So which small businesses are doing business on eBay? As you might expect, the survey found that they are much smaller, less established, and hungrier for bargains than businesses that don’t use the auction site. “I used to think that mainstream businesses turn to eBay as an additional solution,” says Jordan Glazier, general manager of eBay business. “But [the businesses on eBay] turn out to be more optimistic and more entrepreneurial.”And many of the entrepreneurs are still in the start-up phase. Some 10% have been in operation less than a year and 27% have been in existence between one year and four years. Only 20% have been around 20 years or more. In fact, almost half the small businesses that use eBay (49%) are run out of a home, compared to 26% of the non-eBay businesses. As you might expect, that translates into having fewer employees. Six in ten eBay businesses have two or fewer full-time employees, and 41% have only one. And where it counts most—revenues—the businesses that use eBay are significantly smaller as well: 23% had 2003 revenues less than $25,000. Nearly a quarter had revenue last year between $25,000 and $99,000. “You see companies in the early stages and they can’t afford to buy an original set of capital equipment,” says Glazier. “They are more often price sensitive and capital constrained and more concerned with making their nest eggs go as far as they can go.”
In contrast, 37% of the companies that hadn’t used eBay had been in business 20 or more years. Only 8% of the non-eBay businesses had revenue less than $25,000, and 16% had 2003 revenues top $1 million. “Where we see businesses reducing the use of eBay is when they grow to a size when they have a purchasing department or they have vendor contracts,” Glazier says.
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