A Project Report on Business)
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A Project report on 201 Ebay 0 Submitted to: Miss Sumitha
A Project report on Ebay
Submitted by:
May 5
2010
Santhosh Kumar GK E-Business Management Reg no. CC0058BK42AG23AA 4TH TRIMESTER GEMS B-SCHOOL BANGALORE
GEMS B-SCHOOL BANGALORE
A PROJECT REPORT ON E-BAY
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Company profile
Name: Pierre Omidyar Title: Founder and Chairman
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A PROJECT REPORT ON E-BAY eBay responsibilities: Oversees strategic direction and growth, model and site development, and community advocacy
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Name: Meg Whitman Title: President and CEO eBay responsibilities: Build a successful business while delivering on customer needs and expectations Education: M.B.A., Harvard Business School. B.A., Economics, Princeton University
Company profile Foundation : September 1995 Location : San Hose , Ca USA Registered Users : 29.7 M ( Nov 2001) Employee : 1,927 (June 2001 ) History
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Sep 1995 : eBay was founded in Pierre Omidyar’s San Jose living Room Feb 1998 : Meg Whitman became CEO Sep 1998 : Nasdaq ( $ 18 per Stock ) Dec 1998 : 2.2M users , 33.7M Total items Dec 1999 : 10.0M users, 129.6 M total items Dec 2000 : 22.0M users, 265M items Nov 2001 : 29.7M users 17 Global Sites (Including Korea, Japan, France ,German)
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Introduction
What is eBay?
An introduction to the World's Online Marketplace
A place to buy:
EBay is a place to buy. Get nearly anything you need or want at prices better than you can find in traditional brick-and-mortar or even online stores A place to sell: 4 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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You can sell any thing by eBay. Anything you list on eBay will sell if you're flexible enough about the price. EBay’s global reach can even move unusual items that aren't in demand in your own neighborhood, turning paperweights into cash. A place to shop: Because of the immense variety of things that can be found for sale on eBay, many members have discovered that eBay is one of the best places in the world to window or comparison shop. Items listing often include photos, detailed descriptions, and owner experiences. Because you can see lots of the same item side-by-side in various conditions and know what each one sold or is selling for, eBay gives you insight into the real market value or "street value" of most types of goods around the world. A place to collect: EBay is the world's largest marketplace for rare, discontinued, collectible, or hard-tofind items, no matter what the type or price. Whether you're looking for turn-of-thecentury box cameras, hand-made Victorian doilies, Soviet army service medals, or 1980s vintage arcade games, eBay will give you a better selection than just about anyone else anywhere A website: There is no physical eBay store operated from several cities, eBay's service exists entirely online, and all aspects of business other than the delivery of bought and sold items themselves are typically handled through the eBay website. Free for buyers and inexpensive for sellers: It costs nothing to become an eBay member, to shop for goods, or to purchase goods from eBay sellers. Sellers pay a minimal amount to list items for sale, and another small percentage of the value when an item is sold. There are no monthly fees or other hidden costs. Green: EBay is has proven to be a boon to the environment. Millions of tons of goods that would otherwise go into landfills or more resource-intensive recycling programs instead find new homes every year thanks to eBay. Some of these goods include consumer electronics items like computer parts and mobile phones that release toxic substances once they're discarded and exposed to the environment.
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Socially responsible: Because eBay eliminates middlemen and lowers barriers to buying and selling, potters in rural Mexico and bead weavers in central Asia can sell hand-made goods directly and inexpensively to a massive global audience. This brings new economic opportunities to developing areas and increases cultural understanding between 5 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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populations. EBay has become one of the world's most interesting and exciting transnational ambassadors. Like the real world in many ways: Just as you'll encounter both honest and dishonest people in the real world, you'll find both honest people and crooks on eBay. Thankfully, eBay's site includes a selection of tools like the feedback system that are designed to help you to remain safe as an eBay member. In short, since eBay's founding in 1995 it has become the world's largest place to buy and sell, a community of hundreds of millions of regular people, small businesses, and even big businesses from all of the seven continents. Millions of items of every kind imaginable, in every condition imaginable, change hands every day on eBay for prices ranging from one cent to hundreds of thousands or even millions of dollars (or pounds, or other forms of currency).
