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?
According to Rappa, eBay acts as a broker, bringing buyers and sellers together and taking a listing fee on products listed over its site and a commission on things sold. Indeed, eBay’s business model is the broker model.
EBay is the World’s Online Marketplace and created the first online broker business model with a powerful platform for the sale of goods and services by a community of individuals and businesses. The community of individuals deals amongst themselves. There are millions of items across several categories for sale on eBay that enables trade on a local, national and international basis with customized sites in markets around the world. That is the reason why, eBay has been so successful.
Q2: There are a number of other online auction sites in Australia as well. Name two and briefly describe them. Had you heard of them already? Why do you think they are not as popular as eBay?
GraysOnline: GraysOnline is an Australian online retail and auction company, offering a huge range of consumer, industrial and commercial goods, direct from manufacturers and distributors. It offers to customers great value and convenience and to vendors an efficient alternative sales channel.
GraysOnline is not as popular as eBay because their consumers are only manufacturers and distributors although eBay platform enable any buyers and sellers whatever their positions.
Quicksales: Quicksales is an Australian online Auction and Shopping site. Quicksales is dedicated to providing Australians with a safer, affordable and more convenient way to buy or sell virtually anything online at anytime. Quicksales has currently over 500,000 members with over 420,000 items listed for sale.
Comparing to Quicksales, eBay has millions of items across thousands of categories for sale and has over millions members from all around the world.
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 major method that eBay uses to reduce the potential for fraud among traders on its site is the use of feedback under a system of rating. Indeed, this feedback is produced by the buyers and sellers on the website on every transaction. During the transaction, the buyer will need to leave the seller a feedback and vice versa. The feedback rating system is as follow: it can be positive, neutral or negative regarding the grade average. Another method that eBay has adopted to eliminate fraud is that all members which are selling an item must offer PayPal as a method of payment.
The kind of fraud that eBay users are more susceptible to are:
• When a member buys and pays for an item and the seller does not send the item.
• When a member buys and pays for an item that might not expected.
• When a member has several eBay accounts in order to rate himself and have a “fake” good reputation on the platform.
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?
The purpose of the conceptual twist of conceptualizing its users as a community is that by being a part of a community, members are feeling like a part of a special group in the platform. However, each members of a community share the same values and objectives which are based on open and honest communications. Indeed, eBay gains customers loyalty in order to get more and more users.
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 would set up shop on eBay because more and more people are buying items online thanks to the convenience of shopping online. As eBay is increasing in popularity continually, it would be logical that more businesses would sell on eBay to increase its level of recognition and to increase in popularity. According to Rappa, it can be seen as a “means of expanding their business to reach new customers and to explore different ways of pricing their product”.
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