Weekly Exercise Topic 8 (Online Auctions)

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?

eBay is a company that's in the business of connecting people, not selling them things. eBay has built an online person-to-person trading community on the Internet. It has been successfully because eBay is the world's online marketplace; a place for buyers and sellers to come together and trade almost anything.

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?

eBay has been able to maintain its dominant position because, EBay’s success is its ability to bring customers and businesses together at a relatively low cost without barriers such as geographical location, language, race getting in the way. It has allowed a lot of people to become entrepreneurs through the sale of goods and provision of services over the internet.

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?

eBay does some very clear things in terms of trying to help people overcome their inhibitions and enter into transactions with what would otherwise be strangers to them.

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?

eBay believes in the concept that they can become a community. Community is fundamental to the economic success of eBay. EBay’s communities are varied and encompass different interests of the wider community with many of the boards encouraging users to build the communities that are fundamental to eBay’s economic success. There are communities based on trading, buying, hobbies and fun and games to name just a few. There is a social community that does not allow any business talk and discussions include parenting, religion and politics amongst other topics. EBay communities play a unique role in the Internet networked communities as opposed to the pre-internet economy. Trust is based on member feedback encouraging a community of collaboration and communication amongst its users. Members are producers of knowledge and share this with the wider community and this knowledge base is an asset to eBay. Its community members have a sense of ownership as their volunteer labor benefits themselves as well as eBay.

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?

In my opinion, its easy to brand name vendor to connect to over the world because it is very close. Then, the cost to the business is also very low. All transactions on eBay easy for the set. Popularity also an eBay account into focus the brand name vendor.

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?

I am not sure about that. What I know eBay change the picture quality requirements and change coupon policy.

References:

http://www.cs.brandeis.edu/~magnus/ief248a/eBay/history.html

http://pages.ebay.com/help/account/questions/about-ebay.html

http://www.ask.com/question/why-is-ebay-so-successful

http://teamcaffeine.wikidot.com/businessmodel-community