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Mission statement:
“To provide a global trading platform where practically anyone can trade practically anything”
History
Learn how eBay began as a small business in someone's living room and grew into one of the top earning Websites on the Internet
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The company began in the home of Pierre Omidyar is 1995 and is now a leader in Internet revenue. This company began as something like an online garage sale in 1995 and has enjoyed steady growth over the years. Items on eBay are listed by categories and anyone with an eBay account can bid on the item of their choice. You can find just about anything you can possibly imagine on eBay, including cars, real estate, collectibles, concert tickets, CDs, clothing , DVDs, and artwork. Rare items can sell at very high prices. Things such as Elvis Presley's ashtray or rare baseball trading cards go for top dollar. When you list an item for auction on eBay it can be seen by millions of people all over the world. Mr. Omidyar started eBay from his home in 1995. The first name eBay used was Echo Bay Technology. When the company tried to register the domain name echobay.com, they found that it was already in use. They shortened the name to eBay.com and the Website was born. Jeff Skoll was the co-founder of this company and Harvard Business School graduate Meg Whitman joined them in 1998. The early emphasis on eBay was the customer. The very nature of online auctions required that strangers trust each other. Along with growth as a site for buying and selling, eBay worked hard to make their Website a community. In September of 1998 eBay has its initial public stock offering. Then in April of1999, the company bought the auction house Butterfield and Butterfield for an astounding price of 260 million dollars. In June of 1999 eBay.com went down for almost twenty-four hours. The company's 400 employees took the time to personally call the individual sellers who were affected by this crash and apologize for the downtime and the inconvenience it posed to them. This made eBay a hit with the many users who frequented the site and gave the company a very favorable outlook. The company had some interesting auctions happen that include a human kidney that was put up for auction in August of 1999. The bids for this auction soared to over five million dollars before eBay intervened and pull the listing. Then in July of 2000, a rare baseball card sold for 1.2 million dollars. This was the highest paying auction in eBay's history up until that point. December of 2000 saw eBay beginning to self-monitor sales for copyrighted materials. In February of 2001 an item even stranger than the kidney was put up for public auction. A man from Seattle sold his "soul" for 400 dollars before eBay could intervene and stop the auction. In May of 2001 eBay decided to ban the sale of any item related to crime including letters from murders, crime scene memorabilia, and seats to view executions. Though the first things sold on eBay were collectibles and home items, the company branched out to higher profile sellers like Disney and GM. These companies sell items in the same manner as the individual sellers. The eBay community was resistant to these changes at first but soon grew accustomed to the presence of big business hosting auctions.
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The Website Half.com was bought by eBay in 2000 and fully integrated into eBay's web community in 2001. Half.com allows users to buy and sell items at lower rates much like eBay but without the auction feature. In October of 2002 eBay acquired Pay pal Inc. for 1.5 billion dollars. Papal is the preferred way of making payments for eBay auctions and is growing in popularity for other Internet uses. Papal allows a person to send or receive money via an email address. Money in a Pay pal account can be spent on the Internet, sent by check to the account owner, or deposited into a bank account. Paypal also offers credit cards, debit cards, and a bill paying function. The future of eBay looks bright. They enjoy continued growth through their many companies and ventures. By the year 2004 eBay had earned 3.3 billion dollars in revenue. Over 135 million people worldwide use eBay. The company hopes to further expand operations worldwide and possibly incorporate audio and video into the auction pages. This company takes pride in understanding what the customer wants to happen with their company. The "Voice of the Customer" was born in 1999. This venture brings up to a dozen loyal customers together with the company to discuss what is and what is not working on eBay. With this kind of interaction with customers and attention to detail, eBay should be around for a long time to come.
