WEEK 8 Blog
Raihan Chowdhury
ID: 30097405
Q1: eBay is one of the only major Internet "pure plays" to consistently make a profit from its inception. What is eBay's business model? Why has it been so successful?
Ans: eBay follows the brokerage business model where eBay unites buyers and sellers and acts as an intermediary by allowing a transaction to take place. They are essentially an auction broker who carry out auctions for individuals and charge a small commission fee based on the sum of the final transaction. eBay has been so successful because they were one of the first websites to stage online auctions. Today they are a worldwide organisation that provides an excellent service for customers to safely buy and sell anything that they desire.
Ans: eBay follows the brokerage business model where eBay unites buyers and sellers and acts as an intermediary by allowing a transaction to take place. They are essentially an auction broker who carry out auctions for individuals and charge a small commission fee based on the sum of the final transaction. eBay has been so successful because they were one of the first websites to stage online auctions. Today they are a worldwide organisation that provides an excellent service for customers to safely buy and sell anything that they desire.
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| Image : eBay Business Model |
Q2: Other major web sites, like Amazon.com and Yahoo!, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
Ans: Unlike eBay, Amazon and Yahoo have entered the marketplace with far less success than eBay. eBay has been able to maintain its dominant position by being a simple and trustworthy website that only charges a small fee for its service. Unlike other websites, eBay never runs out of stock, as it can only advertise what individuals are selling.
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| Image: Major Online Retailers |
Q3: What method does eBay use to reduce the potential for fraud among traders on its site? What kinds of fraud, if any, are eBay users most susceptible?
Ans: To reduce fraud among traders, eBay have developed a feedback system that gives all members the opportunity to rate another customer, after a transaction has occurred. If a member has been difficult to deal with or has ripped another member off, a negative rating will appear on the offending member's page for everyone else to see. eBay customers rely heavily on this feedback and many will not do business with a member who has received poor feedback.
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| Image: eBay Buyer Protection |
Q4: eBay makes every effort to conceptualize its users as a community (as opposed to, say "customers" or "clients"). What is the purpose of this conceptual twist and does eBay gain something by doing it?
Ans: eBay refers to its users as a community because it aspires to create a friendly culture where strangers from the around the world can do business with one other, instead of just being a straight website for merchants and customers. eBay benefits from this in the form of customers returning to the website, knowing they'll have another enjoyable and positive experience.
Ans: eBay refers to its users as a community because it aspires to create a friendly culture where strangers from the around the world can do business with one other, instead of just being a straight website for merchants and customers. eBay benefits from this in the form of customers returning to the website, knowing they'll have another enjoyable and positive experience.
Video: How eBay Works
Q5: eBay has long been a marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set-up shop on eBay?
Ans: A brand name vendor would set-up shop on eBay because it provides them with another avenue to expand their organisation and may reach a customer base that they wouldn't usually penetrate. It could also be cost effective for the organisation and allow their products to be seen worldwide, instead of just their native country.
Q6. I have a few businesses, and I have used eBay for about 12 years on and off. Currently I have about 600 books listed on eBay (seller name ozrural). I stopped selling on eBay for a few years but they changed the rules this July and it is viable again (for me). What do you think changed?
Q6. I have a few businesses, and I have used eBay for about 12 years on and off. Currently I have about 600 books listed on eBay (seller name ozrural). I stopped selling on eBay for a few years but they changed the rules this July and it is viable again (for me). What do you think changed?
Ans: In July, 2010, eBay changed their fixed price listings for books and music so it's now much cheaper for sellers than it was previously.
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