The Real Truth about Ebay
Tuesday June 13, 2006
eBay was founded in Wausau, Wisconsin in 1980 as a new and used clothing and athletic goods store. Originally conceinved of by Rick Gering as a way to combine his experience in running the largest Modell’s franchise in the Great Lakes area (5 stores) with his wife Meg’s thriftstore. Art Juedes, Rick’s boyhood pal, was brought in as a financial backer and with little more than $7,000 worth of inventory and a dream, East Bay Trading LLC (EBT) was born.
EBT found immediate success with the burgeoning demand for basketball shoes in the 1980’s. Much of EBT’s early success can be attributed to Rick’s decision to create a mail-order operation, enlarging their market to the continental United States. The first EBT catalog was a one page price list. In 1983 that price list become a four-color catalog, featuring shoes for track and field as well as baseball. Operators were hired to take the orders, and by 1988, EBT’s call center, shipping and creative departments occupied an entire city block.
EBT was flourishing, but not everything was so rosy. Rick’s obsession with the company caused problems with his and Meg’s marriage. The thift store element of EBT was also being overshadowed by Rick’s mail-order business.
Meg was an early adopter of the internet. In 1994, she began frequenting the alt.fashion user group through a prodigy dial up account. On a whim, she put clothes from the store up for sale. Within 2 days, she sold 8 items. She realized she was onto something and had an online friend make a website for her. Originally located at doit.wisc.edu/~eastbaytrading, Meg’s first website was a list of items for sale. To buy something you sent an email to meg.gering@prodigy.net and then sent a money order.
Meg was selling items as fast as she could get them online. Her website gave her a sense of independence and enabled her to divorce Rick. The two split up in February of 1995, splitting up EBT as well. Meg kept the retail store and website, and reclaimed her maiden name of Whitman. Rick and Art kept the mailorder business, shortening the name to Eastbay.
Soon after the breakup, Rick and Art decided to make Eastbay a public company. On Friday, Sept. 29, Eastbay opened on the Nasdaq stock exchange at $19.50 a share. Two years later, shareholders sold the company to retail giant Woolworth for $146 million.
Meg registered the domain name ebay.com and hired a staff of three people. One person to maintain the website and two others in charge of purchasing used clothing. The retail store stagnated and the website continued to boom. In 1996, Meg decided to close the retail store and focus on the website. She created a section of the website where other vendors could list and sell their products. The website Etsy.com is a modern incarnation of what eBay was at this time. Later that year, eBay introduced auction functionality as an option.
The website continued on it’s climb upward, and by 1998 had a staff of 10. In 1998, Max Levchin founded Paypal and set the foundation for eBay to become what it is today. On September 24th, 1998 eBay went public.
Rick admits today that he is jealous of Meg and the business that she created. “I wish I could have been a better husband. And not just because she created eBay, but because I loved her. She’s the best woman I’ve ever met and she was always supportive. Hell, she was the one who suggested mail-order to me in the first place.”
Meg and Rick both still live in Wisconsin but have not talked in years. To this day, they play active roles in their own companies and they own stock in each other’s companies.