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Marketing MIX
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Products
1. antiques 2. art 3. baby 4. books 5. business& industrial 6. cameras & photos 7. cell phones $ PDA 8. clothing shoes and necessaries 9. coin & paper money 10. collectibles 11. computers & networking 12. consumers electronics 13. crafts 14. dolls & bears 15. DVD & Movies 16. eBay motors 17. entertainment memorabilia 18. gift certificates 19. health & beauty 20. home & gardens 21. jewelry & watches 22. music 23. musical instruments 24. pottery & glass 25. real estate 26. specialty services 27. sporting goods 28. sports Mem, cards & fan shop 29. stamps 30. tickets 31. toys & hobbies 32. travel 33. video games 34. every thing else
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Price
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When you think about selling on e-Bay, one of the last things that usually come to mind is pricing strategies. After all, e-Bay is an auction site. You list your item and wait for competitive bidding to drive the price up. Unfortunately, it’s not that simple. Pricing the items you sell on e-Bay is an important part of the selling process, even on eBay. Many sellers don’t give pricing too much consideration and their auctions usually show it. People are looking for bargains, especially on e-Bay. They will bid only on items where they see a value for the price they are willing to pay. Naturally sellers are concerned about getting a fair price, too. Often, they have money invested in the item they are trying to sell. They can’t go below a certain price or they risk losing money. So, how do pricing strategies work on e-Bay? There are essentially three types of pricing you need to be concerned with:
• • •
Starting bid Reserve price Buy-It-Now price
Each of these methods has important factors to consider Starting Bid. Even though each of these can be included in every auction, e-Bay only requires you to set a starting bid. The other two are optional.You should pay particular attention to the starting bid as this will be an important factor for a buyer. Many auctions don’t get any bids just because the starting bid price is too high.Sellers are worried that they will lose money on their items if they start the bidding too low. The wrongly believe that they won’t have enough bids to drive the price to the point where they will make a profit on the sale.What these sellers fail to understand is that auctions – online or offline – are true indicators of the value of a particular item. People are willing to pay only what they believe the item is worth. It doesn’t matter to them what a catalog or a price guide says the item is worth. There are millions of registered e-Bay users. The chances that an item will close without competitive bidding are pretty slim. That is, of course, if you have an item that people want. If you are trying to sell garbage, then all bets are off. One of the best ways to let the market decide the value of an item is to set a low starting bid once competitive bidding starts, the true price of the item will become clear. The bottom line is that a lower starting price will lead to early and active bidding. Never set your opening price more than $50.00, no matter how much the item is worth. This is a price point that people have difficulty crossing. 11 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Reserve Price There are times when you absolutely cannot sell an item for less than a certain price. If you use a low starting bid, you need a way to guarantee you will reach that minimum price before you have to sell the item. This is where reserve prices come in. A reserve price is hidden from buyers and is simply the lowest price you are willing to take. If the bidding fails to reach the reserve price you are not required to complete the sale. Of course, you can sell it at the final bid price if you want, but you are not required to complete the transaction. Once the bidding reaches the reserve price, then you are obligate to sell the item when the bidding closes. A low starting bid with a reasonable reserve price is a good strategy for many items. It encourages bidding but guarantees that you’ll get your money out of the transaction. The downside is that many buyers don’t like reserve price auctions. They quickly become frustrated when they repeatedly bid only to learn that “the reserve price hasn’t been met.” After a few encounters like this, they’ll give up and move on. A reserve price can be a hedge against losing money on the sale, but one thing to keep in mind is that a seller can close an auction at any time for any reason without any negative effects. While I wouldn’t use this as a strategy for every auction, it may save you if the bidding isn’t quite what you expected for an item. Buy It Now Price: One of the cool features of many e-bay auctions is a “Buy It Now” button. This allows the buyer to purchase a desirable item and stop the bidding process. Many buyers don’t want to bid and wait a week only to find they are outbid at the last moment. The “buy it now” option appeals to this type of buyer. For the seller, it means getting a sale at an attractive price. Sometimes sellers are willing to pay a little more to guarantee they will get the item rather than wait for the outcome of an auction. The “buy it now” option can be used for any type of item. It is particularly effective when you are offering multiple identical items at any given time. Set your price somewhere around your reserve price.
