Current Strategies Of Ebay Essay Example

of 2% in the number of shoppers in March 2009, resulting in 1.5 million fewer shoppers that month. This decline can be attributed to eBay's attempts to transition into a retailer, as customers have been lured by other websites offering better shopping experiences, lower prices, improved customer service, and reliable deliveries. In February 2008, 41% of eBay visitors also shopped at Amazon; however, this percentage increased to 53% in the previous month. On the other hand, the proportion of Amazon visitors who also shopped at eBay remained steady at 58% during this time frame. Hence, it can be inferred that eBay's fixed pricing strategy has failed to attract a substantial number of new shoppers.

BookSalefinder.com has published the findings of a survey conducted among numerous used book sellers. The survey focused on the various online platforms for book sales, each with its own regulations and charges. A considerable number of book dealers listed their books on multiple online services, while some even maintained personal websites for selling purposes. For our survey, we requested sellers to identify the online platform responsible for at least 50% of their sales. The majority of respondents (60%) cited Amazon as their primary platform, with eBay being a less popular choice.

EBay is increasing Final Value Fees (FVFs) for items of various selling prices. Currently, items sold for less than $25 are charged 5.25% of the closing value, which will be raised to 8.75%. However, items that sell for between $25.

Currently, the calculation involves taking 5.25% of the initial $24 and adding 3.25% of the remaining closing value balance to equal $1,000. In the future, this breakdown will change to 8.75% for the

initial amount and 3.5% for the remaining balance.

Although eBay is making efforts to reclaim its original position as an auction site, it may not be sufficient in convincing users who have migrated to alternative platforms. The e-commerce sector has undergone substantial transformations since eBay's inception over a decade ago. Consumers today possess greater knowledge about discovering online bargains and take into account multiple factors beyond price before making purchases. They anticipate a particular level of service that eBay, functioning as an intermediary, might encounter challenges in effectively managing.

The main focus for eBay should shift towards enhancing the shopping experience for buyers and sellers rather than solely concentrating on product strategy, as continuous tinkering is causing more harm than good. Currently, eBay provides a feedback system that enables buyers to rate sellers by leaving positive or negative comments. Conversely, sellers are only allowed to leave positive feedback for buyers. Previously, prior to January 29, 2008, both the buyer and seller had the ability to rate each other at the conclusion of a transaction. They were given the option to rate their experience as either "positive," "negative," or "neutral" while also including a comment with a maximum length of 80 characters. However, following CEO John Donahoe's announcement, sellers lost their ability to leave anything other than positive feedback for buyers due to complaints from buyers who received negative feedback in retaliation after leaving negative feedback about the seller.

Critics argue that the weakness of the feedback system is that small and large transactions are treated equally in the feedback summary. This makes it simple for dishonest users to manipulate their ratings. They can first build

up a positive rating by buying or selling low value items like e-books or recipes, and then later engage in fraudulent activity. To address this issue, eBay now only allows digitally-delivered items to be listed in classifieds, where feedback is not involved. Additionally, sellers may attempt to boost their feedback by purchasing their own items using fake accounts and leaving positive feedback for their main selling account.

The purpose of favoring fixed-price listings over auctions is to enhance eBay's competitiveness against Amazon.com and other major online retailers. While auctions still account for approximately half of eBay's transactions, many buyers show a preference for the fixed-price format. This preference is evident since buyers are more inclined to bid up the price when there is less competition. eBay has traditionally been associated with online auctions, but this strategic shift aims to enable eBay to better compete with larger online retailers.

Scarcity often leads to higher market value, but many individuals are not inclined to bid on items that are readily available. Why take the risk of losing an auction when you can easily buy the item for a fixed price elsewhere? eBay has transformed into an online intermediary that traditional brick and mortar businesses cannot compete with. However, utilizing the internet has also presented some obstacles, particularly concerning trust between buyers and sellers. Nevertheless, eBay seems to have effectively addressed these trust issues, evidenced by the continued usage of their service by users.

Although still in its buildup period, eBay is operationally sound and has a business model that scales well. The management responds quickly and effectively, and is dedicated to expanding the business while safeguarding its core. While

some may consider eBay's stock overvalued, the business fundamentals remain strong. The only potential risk lies in eBay not achieving its estimated growth rate.