP/IP network, the foundation of the modern internet, was used as a university network. Now we can chat with our friends, play games with people from all over the world, subscribe our internet-based software, and of course buy and sell products across the globe. I still remember back in the early nineties when I would strange looks at school for talking about gaming on the internet and all of its other benefits. But slowly it took hold and now computers and the internet are as common in households as the television set or the radio. While eBay certainly wasn’t alone in its effect on this so-called internet explosion, it certainly helped. But with every advancement of mankind, their has always been negative effects.
Today some of the most feared aspects of an open market society are becoming more founded into our standard of living. I still remember when scalping tickets was highly frowned upon, and now its an easy way for people to make a quick buck on eBay. Certain tickets for shows can sell for upwards of a thousand dollars, and even more sickening is the fact that people can sell a seven-hundred dollar gaming system for thousands after putting fifty dollars down. That’s right, the Playstation 3 is already selling for more than double to triple its price before it is even released. If history has shown anything, it has shown that gaming systems tend to have bad track records during their initial release with bugs, overheating, and exploding controllers – imagine me clearing my throat here. So you can see my declined excitement in owning a system for myself, but I stopped by a Toys R’ Us on October 29 to chat with the people that had been waiting in line for over twenty-four hours to pre-order their systems.
Upon arrival I found at least sixty people camped in front of the store. I saw the manager and a few employees standing at the back of the line inside the exit to the store. So I walked up and asked them a few questions. First of all, I asked how many of the systems they were getting in. Apparently they were only getting in fifteen 60 GB Playstations, five 20 GB Playstations, thirty-five Nintendo Wiis, and four TMX Elmo’s. Also, the line had every item reserved by noon the day before, which means the preorders were reserved twenty-four hours before they could take them. I than asked the manager if he would mind allowing me to talk to the people in the line and get their perspective.
The first gentleman in line, Greg, had been waiting outside the store for thirty-six hours when I talked to him at eight in the morning. First of all, he was fully prepared with a sleeping bag, a cooler of food, and of course plenty of gizmos and games to keep him busy. After asking him some questions about the PS3, which he answered more or less satisfactory, I asked him what games he plans on playing. He chuckled and said, “No, I’m not going to keep it. They are already selling on eBay for a lot!” Amused, I asked him how much money he plans to make. “Well, I’m going to put it up for auction the second the lines start to build at Best Buy for the release. I have a feeling the news will generate enough hype to boost the final price,” he replied. “Not bad for a six-hundred dollar investment,” I remarked. He chuckled again, and said, “I don’t have that much money. I’m putting the minimum down, ha.”
Shocked, I started to talk to the rest of the people in line and finally got some statistics to share. Out of the twenty PS3 systems preordered, sixteen of them were to be posted on eBay. Two of the people were paid to sit in line by a friend or relative, and the other two declined to comment. The Nintendo Wii had a different track record, with only about one third of the people in line selling the system. Many of the others planned the system as a Christmas gift. The Elmo dolls were naturally being put up for auction at the end of the month.
Needless to say, our open market economy is being taunted. First come, first serve has turned into first come, best profit. And the rush for the profit has taken the now hefty priced system, and turned it into a rare and expensive commodity. Even some of the well off families will have a hard time finding and affording these elite next-generation consoles this holiday season. With prices already hitting prices of two thousand dollars on eBay before the hype has become fully matured, you can be sure to guess that some will profit and many will be left without that perfect gift.
Although eBay is now taking more strenuous actions to prevent scamming and flooding of presale systems, the damage has been done and the movement’s effects will continue on unchallenged. I almost wish they didn’t put a limit to one presale per account with a fifty plus feedback rating. Now the prices are getting pushed up higher, and people that ordered multiple systems are forced to sell their extras during the time when prices soar. While the maximum price will most likely be affected slightly, the profit will be more than enough to encourage this behavior in the future. The once frowned upon scalping has been turned into a minimum-deposit selling fiesta of products that we don’t even have yet. Now anyone with fifty bucks and the patience to sit in line for a day can turn a massive profit. The worst part is, the PS3 is already looking to have problems with its controller’s batteries. Hope you are willing to wait during the recalls and turmoil this holiday season for your thousands of dollars.
Well, I guess with each change comes effects and eBay’s growth and achievements have set the ground work for the holidays to come. A chance for profit, and a high chance of great gifts becoming more and more expensive to the consumer. Happy holidays, and may the spirit of giving be with you
-gn0sc3r3-
The Observer!