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Other Pricing Strategies:
One of the additional factors that usually contributes to bidding and the final price is shipping costs. Buyers look carefully at shipping and handling costs and factor them into their bid. You will encourage active bidding if you offer free shipping. Bidders will perceive extra value in your item and they know there are no additional costs other than their bid price. More often than not, offering free shipping will more than pay for the cost of shipping the item. If you use this strategy in your auctions, make sure you advertise it in the listing. Let people know about it. Consider mentioning it in the title of the auction if you have room. 12 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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How to Set the Price
Before you can list your item, you need to have an idea of what your item may be worth. In some cases this is not relevant. If you buy wholesale to sell on e-Bay, you may only need to know what it costs you to obtain and list your merchandise. Your prices will reflect those costs. If you are selling one-of-a-kind items or collectibles, you will want to have a good idea of the value. Check your local library or book store for pricing guides. These may give you a good idea of what your item may be worth (as well as provide you with important information to include in your listing.) Be careful, however, because some fields use the catalog only as a guideline. In stamp collecting, for example, it’s commonly known that certain stamps sell for much more or much less than the catalog price. You can check for similar items on e-Bay. By checking completed auctions, you can get a reasonable idea of what people are willing to pay.
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How to Sell On EBay: Pricing
Strategy
Many new EBay sellers make one of two mistakes: either they overprice items to an untellable extreme; or they lose money on every transaction by setting low starting prices with no restrictions. There are three strategies, Strategy #1 if you are listing a popular item that you are confident will sell for a high price; one strategy you can use is the ten-day, one cent starting price, no reserve auction. This is the best way to start a bidding war: pull in bidders early with a low starting price and no reserve and give those ten days and two weekends to battle it out. Depending on the profit-margin of the item and the quality and number of your competitors, you may want to consider using listing upgrades, such as bold, highlight, and feature listing options to ensure your auction sticks out of the crowd. This strategy is not for recommend for beginners. This is extremely high risk if you do not know how to take the risk out of it. Strategy #2 now, if you are new to EBay or want to list an item with undetermined popularity, you can use a safer, but potentially as profitable bidding strategy for ten-day auctions. You still won’t use a reserve with this strategy. But instead of setting the start price low to encourage bidding war, you are going to set your start price to your ideal selling price - and then couple it with a buy it now price that is slightly higher. This will put pressure on the buyer to buy it now instead of watching. If she waits, she gains absolutely nothing--and she risks someone else bidding (and ruining the low BIN price) or just snatching it with the BIN option. In addition, knowing that she will lose nothing anyway, she will realize that she can get the item up to ten days sooner if she uses the BIN option to order it then, rather than waiting for the auction clock to tick down. The strategy described above is very safe. It is use it for the majority of my auctions and always get positive results. At worst, it will take 3-4 weeks to sell an item. Strategy #3 Another effective way to use a ten-day setting is in conjunction with ditch auctions--or auctions that sell a number of the same item. Ten-day auctions will give you the longest amount of time to move the highest amount of products. You may also want 13 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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to feature ten-day Dutch auctions, depending on what items you are selling. If you’ reselling information products and rely on the quantity of sales for profit, this wont be effective; but if you’re selling a number of expensive, high profit-margin items, featuring your auction is probably a good idea. If none of these strategies works for you, you should consider the following two things: 1) the price other EBay businesses sell your product for. If someone else IS selling your product, there is a reason for it - and it’s probably the price. If you cannot afford to sell at reasonable price, you need to find a new source to Buy from. And if your product’s price is reasonable, then 2) you need to redesign your auction and find new ways of pulling in targeted traffic.
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Place
EBay is an online market of buying and selling. It provides services to buy and sell through internet. Customers have not to go to the market by self. EBay provides its services in Europe America, Korea and in china. When a customer purchase any thing from eBay, eBay is connected with all banks customer pays the amount by the credit card or can by checque. EBay use royal mail services to send the product to the buyer. Through royal mail service the customer can get its product which he or she bought.
Promotion
EBay is now the most famous website basically it needs not to be promoted. But for promotions eBay advertised itself by different websites like on Google and it also send its information’s to its account holders on their account. EBay has a separate box on 14 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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its website for feedback from its customers. To promote itself eBay analysis its customers view about it. In this way eBay promote itself.
