1. Ownership of the E-Marketplace: ^- eBay was founded in 1995, and became a notable success story of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries. The company manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. In addition to its auction-style selling’s, the website has since expanded to include “Buy It Now” standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading online money transfers (via PayPal)[6] and other services. In 2007, eBay began using detailed seller ratings with four different categories. When leaving feedback, buyers are asked to rate the seller in each of these categories with a score of one to five stars, with five being the highest rating and one the lowest. Unlike the overall feedback rating, these ratings are anonymous; neither sellers nor other users learn how individual buyers rated the seller. The listings of sellers with a rating of 4.3 or below in any of the four rating categories appear lower in search results. Power Sellers are required to have scores in each category above 4.5. In a reversal of roles, on January 24, 2010 Auction bytes .com held an open survey in which sellers could effectively rate eBay itself, as well as competing auction and marketplace sites. In the survey, users were asked to rank 15 sites based on five criteria:The Profitability, Customer service, Communication, Ease of use and Recommendation. After the results were published, eBay had finished 13th overall, edged out by established sites such as Amazon and Craigslist, as well as lesser-known selling sites like Atomic Mall and Ruby. In individual category rankings, eBay was rated the worst of all the 15 sites on Customer Service and Communication, and average on Ease of Use. A number of respondents said they would have given eBay a rating of ten 3 to 5 years ago. EBay was rated twelfth out of fifteen in the Recommended Selling Venue category.
2. Cost : ^- eBay generates revenue from various fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells (Final Value Fee), plus several optional adornment fees, all based on various factors and scales. As of November 2012, the U.S. based eBay.com takes $0.10 to $2 (based on the opening or reserve price) as an insertion fee for a basic auction-style listing without any adornments, and 9% of the total amount of the sale (price of the item plus shipping charges) as a final value fee. Fixed-price listings have an insertion fee of $0.50, and the final value fee varies based on category and total amount of the sale (e.g. 13% for DVDs & Movies up to $50).] The UK based ebay.co.uk takes from GBP £0.15 to a maximum rate of GBP £3 per £100 for an ordinary listing and from 0.75 percent to 10% (writing as of June 2009) of the final price. Reduced Final Value Fees are available to business registered customers, though this reduction is nowhere near the level of reduction that EBay seems to enjoy with regard to its own UK tax bill. In addition, eBay owns the PayPal payment system that has fees of its own.
3. Ease of Use / Support :^ – As eBay is a huge, publicly visible market, it has created a great deal of interest from economists, who have used it to analyze many aspects of buying and selling behavior, auction formats, etc., and compare these with previous theoretical and empirical findings. Just as economists have shown interest in eBay’s operations, computer information systems researchers have also shown interest in eBay. Recently Michael Goul, Chairman of the Computer Information Systems department of the W. P. Carey School of Business at Arizona State University, published an academic case based on eBay’s big data management and use. In the case, Goul discusses how eBay is a data-driven company which processes 50 petabytes of data a day. EBay uses a system that allows different departments in the company to check out data from their data mart into sandboxes for analysis. According to Goul, EBay has already experienced significant business successes through its data analytic To continue improving the business through data-driven decision making, eBay employs 5,000 data analysts.
4. Industry Fit :^ – On May 8, 2008, eBay announced the opening of its newest building on the company’s North Campus in San Jose, which is the first structure in the city to be built from the ground up to Edged standards. The building, the first the company had built in its 13-year existence, uses an array of 3,248 solar panels, spanning 60,000 square feet (5,600 m2), and providing 650 kilowatts of power to eBay’s campus. The array can supply 15%–18% of the company’s total energy requirements, reducing the amount of greenhouse gases that would be produced to create that energy by other means. Solar City, the company responsible for designing the array, estimates that the solar panels installed on eBay’s campus will prevent 37 million pounds of dioxide from being released into the environment as a result of replaced power production over the next three decades. Creating an equivalent impact to remove the same amount of carbon dioxide from the atmosphere would require planting 322 acres (1.30 km2) of trees. The design of the building also incorporates other elements to reduce its impact on the environment. The building is equipped with a lighting system that detects natural ambient light sources and automatically dims artificial lighting to save 39% of the power usually required to light an office building. EBay’s newest building also reduces demand on local water supplies by incorporating an Eco friendly irrigation system, and low-flow shower heads and faucets. Even during construction, more than 75% of the waste from construction was recycled. EBay also runs buses between San Francisco and the San Jose campus to reduce the number of commuting vehicles.
