EBAY
1. Why has eBay succeeded as an online auction mar-ketplace while so
many others have failed?
First, eBay's success has really revolutionized prices by allowing buyers to determine
what they're going to pay for an item. The result satisfies both parties as the customer
has control and receives the best possible price while the seller makes a good profit due
to the effectiveness of the site and its extensive reach.
Second, the market facilitates the corporate fee structure. It attracts bulk sellers who
can increase eBay's revenue because they sell more than small sellers and contribute to
its success, encouraging more sellers and buyers to join eBay.
Third, eBay turned their site into a community, and they developed tools to help
strengthen trust among strangers. eBay expanded its response service in 2007 by
adding four different sellers: items as described, communicated, shipping time, and
shipping and processing rates. The rating is anonymous but visible to other buyers. The
highest-ranked seller appears at the top of the search results. Everything is done
objectively, and it's no surprise that more and more people are participating in auctions.
Finally, one of the main reasons that eBay succeeds as an online auction market is that
eBay is one of the first online marketplaces in the world. He came up with the idea of
an online auction when no one knew about Mark Zuckerberg and Facebook. It has now
become the largest online marketplace in existence.
2. Evaluate eBay’s fee structure. Is it optimal or could it be improved?
Why? How?
It earns its money by charging fees: the insertion fee per listing plus the final value fee
based on the auction or fixed price, allowing customers to pay less if they sell more and
vice versa. That's how eBay manages to attract large numbers of sellers who can
contribute to the success of the company.
However, such a fee structure still has some limitations. One of the most important
things is that it can scare small consumers because it often dramatically cuts their
income and profits. Admittedly, smaller consumers sell less than those who sell in
bulk. But they still make up a large portion of eBay visitors, and their needs need to be
considered as well. Otherwise, they may look to competitors or sell less than they can
sell. In addition, such a fee structure can be complicated for many visitors.
However, if you consider the profit that the organization earns due to the current fee
structure is largely due to the bulk seller. So it can be concluded that the risk of losing
small consumers is of little importance. That's why I believe eBay's fee structure is
optimal.
3. What’s next for eBay? How does it continue to grow when it needs both
buyers and sellers? Where will this growth come from?
If the organization needs more buyers and sellers, it is obvious that it must expand. I
think eBay should start operating in some developing countries because they show high
demand for selling and buying products at preferential prices. As an expansion
direction, BRIC countries can be considered (in addition to those that have been
included in eBay's shipping area) and some parts of Africa. Admittedly that would be
quite challenging, for example it happened with China, but it will significantly increase
the number of visitors and active users of eBay. So I firmly believe that eBay should
expand internationally.
In addition, although eBay's fee structure is quite optimal, both small and large
consumers should be satisfied. To do this, it is not necessary to deviate completely
from the current structure and lose high-volume sellers because of it. It will be enough
to give small consumers some bonuses that attract them. A variety of bonuses and
discounts can also be offered for many other reasons, such as to encourage multiple
purchases, etc. eBay can also invest more in its mobile apps and make the shopping
process more and more convenient for users.
Finally, many people are unhappy with the fact that a significant number of buyers
don't pay right away and can skip messages for a few days. While eBay has a specific
policy, addressing such issues, perhaps, they should make immediate payments to
solve the problem once and for all.