Major services and features
BallPoint : eBay's preferred online bill payment service that facilitates credit card payment between buyers and sellers. eBay International Users on eBay represent countries all over the world. With eBay's vision and global business strategy, the company continues to expand its service and brand abroad. Buy It Now Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction eBay Professional Services. Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals eBay Local Trading. eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest eBay Premier. eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world eBay Live Auctions. Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses
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.
Environment
Suppliers
Suppliers from whole sellers to drop shippers:
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There are many suppliers that help supply items to eBay business. Simply sell the item and the drop shipper sends the item to the customer. All the persons and the companies that place their products on eBay with pictures are the suppliers of eBay.
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Marketing intermediaries
Because eBay eliminates middlemen and lowers barriers to buying and selling, there are no physical intermediaries on eBay. Actually eBay is connected with pay pal. Pay pal is a web site which is connected with eBay it receives price from the customers and sends it to the eBay inc. and receives product from eBay and handover it to the customers.
Competitors
EBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers. • • • • • AOL Amazon Buy.com Autobytel.com yahoo
These are the few examples of eBay’s competitors. Here we compare ebay with yahoo auctions.
Yahoo vs. ebay for sellers ebay
Maximum duration ending time Fee chances of buy & sell 10 Days eBay auctions end at the time the auction was created based on the starting or reserve price of an item each time an item is listed More likely 14 Days Yahoo allows you to set the ending time within a one-hour range. not charge any fees for listing auction items to the buyer or seller Less likely
yahoo
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When a new item is posted
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a page for the item gets created immediately, but it can take several hours before the item gets added to the list of items and is searchable nothing to stop bidders from waiting until the last seconds of an auction to make a bid.
A page for the item is created immediately. The item is also added to the list of items and is searchable immediately it is automatically extended by A bid is made within the last 5 mins of an auction, five minutes
Sniping
Restart Response
Cannot be automatically restart Not respond as quickly as Yahoo. (browsing, searching, etc)
Can automatically be restart Better performance than eBay
Restriction counter
More restrictions to use another site to place a Counter on your auction item page
Few restrictions able to count without placing counter on your auction page
EBay vs. yahoo for buyers
ebay
Items Over 6 times more items
yahoo
A lot fewer items No Not have as wide or deep of a selection Titles or titles & description Can limit within a category
Changing for yes posting Unusual More likely to find thing Search Can limit within a category Titles or titles & description
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Browse items By title or by picture (if designated as part By title or by picture of the gallery ) Insurance Automatic insurance for sales Not offer insurance
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Space picture
for Not provide space for pictures: You must Provides free space for place your picture files On some other site auction item Pictures, so more items have pictures For you to see Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001
EBAY,
A COMPANY ANALYSIS
EBay S.W.O.T Analysis
EBay’s Strengths
EBay is the leading provider of online auction and customer-to-customer trading in the world. They have many competencies, core competencies, and distinctive competencies that set them apart from their competitors. Their alliances, international dominance, and recognizable brand, name just to name a few, are some of the main reasons why eBay is a company that is hard to top. Largest Online Auction Forum(core competence) From its beginning in the mid-1990s, eBay has been growing in leaps and bounds. They now have over 94.9 million registered users in more then 150 different countries. eBay’s founder Pierre Omidyar did not even see the tremendous possibilities that eBay had when it was first developed over ten years ago. eBay now holds the top spot in the online auction industry. In the United States alone one-third of the population is already registered with the site and with increasing use of the internet that number is sure to grow. Recognizable Brand Name(core competence) A recognizable brand name is important to the success of a company. eBay has made sure to use color and unique writing to show their brand name off. They also use television and Internet advertising to get continued publicity on different media avenues. Amazon.com does not have as much face value as eBay. Their name is not distinctive to the customers like eBay’s. Over 250 Alliances (competence) eBay holds alliances with some of the largest companies in the world. They include UPS, America Online, IBM, PayPal, and Walt Disney. These alliances create more opportunities for eBay to advertise and reach potential customers. eBay has 18 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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also created alliances with companies that help to maintain customer satisfaction. Tradesafe and I-Escrow have both partnered with eBay to make sure that all customers get what the pay for. Global Reach (core competence) The global reach that eBay has obtained is not matched by any other online auction site. Although Amazon.com is in a close second to eBay, customers obviously prefer eBay’s global ability. They have the capability to reach people in virtually any part of the world and get them the product they are looking for. Entertaining Site (competence) eBay has created a site that makes people want to come back again and again. They are constantly revamping their site to make sure that it is the easiest, fastest, and most fun auction site on the web. Over 27,000 Different Categories (distinctive competence) The wide variety of products offered on eBay gives them a competitive advantage above all other online auction sites. They are like the Wal-Mart of the Internet! They say that anything you want you can find on eBay. .
