eBay, SBA Team Up

Tuesday Jul 1st 2003 by SmallBusinessComputing.com Staff
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The World's online marketplace and the U.S. Small Business Administration are joining forces to provide e-commerce solutions for small businesses. Meanwhile, eBay shores up its buyer and seller protection programs.

eBay and the U.S. Small Business Administration (SBA) signed a letter of intent to collaborate on ways the two organizations can work together for the benefit of small businesses across the country. This new relationship will focus on providing training, education and information to entrepreneurs, with an emphasis on management issues, financial assistance, government contracting and international trade.

Small business owners and their employees have a significant presence on eBay. It is estimated that 150,000 people have full- or part-time jobs selling on eBay. In addition, according to a recent small business survey conducted for eBay by Decipher, an independent research vendor, an estimated 20.4 million eBay users are employed in small businesses consisting of fewer than 100 employees.

The relationship between the SBA and eBay was kicked off at eBay Live!, eBay's annual community conference, held last week at Orlando's Orange County Convention Center. At the conference, SBA Administrator Hector Barreto held a Town Hall meeting to connect with eBay's small business owners and help them tap into the troubleshooting tools and financing programs available through the SBA.

"As an advocate for small businesses, it's the SBA's mission to provide the best tools to help owners succeed," said Barreto. "By joining forces with eBay, we offer millions of small businesses nationwide new ways to grow their operations."

Barreto said among the services that eBay users could tap with the help of the SBA were financing programs like micro-loans as small as $1,000, venture capital backing and the consulting support of retired executives who specialize in working with small businesses and start-ups.

"eBay, like SBA, is focused on enabling and empowering small businesses all over the United States," said Meg Whitman, president and CEO of eBay. "By working together, we can help provide solutions to small businesses."

In a keynote address at eBay Live!, Whitman outlined eBay's newest initiatives in areas that most affect its buyers and sellers — trust and safety measures. Whitman underscored the progress the company has made in its ongoing efforts to minimize fraudulent activity on the site when she announced the company's plans to introduce a buyer protection program through PayPal.

"Every eBay employee gets up in the morning thinking about how to make the site better for you to use. In every decision we make, in just about every part of the company, we try to take into account the impact on you, the user," said Whitman to an audience of more than 10,000 eBay members. "We understand that eBay succeeds only if you succeed."

One of the new buyer protection programs aims to build trust between buyers and sellers. Beginning this fall, the company will increase the amount of buyer protection available to $500 with no service fees. The new plan will cover about half of all listings on eBay and will be available in the United States and Canada. The program will cover non-delivery of items and items that are substantially not as described.

In order to protect sellers from non-paying buyers, eBay will begin this month to limit the number of bids a user with non-paying buyer complaints can make. Additionally, the company is currently experimenting in select categories with Immediate-Payment, a PayPal solution that effectively removes the risk of non-payment by automatically charging the buyer's credit card or bank account on Buy-It-Now transactions.

To help support its PowerSeller community, eBay introduced a co-op advertising program that enables high-profile sellers with an eBay Store to be reimbursed by eBay for 25 percent of print advertising fees, up to a maximum of $8,000 per quarter.

The company views this program as a scalable marketing tool to help sellers grow their businesses. During the testing period, PowerSellers who included the eBay Stores logo with their eBay Store URL in print ads saw a 76 percent increase in gross merchandise sales, a 34 percent increase in average selling price, and a 27 percent increase in bids.

During the past 12 months, eBay has added approximately 150 innovations to the site that are aimed to help buyers and sellers trade more effectively. According to Whitman, one of the most important enhancements was the acquisition and integration of PayPal for a more streamlined and accelerated payment process. Now, more than 80 percent of the listings on eBay.com offer PayPal as a payment option.

Whitman also noted some preventative measures the company is proactively taking to guard against spam, spoof e-mails and account takeovers. The company has instituted a policy that limits members' requests for contact information of other users to user identification numbers only.

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