Week 8 questions:

Notes: The nature of (online) auctions has changed from selling mainly collectible goods, to selling everyday items. Businesses can use auction sites in many different ways from selling excess inventory, to sourcing materials to using them for promotional purposes.

Refer to the power point and Managing the Digital Enterprise, then answer the following questions –

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?

In reference to: http:(//teamcaffeine.wikidot.com/ebay), Ebay employs an “online person-to-person trading community on the Internet, using the World Wide Web.” EBay consistently thrives upon a large market, while targeting over 30 countries. A buying and selling station that has auctions, buy it now and best offer selling tools. EBay has basically replaced catalogue browsing, an online wave has never been more popular due to the ability of consumers to sell to other consumers (as well as), businesses able to sell to consumers. Brand association of EBay is at a all time high, buyers are attracted to purchasing items from legitimate sellers who have high rating feedback associating with their trading on EBay. EBay is even more powerful as it has recently purchased the rights to Paypal, an online site where you can pay for your goods.

Q2: Other major web sites, like Amazon.com and Yahoo!, entered the auction marketplace with far less success than eBay. Are they still offering auctions? How has eBay been able to maintain its dominant position?

In reference to: (http://www.investopedia.com/articles/investing/052615/ebay-vs-amazon-business-model.asp), EBay is known for its ease of use when it comes to the payment process. Amazon has a more complex structure, as users wanting to sell can list as a personal account or a professional account. In comparison to EBay, Amazon is hard to navigate and has a more technical payment process especially when it comes to add on fees for listing an item and securing the sale. This is why EBay has been able to be more dominant, because of the ease of navigation, customization ability and easy payment methods. Amazon does not offer auctions but does allow buyers to send in best offers or to bargain with the sellers, allowing them some leverage. According to: online-auction-sites.toptenreviews.com, Yahoo! Auctions officially stopped posting auction listings on June 3, 2007, with all auctions terminating later that month.

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?

The following answer references (http://digitalenterprise.org/cases/ebay.html). Ebay allows it’s user to search through safety aspects on its website. Within the ‘security center’ you can choose any of the following options;

Welcome to eBay’s Security Center where we’ve provided resources to keep your eBay computing experience a safe one.

There are not only options for users to browse safely, the reporting of fake accounts is a major player in protecting people from fraudulent sellers or buyers. You can either alert EBay through email and have them deal with fraud, throughout the buying and selling process they also provide secure transactions through reliable payment services such as Paypal. There is also a rating system where all buyers and sellers have all of there prior feedback levels displayed for all consumers. People will only buy from sellers who have high reports of good feedback thus eliminating the chances of fraud.

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 intends to invite buyers and sellers to the site. There is no discrimination against large, small or independent businesses. A ‘community’ is a way of encouraging the ‘eBay community’ to trade with each other but only through the E bay platform. It means that a person using the site views themselves as not only buyers, but also potential sellers and in hence of that, more revenue will be generated through more engagement by community members.

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?

Brand name vendors are always looking new selling platforms and it is free to join and sell on eBay! That means more views and traffic to their brand and potentially their site. Plus businesses may not have an auction tool for their products on their original site. eBay can allow them that freedom and the possibility of achieving a higher price for their goods (due to consumer competition within auctions). Businesses can sell more products and gain a broader eBay market by gaining great feedback from it’s buyers, thus strengthening the business to customer relationship as well as selling business to business.

I have a few businesses, and I have used eBay for about 14 years on and off. Currently I have about 300 books listed on eBay (seller name ozrural), and I also use it to promote my framing business (by advertising a few frames for sale (seller name Kazbaah). I stopped selling (books) on eBay for a few years but they changed the rules in July 2014 and it is viable again (for me) in a limited way  What do you think changed?


Ebay probably wanted to regulate how many large brands or businesses listing a higher amount of items, so that they could not outsell all other buyers in the category. As it promotes a real community feel, they want to make smaller sellers feel as if their products are also going to be sold alongside businesses who can mass produce products. Also they may have removed the option and re-added it once other sites such as Etsy or Amazon, had the option so naturally e-bay needed to compete with these other communities.



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