Topic Eight - Online Auctions

eBay is one a site i visit often. you can buy or sell almost anythings from brand new to used goods.  

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 use a Auction Brokerage business model this model:

• Brings the buyer and seller together
• charge a fee for advertising/listing
• They act as third party providers to the buyer and seller.

You could claim that is success has come from multiple aspects of the business/website

Its simple, easy and well organised which makes it quick and easy for users, they have a good strong reputation, safe payment options like pay pal etc.

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 is a strong well positioned organisation, which is the leader in online auctions. 
I believe it has a lot to do with the fact that eBay only operate as a third party broker and don't ever handle the products themselves, where as amazon tried to sell there own stock in a auction setting. As they are the leader in the market and are always improving there site, it would be hard for another organisation to match them.

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 prides itself on been a safe place to buy and sell, and keeps track (to a certain degree) that goods are what they say they are. With the feedback system you can see if the person you are buying from has a good or bad feedback score, but the main tool they use to reduce fraud is by encouraging the use of PayPal which reduces the risk of been scammed.

For Example a few months ago i was bidding to purchase a LV wallet on eBay when i checked to see if i had won the item had been removed and i had a message explaining that eBay removed the item as they believed it was a fraudulent/counterfeiter item.

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 does this so customers feel like they are more involved in the company, that the community all work together in a mutual agreement to buy and sell goods, they bypass the fact that they are a customer of eBay and are more appealed to the thought of dealing directly with people just like them. This is a classic conceptual twist, and in the long run they gain more business and members of the community(customers).

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?

I can understand why more and more business' are selling through eBay and i have purchased goods through some of my favourite brand through their eBay store. I believe this trend is coming from the popularity of online shopping, but they may not have the budget to set-up and maintain a full personalised website. eBay allows them to sell on line but only pay a small commission to list the goods.

My favourite feature about eBay is you can search for the one thing and have multiple of that item come up and you can compare prices etc.

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?

Since July 2013 is yet to come i did some research on changes made in July 2012 and could find very little that i though would have changed your mind so I'm going to pretend that the question asked about the changes in April 2013.

This April eBay introduced the seller protection program which now means sellers are offered more protection than ever before.
The new policy covers:

• Unpaid item protections
• Protections on seller feedback and ratings
• Actions sellers can take to help eBay with buyer protection case
• When and how sellers can report incidents that violate eBay policies