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EBay’s Weaknesses
Like any company, eBay has weaknesses. They are not able to do everything to the best of their abilities. A lack in ability to monitor all illegal activity as well as failure in some foreign markets is two weaknesses of eBay. Inability to Measure Illegal Activity on Site eBay has taken many precautions to prevent illegal activity on their site. They estimate that only 1 percent of transactions on their site involve fraud. The customers however disagree to some extent. Some say that there are as much as 10 percent fraudulent transactions. EBay has no real way to measure the extent of illegality on their site. • Inability to Penetrate Some Foreign Markets Penetration in foreign markets is crucial to the success of online auctions. EBay has done an outstanding job of penetration in foreign markets. However, they have been unable to take over one of the most crucial foreign markets, Japan. Japan is one foreign market that is on the rise. They are becoming more prosperous and use of the internet is growing. If eBay is not able to gain ground in this market it could hurt its foreign market standing. Lack of In-Depth Descriptions for Products Amazon.com boasts in-depth product descriptions for all merchandise sold on their site. This is not one of eBay’s outstanding features. The lack of description in products could be a factor in the amount of counterfeit and wrongly identified products that are sold to customers. 19 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Technology Malfunctions Technology malfunctions are always going to be a factor when dealing with websites and online shopping. eBay must take measures to keep malfunctions as low as possible to retain happy customers and to keep hackers out of personal PayPay and eBay accounts.
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EBay’s Opportunities
EBay can continue to seek alliances, partnerships, and new customers to continue its reign as number one. Changing Lifestyles of People People are using the internet more and more to pay bills, talk to family, and shop. eBay can use this opportunity for continued market penetration and expansion. Acquisition of Shop Yahoo.com Yahoo.com’s shopping site is very weak in the online auction industry. eBay should explore the possibility of acquiring their shopping site, along with its members and alliances already formed to broaden their customer base. EBay already has partnerships with Yahoo.com in other areas so this acquisition would benefit both parties. Continued International Expansion As internet use continues to grow throughout the world eBay must take every opportunity to enter desirable international markets. With the amount of internet users already registered on eBay in the United States continued international expansion is critical. Increasing Use of the Internet The internet is being used more and more each day. eBay can take this opportunity to expand and penetrate new markets.
EBay’s Threats
There might also be the potential of turning some threats into opportunities. Thieves There will always be the threat of fraud and illegal actions in online shopping. No matter how many precautions eBay takes computer hackers and thieves will find new ways to trick honest shoppers. eBay has taken precautions to prevent these illegal actions and they must stay on their toes to make sure they do all they can to prevent illegal activity on their site.
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Increasing Number of Online Trading Sites When an industry is attractive new competitors will always try to enter and steal some of the market share. eBay already has many competitors surrounding them including Amazon.com, uBid, and ePier. Some boast that they are an alternative to eBay while others just try to be better than eBay. To sustain a competitive advantage above their competitors eBay must continue to grow and advance in the online auction industry. Strategies must be determined and defenses formed. Rapid Growth of Amazon.com Amazon.com has continued to grow since it was formed in the mid90s. They the largest competitor of eBay and may have the potential to take over the largest market share in the online auction industry. Increasing Number of Online Stores Online shopping is becoming more and more common. Stores such as Target and JC Penny have developed sites where people can shop from the comfort of their own home. This poses a large threat to eBay. They are now not only competing with other online auction sites but also online retailers. Despite these challenges, prospects for eBay in the future look bright, as eBay growth continues to be strong and eBay's recent acquisitions continue to pick up financial steam and Internet traffic as well.
