1. 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?eBay is a major auction service on the Web. It promoted the theory of buying and selling online, and both individuals and commercial enterprises list items for sale. There is no charge to browse the site or make bids and purchases, but there is a fee to list items. If an item is purchased, the seller pays eBay an added fee. Numerous items are offered, and billions of dollars’ worth of merchandise is sold every year through this service.
eBay follows the brokerage business model where it links buyers with sellers, or vice versa. Its success is based on its ability to transform many small markets into one large global market at a small cost to its users. In the past, people have bought and sold used and collectible items through garage sales, classified advertising in local newspapers, and flea markets. However, the number of people available to complete a transaction was limited because a face-to-face meeting was typically required.
2. 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?
eBay, Yahoo! and Amazon are all popular sites for online shopping as they provide consumers ample convenience. Amazon and Yahoo! operate similarly to regular stores and offers stocks of the products to consumers. They are required to offer some level of service and warranties to customers. In contrast, eBay is not an online store, it is an auction house and it does not actually sell anything. eBay is a site where people go to buy and sell their stuff.
The reason why eBay is so successful is because it facilitates the transaction between buyers and sellers. With eBay, you are basically dealing with another person and not the site itself. In case your transaction goes awry, eBay is not legally bound to compensate you. eBay does not control the price or quantity sold. It leaves it up to the forces of supply and demand in order to reach equilibrium.
http://www.differencebetween.net/technology/internet/difference-between-ebay-and-amazon/)
3. 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?
The methods that eBay used to reduce the potential for fraud among traders are that it never asks for personal, identifying information in an email. In addition, eBay has a feedback system that enables consumers to give a positive, negative or neutral rating, along with a short comment. This information is available in each member's Feedback Profile, and helps prospective trading partners buy and sell with confidence.
The main types of fraud that eBay is susceptible to are:
• Unwarranted returns: Occurs when an item is purchased, used and attempted to be returned for a refund after the buyer has tampered with it.
• Service blackmail: This occurs when a buyer uses some kind of power to obtain better pricing, additional goods or accessories, or enhanced service from a seller.
• Payment fraud: The most common types of payment fraud are credit card fraud and PayPal payments made with stolen accounts, both of which can leave the seller holding the bag. Also common are bad checks or bad money orders.
• Auction tampering: Occurs when a buyer bids for an item with no intention of ever paying for it.
(http://ebay.about.com/od/resolvingdispute1/a/rd_buyerfraud.htm)
4. 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?
eBay sees its customer base as a community as it believes that everyone is a unique individual and has something to contribute. By allowing customers to contribute to all aspects of its planning and decisions, it has made the company an evangelism marketing pioneer. Customers feel valued which builds their loyalty to the company.
5. 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?
As the Internet is becoming more prominent compared to bricks-and-mortar stores, an increasing number of businesses are utilising eBay as another avenue to sell their wares. The reasons for this are due to the convenience of online shopping, and the ability for the market to set the price. Setting prices can be difficult to establish, especially in regards to new product releases. If prices are set too high then inventories increase. But setting the price too low creates product shortages and lost revenue. Setting up shops on eBay increases brand presence, which also can result in increased brand loyalty as customers can provide feedback if they are satisfied with a product.
6. 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?
According to eBay.com.au, the change that eBay made from 14 July 2010 was new accepted safer payment options for sellers. The revised policy requires sellers to offer one or more of the following three safer payment methods to buyers: PayPal, Paymate or Merchant credit card. The change provides both sellers and buyers increased choice among safer payment options. In addition, increasing the number of accepted payment methods also helps eBay develop an enhanced checkout experience in line with industry best practice.
• Unwarranted returns: Occurs when an item is purchased, used and attempted to be returned for a refund after the buyer has tampered with it.
• Service blackmail: This occurs when a buyer uses some kind of power to obtain better pricing, additional goods or accessories, or enhanced service from a seller.
• Payment fraud: The most common types of payment fraud are credit card fraud and PayPal payments made with stolen accounts, both of which can leave the seller holding the bag. Also common are bad checks or bad money orders.
• Auction tampering: Occurs when a buyer bids for an item with no intention of ever paying for it.
(http://ebay.about.com/od/resolvingdispute1/a/rd_buyerfraud.htm)
4. 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?
eBay sees its customer base as a community as it believes that everyone is a unique individual and has something to contribute. By allowing customers to contribute to all aspects of its planning and decisions, it has made the company an evangelism marketing pioneer. Customers feel valued which builds their loyalty to the company.
5. 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?
As the Internet is becoming more prominent compared to bricks-and-mortar stores, an increasing number of businesses are utilising eBay as another avenue to sell their wares. The reasons for this are due to the convenience of online shopping, and the ability for the market to set the price. Setting prices can be difficult to establish, especially in regards to new product releases. If prices are set too high then inventories increase. But setting the price too low creates product shortages and lost revenue. Setting up shops on eBay increases brand presence, which also can result in increased brand loyalty as customers can provide feedback if they are satisfied with a product.
6. 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?
According to eBay.com.au, the change that eBay made from 14 July 2010 was new accepted safer payment options for sellers. The revised policy requires sellers to offer one or more of the following three safer payment methods to buyers: PayPal, Paymate or Merchant credit card. The change provides both sellers and buyers increased choice among safer payment options. In addition, increasing the number of accepted payment methods also helps eBay develop an enhanced checkout experience in line with industry best practice.
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