5. Marketplace Participation :^ – the Company’s current business strategy includes increasing international trade. EBay has already expanded to over two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New Zealand where Trade Me, owned by the Fair fax media group is the dominant online auction website. A more recent strategy involves the company increasingly leveraging the relationship between the eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal means not only does eBay turn buyers into clients (as a pure auction venue its clients used to be predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions. In its Q1 2008 results, total payment volume via PayPal increased 17 percent, but off the eBay auction site it was up 61 percent. For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as PayPal, Playmate, Pro Pay, and Money bonkers EBay runs an affiliate program under the name eBay Partner Network. EBay affiliate marketers were originally paid a percentage of the eBay seller’s transaction fees, with commissions ranging from 50% to 75% of the fees paid for an item purchased. In October 2009, eBay changed to an affiliate payout system that it calls Quality Click Pricing, in which affiliates are paid an amount determined by an undisclosed algorithm. The total earnings amount is then divided by the number of clicks the affiliate sent to eBay and is reported as Earnings per Click, or EPC.On April 18, 2012 eBay reported a 29% Q1 revenue increase to $3.3 billion compared to their Q1 in 2011. Net income was reported to be at $570 million for the quarter.] Under current U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making deals more attractive to buyers. Although some state laws require purchasers to pay sales tax to their own states on out-of-state purchases, it is not a common practice. However, most sellers that operate as a full-time business do follow state tax regulations on their eBay transactions. However Value Added Tax (VAT), a form of sales tax in EU countries, is different. eBay requires sellers to include the VAT element in their listing price and not as an add-on and thus eBay profits by collecting fees based on what governments tax for VAT; i.e. it not only receives fees as a percentage of the sale (net) price but also a similar percentage of the VAT element of the overall (gross) price.
6. Security / Privacy : ^ – eBay has its share of controversy, including cases of fraud, its policy of requiring sellers to use PayPal, and concerns over forgeries and intellectual property violations in auction items. There are also issues of how negative feedback after an auction can offset the benefits of using eBay as a trading platform. EBay has also been criticized for not paying its share of UK tax: the BBC reported in October 2012 that eBay pays only £1.2m in tax on sales of over £800m.
7. Other Services :^ – In the summer of 2004, eBay acknowledged that it had acquired 25% of classified listings website, Craigslist. Former Craigslist executive Phillip Knowlton was the seller, and he insisted that his former employer was aware of his plans to divest his holdings. Initially, eBay assured Craigslist that they would not ask the company to change the way it does business. EBay spokesman Hani Durzy stated that the “investment was really for learning purposes; it gives us access to learn how the classified market online works. In March 2005, eBay launched the classifieds service . In April 2008, eBay sued Craigslist to “safeguard its four-year financial investment”, claiming that in January 2008, Craigslist took actions that “unfairly diluted eBay’s economic interest by more than 10%. Craigslist counter sued in May 2008 “to remedy the substantial and ongoing harm to fair competition” that Craigslist claims is constituted by eBay’s actions as a Craigslist shareholder. In September 2010, Delaware Judge William Chandler ruled that the actions of Craigslist were unlawful, and that the actions taken by Craigslist founders Jim Buck master and Craig New mark had “breached their fiduciary duty of loyalty”, and restored eBay’s stake in the company to 28.4% from a diluted level of 24.85%. However, the judge dismissed eBay’s objection to a staggered board provision citing that Craigslist has the right to protect its own trade secrets.EBay spokesman Michael Jacobson stated “We are very pleased that the court gave eBay what it sought from the lawsuit.
8. Process Integration :^ – Using Mission Fish as an arbiter, eBay allows sellers to donate a portion of their auction proceeds to a charity of the seller’s choice. The program is called eBay Giving Works in the US, and eBay for Charity in the UK. EBay provides a partial refund of seller fees for items sold through charity auctions. As of March 4, 2010, $154 million has been raised for U.S. nonprofits by the eBay Community since eBay Giving Works began in 2003.Some high-profile charity auctions have been advertised on the eBay home page, and have raised large amounts of money in a short time. For example, a furniture manufacturer raises over $35,000 for Ronald McDonald House by auctioning off beds that had been signed by celebrities. To date the highest successful bid on a single item for charity was for the annual “Power Lunch with investor Warren Buffett at the famous Smith & Wollensky Steakhouse in New York. The winning bid was $2.63 million with all of the proceeds going to the Glide Foundation. At the time of writing, the winning bidder is still not publicly known, but they will be able to bring up to seven friends to the lunch.The previous highest successful bid on a single item for charity was for a letter sent to Mark P. Mays, CEO of Clear Channel (parent company of Premiere Radio Networks the production company that produces The Rush Limbaugh Show and Glenn Beck Program) by Senator Harry Reid and forty other Democratic senators, complaining about comments made by conservative talk show host Rush Limbaugh. The winning bid was $2,100,100, with 100 percent of the proceeds going to the Marine Corps-Law Enforcement Foundation, benefiting the education of children of men and women who have died serving in the armed forces. The winning bid was matched by Limbaugh in his largest charity donation to date.In 2007, eBay Canada partnered with Montreal-based digital branding agency Cloud Raker to develop a campaign to raise money for Sainte-Justine children’s hospital in Montreal. They aligned themselves with internet phenomenon. Têtes à claques to create an eBay auction based on popular T-A-C character Uncle Tom, an infomercial host who pitches absurd products. EBay and Cloud Raker reproduced Uncle Tom’s imaginary products, The Body Toner Fly Swatter, The Willis Waller Potato Peeler, and the LCD Shovel and sold them online. In 6 weeks, they raised $15,000 for Hospital St-Justine with one fly swatter, one potato peeler, and one shovel, a world record. The Body Toner Fly Swatter sold for $8,600, the Willi Waller Potato Peeler sold for $3,550, and the LCD Shovel sold for $2,146.21.
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