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YAHOO, COMPANY ANALYSIS
Strengths:
• large adverting accounts Yahoo’s Overture is a tremendously profitable Internet advertising business. It focuses on affiliate advertising for large adverting accounts, in the same way as Google's Adsense programme. This is an important income stream for Yahoo!. • The most popular website Yahoo! has over 350 million users of its services and solutions. This makes it a very powerful marketing company, with a very well known brand. Some reports indicate that is it is the most popular website in the World. international business presence
•
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A key long-term strength is Yahoo’s international business presence. As the Internet expands and it is adopted by more nations the opportunities for Internet brands begin to emerge. Yahoo! is well placed to take advantage of these opportunities with its strategic business units in Asia, Europe and Australia.
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•
source of structured information The Yahoo! Directory is an original source of structured information. It has built over the last decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted before their inclusion).
Weaknesses:
• Differentiation Differentiation is difficult for Yahoo!. Almost all of its packaged services are available from other sources. 1. Search facilities are available on MSN and Google. 2. Free E-mail accounts are available from Hotmail (MSN) or GMail (Google), and many, many others. 3. New is available from CNN or the BBC. 4. Shopping is available everywhere on the Internet. • Uncertain future Online advertising is a new income stream for organizations such as MSN, Yahoo! and Goggle. Yes, today they are very, very profitable. However, as technology develops and new unforeseen advertising media emerge, the future is uncertain for these income streams. This is a weakness for Yahoo! and its competitors. Another income stream that has been key to Yahoo! is derived from its partnerships with telecommunication providers. For example, you buy an Internet connection package from your local telephone company, and it includes a feebased Yahoo! package including e-mail accounts, user support and other added value services. If ever this channel is changed or removed, the income stream would be affected.
Opportunities:
• international market The international market is a huge opportunity for Yahoo!. Yahoo!, Microsoft and Google are busy carving niches and taking over businesses in are around the Greater China Region. China has over 1,200,000,000 citizens. Other economies, such as India, also offer tremendous growth potential. • Yahoo! Directory The Development of the Yahoo! Directory has potential for new business and income streams. Two thirds of organizations in Ohmae's Triad (Europe,
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Japan and the USA) are Small Medium Enterprises (SME'). SME's are potential directory advertisers. Mobile technologies Mobile technologies offer another opportunity for Yahoo!. Today we access the Internet using personal computers. Tomorrow phones, televisions, personal organisers, music players and computers will merge and morph. The mobile devices of the future will need services and solutions. Yahoo! would be well placed to provide many of them.
•
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Threats:
• competitors The biggest threat for all web-based organization is competition. Huge profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone away, it is now more focused on profit delivery. All of Yahoo!'s key services have competitors such as AOL, Google and many others. • culture specific competitors International, culture specific competitors could affect Yahoo! in the future, unless strategic alliances are forged. China has developed its own search engines, as has India. Why should the World use USA based companies such as Yahoo!? There needs to be a series of substantial competitive advantages to see the business remain as an international brand. Look at what has been learned from the global car industry, or electronics industry.
Technological factor:
Now days every thing has affected by the technology. So eBay has also some effects of technology. Now a day’s eBay uses “beta” version the version of eBay is updated by the Microsoft corporation when Microsoft make changes its internet explorer then eBay version also changed by the Microsoft. Functions of latest version; It works automatically means when any customer wants to find out any thing the beta version asks about your home address or location when you tell him. Then beta version asks you to about the area boundary in which you want to buy the thing. Example; EBay in an auction place every one can buy or sell through it. For example if you want to buy nokia N95 and you tell to beta version that you want it with in 40 km around to your house. Beta version searches it within 40km of your house and tell you that is it available with in the distance or not. 23 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Political factor:
EBay is not affected by any political factor it is free online market place from political environment. No new laws and any pressure group can affect eBay. Basically eBay works under the govt. and there are some rules and regulations of Europe and American govt. that’s why political environment can not make changes by pressure on eBay.
