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Consumers to Consumers

Background

EBay is one of the World Wide Web's most popular online auction sites and one of the world’s largest online trading communities. It allows Internet users to buy, sell, or trade a host of items online using a bidding mechanism or "auction" process. EBay is an online forum for selling nearly 4,500 categories of merchandise. The company, which generates its revenue through listing and selling fees, boasts some 16 million registered users.  EBay is offering new services (business-to-business auctions, larger ticket items such as used car auctions) and expanding into new geographic areas  (Australia, Canada, Japan, the UK) through new site launches, acquisitions, and joint ventures.

EBay was one of the first companies to offer a consumer - to - consumer (C2C) marketplace. This product along with feedback forums and other customer services, gives EBay a distinct and unique advantage over its competitors.  Also, by partnering with Internet service provider powerhouse America Online, Ebay is able to leverage its pioneering and branding advantage even more by exposing its services to America Online (AOL) customers. Most Internet users visit Ebay because they have heard of the name (branding) or because they are referred to it by a popular Internet portal (such as Yahoo).

 

Product Service Offering

Many users appreciate Ebay because of the feedback features that tell if users are legitimate sellers or if a user has had a bad experience with an online seller or buyer.  This builds trust in the Ebay online auction system.  Customers also like the ease of signing up and the ease of conducting online bids. Ebay was one of the first companies to offer Internet users a C2C (consumer to consumer) online business model.  It gave users a unique opportunity to form communities with other users who had similar interests or hobbies while at the same time offering each user the ability to market his or her own product offering. Ebay offers value to a large and broad audience. Although Ebay is primarily used by U.S. consumers, many other international regions such as the United Kingdom also use EBay. 

Ebay’s leading capabilities include their marketplace presence and the ability to conduct C2C transactions on the Internet.  While Amazon.Com and Yahoo.Com have been able to duplicate their online auction efforts, Ebay retains its customer base by offering feedback forums, and other community-related tools to create a self-governing, self-monitoring body of customers.  Switching costs are very high for the consumers because they lose such a large base of potential buyers of their respective online auction items.  Ebay is five times larger than Yahoo’s auction site and is twenty times larger than Amazon.Com’s auction site. Because of pioneering efforts and branding, Ebay is able to sustain its competitive edge. They are now able create new e-commerce ideas (such as wireless Ebay transactions) and pioneer new C2C avenues for its customer base.

 

SWOT Analysis 

Strengths:

·        Easy for consumers to signup

·         Feedback feature that tells if users are legitimate sellers or if a user has had a bad experience with an online seller or buyer - builds trust

·         Processes to monitor online auction fraud

·         Trust factor - has built an online community of users with common interests

·         Branding - became a popular brand name with the advent of the "Furby."

·         Stickiness - different events and links on a daily basis keeps customers coming back for more

·         International appeal in this business model (most customers are English speakers) but there are also other languages www.ebay.de, etc.   

Weaknesses:

Opportunities:

Threats:

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