EBay’s E-business Model Essay - Essay Prowess

EBay’s E-business Model Essay

EBay’s E-business Model Essay

  1. What is eBay’s e-business model and why has it been so successful?

eBay’s e business model is based on the traditional auction business and incorporated integrated e-commerce into the traditional auctioning model. eBay set into play an effective and feasible marketplace where willing sellers lay down a minimum price for products they are willing to sell. Buyers then offer the price for which they are willing to pay for that particular product on auction and as such place bids which determine who among the willing buyers places the highest bid for that product. The buyer who places the highest bid then electronically pays for the product and eBay ensures that it reaches the buyer at the agreed quantity, quality, time, and place.

eBay owes it success to the strong feedback mechanism allowing for buyers and sellers to grade each other such that fraud is minimized as the community of registered users at eBay police the trading activities of each other. This has essentially created a community that is founded on trust and fair play. It also came at a time when the nation was craving for new and innovative services, an opportunity that Pierre Omidyar capitalized on. It offered a very wide network based on the internet. A potential buyer could then choose a product he or she would want to purchase from a wide range of similar products put on auction from all corners of the US. eBay ensured and continues to ensure that the product paid for reaches the buyer at the right quality quantity time and place.

  1. How has eBay’s strategy changed over the years?

To add value to its service provision, eBay continued to strategically launch a series of e-commerce related business ventures which improved customer experiences at eBay. To be able to respond effectively to the dynamic market place conditions prevalent in e-commerce, eBay invested in launching PayPal, an online financial services provider. EBay bought PayPal and made it an eBay subsidiary to allow businesses and individuals with a registered email address to quickly and easily receive or send payments on the internet platform in a very secure manner. PayPal allows for global participation and its fraud management apparatus makes it stand out from its competition. eBay also bought Skype which allows users to make high quality voice calls which are not only unlimited but also free. eBay bought Skype to allow buyers to get information from sellers on a need be basis which has allowed for the growth of buyer seller relationships over eBay.

  1. eBay has long been an e-marketplace for used goods and collectibles. Today, it increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set up shop on eBay?

eBay is an already established brand in itself and together with its subsidiaries, it has set up both the infrastructure and number of registered users that is enviable in the most modest of words. PayPal alone has over two hundred million registered users and eBay has a global market reach. Its online communications and payment mechanism are among the best in the world and as such this is a winning combination for any brand name vendor wanting to set up shop at eBay.

  1. What are the three different types of online auctions and which one is eBay using?

There are three major types of auction and these include direct auction, reverse action and haggle auction.

Reverse auction operates such that the buyers gives specification of the product they are willing to purchase as well as they highest price that they are willing to buy the product for. For the haggle auction, sellers and buyers make offers as well as counter offers until when they reach to an agreement that favors both parties.

eBay follows the direct auction model whereby buyers continue bidding for a price upwards and the one offering the highest bid gets to buy the particular item.

  1. What are the different forms of online payment methods for consumers and business? How might eBay’s customers benefit from the different payment methods?

There are five popular forms of online payments for businesses and consumers these include credit cards, PayPal, E-check, wire transfer, and cash on delivery.

eBay customers can benefit a great deal for using credit cards as most consumers opt to use their credit cards as it is a secure means to make online payments. For businesses accepting transaction payments through credit cards it is necessary to maintain a merchant account so as to be able to make and accept payments through the established credit card companies MasterCard, Visa, and American Express.

PayPal is a great way to make online payments for businesses and customers as it is tailor made to cater for eBay users. It allows eBay participants to send money online through credit cards or bank accounts. It does not require a merchant account for businesses to make or receive payments online for transactions made on eBay.

E-checks are recommended for eBay customers without credit cards though it requires a lot of information from the customer creating room for error.

Wire transfers are ideal for large transaction over eBay as there is no chargeback, check bounce, or credit card decline.

Cash on delivery allows eBay buyer to pay for goods once they are delivered.

  1. Which metrics would you use if you were hired to assess the efficiency and effectiveness of eBay’s Website?

The most appropriate metrics to check this would to use click-through so as to determine many buyer and sellers access the eBay website from other sites, through banner ads to show how many people link to the eBay website from banner ads posted on other websites. Viewing the number of pages viewed by a visitor to know the number of pages presented to a visitor or customer, pattern of the websites accessed as well as the most used exit page and frequently visited prior website. Length of time a customer stays on the website, dates and times visited so as to find out buying habits.