eBay (NASDAQ: EBAY) is a multinational e-commerce company that offers consumer-to-consumer (C2C) and business-to-consumer (B2B) sales through its website. The company was founded in 1995 and is headquartered in San Jose, California, United States.
Want to invest in one of the biggest names online? Here's how to buy eBay shares from Australia.
Want to buy shares in other US companies? Read our guide.
About the company
Originally reserved for auction-style sales, eBay has since branched out to include instant "Buy It Now" shopping, shopping via Universal Product Code, ISBN, and other services. The eBay platform is free for buyers to use, but sellers pay fees to list items and again when a sale is finalised.
Although eBay has many product categories, the top-selling is "Electronics & Accessories". By the end of Q1 in 2021, eBay had 187 million users worldwide across 190 different markets. More than half (57% in Q1 2021) of its revenues come from international operations, from its more than 1.7 billion listings.
The biggest chunk of eBay’s revenue (70% in 2020) comes from Marketplace transactions, through the online marketplace, its localised counterparts, and the eBay mobile apps. Marketing services and others (MS&O), in the marketplace and on classifieds as well as the online StubHub ticket platform, make up the rest of the revenue.
Like most e-commerce companies, eBay has performed well during the pandemic, showing revenue growth and growth prospects during 2021. The company is no stranger to weathering difficult trading conditions. Its 1998 IPO made it a notable success during the nineties dot-com bubble.
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Step 1: Choose a broker
Find an online broker that allows you to access the US markets. There are many options that you can access from Australia. Next, consider the features that you want from a broker. These are some of the most important:
This feature is offered by many platforms that provide access to US stock markets. You can save money on share trading by not paying commissions.
Fractional share investment
Fractional share investment means you can buy a portion of a share, rather than the entire thing.
It doesn't have to be difficult to trade shares. Make sure you choose a platform that is easy to use. New investors can benefit from educational guides and the ability to open a demo account.
Research, analysis, and reporting
A platform with a strong research and reporting section will provide you with important information about eBay, such as company overview, price history and recommendations, and forecasts.
Step 2: Fund your investing account
To buy eBay shares, you will need to fund the account. Keep in mind that may take some time for your funds to clear into your trading account and you will not be able to buy shares until it does.
Step 3: Set your budget for investing
It might be a good idea to start with fractional shares as a first step. You can also make a profit regardless of shares dropping, as you can buy in at the average share price.
Step 4: Decide whether to invest in shares or via an ETF
Investing via an ETF is widely regarded as more diverse compared to investing your entire outlay on a single share.
For exposure to eBay via an ETF, invest in Invesco QQQ Trust (QQQ), SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO).
Step 5: Configure your order
You can choose from a variety of order types to customise when and how much you want to buy for each share. These are the different order types.
Market orders are orders that can be purchased or sold at the current market price. However, the price that you are looking for may not match the one you receive. You may order eBay stock at US$1430. The price of eBay stock may drop to US$1427 or rise to US$1435 by the time the trade is executed.
Execution-only orders for buy limit orders are executed at the price quoted or less. You may wish to buy eBay shares at US$1428 per share. You can submit a limit order for this amount. It will only be fulfilled if the eBay share price falls below US$1428.
This type of order allows you to sell your shares at a certain price if the share price starts dropping. Let's suppose you want to sell your eBay shares if the price falls to US$1430 per share. Your stop limit order is executed if the shares drop to this price.
This is another mechanism aimed at preventing you from taking a hit on your shares if the price drops. You nominate a price at which you want to sell your eBay shares, for example, US$1425 per share. Your stop-loss order will be executed if the price falls to that level but your order will be filled at the next available market price.
Step 6: Place your order
After you've chosen a broker and decided how you want to invest, you can place your order through that broker.
When you invest in shares, it is necessary to watch share price movements and follow the company’s performance.
Watch for developments in global e-commerce
You want to be watching how the e-commerce industry performs. What moves are large players, such as Amazon, Alibaba, and Walmart, making? How do they go about increasing their competitive edge? How are smaller competitors trying to catch up?
Popular eBay alternatives for sellers include Etsy (NASDAQ: ETSY), Bonanza.com, eBid.net, and iOffer.com. But anyone who wants to sell anything online, anywhere in the world, needs to understand how the three titans of online sales operate, which include Alibaba, Amazon, and eBay.
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