Scribd
Upload
230 views2 pages

Ebay (A) : The Customer Marketplace

eBay provides an online marketplace that allows individual sellers to list products for sale and buyers to bid on those products, with eBay acting as an intermediary but not owning or storing inventory. The marketplace is driven by users who list new product categories and provide feedback to eBay. While large corporate sellers can bring more sales volume, eBay needs to ensure it protects the personalized experience buyers expect from individual sellers to retain customers.

Uploaded by

Nikith Nataraj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
230 views2 pages

Ebay (A) : The Customer Marketplace

eBay provides an online marketplace that allows individual sellers to list products for sale and buyers to bid on those products, with eBay acting as an intermediary but not owning or storing inventory. The marketplace is driven by users who list new product categories and provide feedback to eBay. While large corporate sellers can bring more sales volume, eBay needs to ensure it protects the personalized experience buyers expect from individual sellers to retain customers.

Uploaded by

Nikith Nataraj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

eBay (A): The Customer Marketplace

1. Evaluate the performance of eBay particularly in relation to traditional retailers like Wal-Mart &
internet retailers like amazon.com.

Ans.

By January 2002, eBay’s profits had risen to $129 million profits. Exhibits 5 through 7 provide the income
statements of eBay, Amazon and Wal-Mart respectively. It can be seen that while Amazon has higher
revenues in 2001 compared to eBay, it is expending a lot in the operations which is leading it to function
in a loss of about half a million dollars. It is spending a lot for the fulfilment centers and incorporation of
technology in the operations. eBay on the other hand is spending more on the sales and marketing and
admin overheads. Wal-Mart on the other hand is at a different scale. The revenues are in the scale of
hundreds of billions of dollars with profits around $6 billion in 2001 (around 50 times the size of eBay).

2. What is eBay? What service is eBay providing to buyers? Sellers? What is the role of customer in
providing the service?

Ans.

eBay is a platform that has created an open market that encourages honest dealings between willing
sellers and buyers, to conduct business with strangers over the internet. It is a truly internet business
that maintains no inventory and managed neither inventory nor warehousing. Sellers have to list their
products on the site and willing buyers bid for the listed products. The winning bidder is allowed to
communicate with the seller to further complete the transaction.

The marketplace on eBay was controlled vastly by the members in that they provided new ideas and
product categories in addition to their products and services. For example, eBay noted that users were
listing cars in the miscellaneous section and set up a new category, eventually, a separate site for cars. It
was a great move since they were trading close to $1 billion n 2001 just from cars. The users also drove
decisions on how the site operated and the company could not take unilateral decisions about eBay’s
user base. The result of efforts to incorporate users’ opinions are the feedback loops in which the users
can participate in before eBay hardcodes any changes on the site.

3. Should eBay be concerned about increased involvement of corporate as sellers? Why?

Ans.

eBay was treating its corporate participants differently from other eBay sellers where they were given
extra support but were also required to maintain stricter selling and rating quotas. But many sellers
were unhappy with the increasing presence of corporate sellers on the platform because they felt that
the corporate sellers were cutting into their businesses. eBay anyhow found the potential volume of
sales by corporate sellers very attractive since it was positively impacting the revenues of eBay.

But from the buyer perspectives, the buyers felt that the interpersonal communications during the
purchase was highly limited with the corporate sellers. The community of buyers were accustomed to
high level of interpersonal communications with the smaller sellers, so this should be a cause of worry
for eBay. Also, some community members opined that even though computers and cameras might
generate revenue for eBay, it was the rare items which drew customers back and encouraged new users
to join. eBay had to find ways in which it could protect the experience of the buyers like it has been
before to retain them.

4. You might like to visit the eBay site and assess it from the point of view of an internet user.

You might also like