Strategy of eBay

Today, eBay's mission is "to provide a global trading platform where practically anyone can get by practically anything" ("Company Overview," 2003). Founded in 1995, eBay began its existence as an online vendue service. Sellers (who must register with the office) list decimal points for trade and, optionally, a lower limit value (as well as a reserve bell below which they will not distribute the relic). Today, shifters also beat the option of setting a intractable price ("Buy It Now") that enables customers to get the item at a predetermined price and eliminate the bidding process. Buyers have a predefined period of time during which they may bid on items after which eBay validates if a bid exceeded the minimum price and the reserve. If the bargain was successful according to these criteria, eBay notifies the buyer and seller through electronic mail and they consummate the sale, including arranging for shipment and buy offment. At the time of the netmail notification, eBay's involvement in the transaction is concluded. The site is not responsible for either payment or shipping (2001 Annual Report, 2002).

Buyers ar not super supercharged for bidding on an item, nor are they charged for having the successful bid at the end of an auction. Sellers are charged a situation fee based on the minimum scratch line price (the highest placement fee is $3.30 for a starting price of $50 or more). In addition, sellers can pay additional placement fees for special services, such as

eBay has recently expanded its site in ii significant and different directions designed to bring in some(prenominal) revolutionary buyers and sellers. The company introduced the "Buy It Now" feature that allows buyers to purchase items without bidding, but by paying a specific price set by the seller. Also, the company has brought corporate customers to the site merchandising new items.

Companies such as Disney now regularly sell merchandise on eBay, and may be a see market opportunity for eBay, helping to boost its revenues to more than $1.2 one thousand thousand in 2002 (Roth, 2003).

Although bringing in large companies selling new products has helped boost the eBay's revenues, it has resulted in some disgruntlement among eBay's traditional--and smaller--sellers (Pitta & Burnson, 2003). These sellers may be automatic to abandon eBay for a more attractive auction site that caters to their needs rather than mixing new and used items together.

When an auction is successful, eBay charges the seller a final exam exam value fee (the placement fee is charged regardless of whether or not the auction is successful). The final value fee is based on the final selling price, and is calculated as 5.25 percent of the first $25 of the price, plus 2.75 percent of the price from $25.01 to $1,000, and an additional 1.5 percent of the price over $1,000 (2001 Annual Report, 2002). Thus, the final value fee for an item that sells for $15 would be $0.79 (5.25 percent) and the final value fee for an item that sells for $500 would be $14.38. An item that sells for $10,000 would have a final value fee of $163.13.

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