Internet companies are once again grabbing Wall Street headlines, defying the odds and leaving traditional money managers scratching their heads. This time it's the upstart young company eBay and its acquisition of the 134-year-old San Francisco auction house, Butterfield & Butterfield. One name smacks of a high-tech flea market while the other evokes images of elegance and tradition. Now the two worlds have collided for $250 million in stock.
Who'd have thought? Just a mere pup of four years, eBay has been hot ever since it hit the Internet scene and so has its stock. After initially selling at $18 a share last September, eBay has seen a high of $234 and is currently trading around $215.
It's a "person-to-person trading community on the Internet." EBay acts as a virtual swap meet where buyers and sellers can exchange items such as coins, arts, antiques, collectibles, memorabilia, computers, jewelry, toys and more. Its success is phenomenal with a reported 12-fold gain in first quarter profits. Revenue rose from $6 million in the 1998 fourth quarter to $34 million in the first quarter of 1999. Registered users have doubled to 3.8million, as have actual auctions, reportedly 22.9 million for the first quarter.
EBay hovers between the third- and fourth-most-visited shopping site
on the Internet. It truly is a fun place to visit, and anyone can peddle their wares for
a nominal fee, and I mean nominal. The fee to list an item with eBay ranges
25 cents to $2, and the auction remains open for one week from the day of listing. After a sale is completed, eBay takes a commission based on the selling price, usually around 2.5 percent.
Antique dealer Glen Soares of Soares Antiques Etc. has enjoyed tremendous success listing items with eBay, according to co-owner Sudie Soares. "Over the last 10 weeks we've listed approximately 450 items and have sold 90 percent." Sudie describes their auction items as "collectibles that grandpa would save, not grandma." Old straight razors, fountain pens, souvenirs, logo items, firecrackers and tobacco tins are among some of their online auction items.
"It's incredible what happens when our customer base suddenly expands from 200-300 people at an antique show to millions of people worldwide on the Internet," an amazed she Soares said. Sudie Soares recently listed an old rubber 'Lil Nipper' RCA dog for $8 on eBay. "We couldn't give it away locally and hauled it around for years." "Lil Nipper" ultimately fetched $615 on eBay.
The same story holds true for a set of Richfield Gasoline salt and pepper shakers, originally listed for $8. When the bidding was over, the set sold for over $500. All transactions are settled directly between the buyer and seller by e-mail, with shipping costs usually extra. Soares has shipped a mother-of-pearl telescoping pencil to Hong Kong, a harmonica to Guam and a decorative powder compact to Italy. A pair of glass contact lenses, circa 1910, covering the whole eye, was purchased as a gift for a recent ophthalmology graduate.
EBay has instituted a "Feedback" system, whereby buyers and sellers can post comments about their transactions -- in essence creating an in-house Better Business Bureau. This enhances the feeling of a self-governing community and helps minimize transaction problems between buyers and sellers. Check out eBay for yourself at www.ebay.com You'll find a complete listing of all the Soares Antiques Etc. collectibles on auction under "glenstuff" in the Seller List. I'm headed to the basement to dig out those old baseball cards.
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