With the advent of Web 2.0 around the turn of the millennium, the Internet took on a new role in society. One of the major characteristics of this new version of the internet was its interactivity and ability to facilitate transactions, whether they be business-to-customer, as with Amazon, or customer-to-customer, as with eBay, specifically in its initial incarnation.
Predictably, this convenient and readily available new style of commerce—appropriately dubbed ‘e-commerce’—gained traction with the public very quickly. As consumers all over the world rushed to take advantage of the brand-new digital marketplace, the golden age of the giant tech companies began.
In particular, eBay saw a tremendous amount of early success by popularizing the concept of online auctions. This platform allowed people to buy and sell a wide range of goods through competitive bidding, and quickly became synonymous with online auctions, attracting millions of users worldwide. Its wide variety of wares, robust feedback system, and secure payment options, including its acquisition of PayPal in 2002, solidified eBay’s reputation as the trusted online marketplace of choice.
For many years, eBay acted as a virtual monopoly in the online auction space. Although it technically had some competitors, such as eBid and Bonanza, these sites offered little to differentiate themselves. They primarily offered niche products and price reductions in an effort to siphon users away from the online auction Behemoth, but in the end, did not put much of a dent into its market share. If eBay was Coca-Cola, then eBid and Bonanza were Fresca and Mr. Pibb. And for about a decade, the online auction space had no Pepsi.
However, in 2009, a company was founded that would later come to challenge eBay’s pre-eminence in the field of online auctioneering: DealDash. What made DealDash so different was its auction model, which was an innovative approach that combined buying up excess inventory from high-end manufacturers for resale and re-engineering the dynamics of online user bidding—a model it still uses today.
According to the DealDash model, users purchase bid packs rather than making direct offers that can be countered, as is typical on eBay and similar platforms. This unique mode of operating allows DealDash to host auctions where bidders increase the price by a small amount and extend the auction time with each salvo, creating an engaging and competitive environment. DealDash also features a ‘Buy It Now’ option that lets bidders purchase items at retail price and get back their spent bids, which eBay doesn’t offer, making it a distinctive feature in the auction marketplace.
As the 2000s turned into the 2010s, the platform steadily gained popularity, surpassing eBay’s lesser competitors, and nipping at the heels of the tech giant itself. DealDash’s user-friendly interface and unique auction model attracted a diverse demographic of buyers, cementing its position as a formidable player in the online auction scene. This period also marked a pivotal shift in online consumer behavior, with more users opting for DealDash’s dynamic bidding experience over traditional auction formats. It seems that, given the option, many people didn’t want to just bid on items, but wanted to participate in auctions that offered both excitement as well as the ability to make direct purchases if they lost out.
Ultimately, DealDash took a not insignificant chunk out of eBay’s market share, which remains the case to this day. While the two companies are not truly comparable in scale or profitability (eBay is by every measurable standard a much larger entity, operating in the realm of billions of dollars in annual revenue and gross merchandise volume), there now exists a Pepsi to eBay’s proverbial Coca-Cola. Whereas it was once the prevailing wisdom that eBay’s hold on online auctions was unbreakable, DealDash’s dedicated and growing customer base has disproved that, offering hope to plucky, upstart e-commerce companies everywhere.
