Hey everyone this week we are talking about online auctions, looking at how they operate, and how they can be profitable
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?
Ebay is the pioneer in person-to-person online
trading business model.
Founded in 1995 by Pierre Omidyar, the company now provides
millions of auctions, and hundreds of thousands of new items every day
from which bidders may choose.
Ebay as a 'pure-play' business, means that the market sets the price (above some
minimum). Auction-based pricing is sometimes referred to as "dynamic"
or "fluid" pricing, where on the other end of the spectrum there is 'set' or 'static' pricing mechanisms.
Finding the right balance can take
time, and indeed, one can continue to miss the mark as the market shifts
and competition evolves.
With an auction, there is no guess work, this is why eBay is successful they don't have to set prices, that's up to the sellers to do, therefore they never miss the market because of price.
Everything you need to know about protecting yourself while buying and/or selling on ebay
One of the largest frauds that customers are susceptible to on eBay, are private auctions.
Sellers who make private auctions under anonymous names tend to be scams, and therefore should be avoided.
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?
Karp (2009) states that eBay is a community of buyers and sellers, a complex social system of which users are active members.
In order to be successful on eBay , you need not only the technical skills of buying and selling, but also be effective in communicating to other ebay members, and contribute to the eBay community in a positive way.
What do eBay gain? A network of empowered buyers and sellers, its a community where if 'you scratch my back I will scratch yours'.
Feedback comments on eBay is a system that shows customer responses to a seller that they made a transaction with.
These comments can be positive, negative or neutral and add to the status and credibility of a seller.
If you network with other sellers and leave positive feedback on transactions you have made with them, then they will be encouraged to give you positive feedback and recommend you to others.
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?
In the book "the ebay billionaires club" (pg.47) Yaskulka a business owner, explains in an interview why ebay was his preffered option, its a "combination of having access to a large audience of customers without needing to scale any of your operations."
This next question is the lecturer of this subject talking, not myself
Q6. "I have a few businesses, and I have used eBay for about 12 years on
and off. Currently I have about 600 books listed on eBay (seller name
ozrural). I stopped selling on eBay for a few years but they changed the
rules this July and it is viable again (for me)". "What do you think
Honestly how is anyone suppose to know why it is now feasible for him, perhaps they no longer have usage fees like they did, some websites make you pay if you want to add more photos, or maybe they made keeping track of your transactions easier than before, with their updated account interface.
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