May. 5
Direct marketing channel:
EBay directly targeted to its customers there’s no intermediaries involve between customers and company. EBay inc. uses the direct distribution channel to forward the product to its customers. It sells directly to its customers. Same like Avon, Amway and Tupperware sell their products door to door or through home and office sales. EBay forward its product by royal mail in England. Royal mail provides three types of packages for transferring the product it depends on customer in how much time he want to receive his product. The very special time your product will be handover to you the very next day. The auction process on eBay is direct from sellers to eBay to buyers.
Auction process:
I. First the person who wants to sell his product from eBay he get registers himself with his product. II. In second step the buyers starting bidding on that product. III. Successful bid selected IV. Than banks are connected with eBay the buyer can pay by checkup or by credit card. V. After payment the bank notify to eBay to make sure that the payment has done. VI. EBay notify to the seller VII. The seller delivers the product to the buyer on his given address. VIII. Then the buyer sends notification to eBay for the recipient of the product. IX. EBay send this notification to the bank. X. Then bank send payment to the seller. These are the steps that are involved for auction process in eBay that the sellers and the buyers should have to follow.
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Banking
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it re d Pay ay /C 4. P ct i re d … ) D ay Car (EB
Seller
ai d tP Ge . 10
Buyer
9. Pass account
5. Notify
6. N pa otify ym en t 1. R eg i ste r
ery eliv n 8. D ficatio i . Not 2 ing idd sful B s cce . Su id 3 B
7. Delivery 4. Pay ( Check / Money order)
EBay Today:
Anyone who has invested in eBay stock over the last few years probably knows that eBay's position in the Internet marketplace is rapidly changing. In recent quarters, however, things have slowed down a little. Quarterly year over year growth is now at just over 30 percent and shows a downward trend—still excellent, but not quite as stratospheric. Some of this is due to increasing competition from eBay competitors, including Google (worldwide but especially in North America and Europe) and a number of alternative auction houses across Asia and the Pacific Rim. In some circles, people are talking as if the slowing of growth and the maturing of eBay as a company and stock mark end times for the company. Not so. In recent years eBay CEO Meg Whitman's strategy has been to continue to strengthen eBay's core auction business while at the same time to diversify eBay's business model and holdings as a hedge against competition in the online auctions and ecommerce market. This strategic and markets growth has included a number of investments and acquisitions—big names that today are also eBay. You may have heard of some of them Skype—The wildly popular Skype VOIP (voice-over-internet-protocol) service is eBay's largest acquisition to date and one of its most recent, purchased in 2005 for approximately $2.6 billion. Whitman's vision for Skype is as a communications hub not just for Internet customers looking for alternatives to traditional telecom packages, but for eBay buyers and sellers, who will eventually 25 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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be able to interact securely and anonymously by voice. She also sees a future in which the forthcoming Skype subscription charges will be cleared primarily through PayPal.
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PayPal—By now, nearly everyone realizes that PayPal is now an eBay company, picked up for $1.5 billion in 2002 and a natural match: the vast majority of eBay transactions involving online payments at the time used PayPal, and this remains the state of affairs today. True to Whitman's vision, PayPal has also grown to become the premier payment system for ecommerce across the Internet, second only to direct credit card transactions and safer as well. An increasing number of entailers and even brick-and-mortar stores accept PayPal payments today. Craigslist—In 2004 eBay paid an undisclosed sum to acquire a 25 percent interest in Craigslist becoming its largest single shareholder. EBay has kept a low profile vis-a-vis it's ties to and influence on Craigslist, but with the classified service's growth going through the roof and the classified marketplace becoming more important online in general, investors should see this as a strong asset with big upside potential for eBay. Half.com—Half.com acquired by eBay in 2000, represents eBay's move into the online used media market. Half.com was a rising star in and in many ways the creator of this market which has now been joined by the likes of Amazon.com among others. Half.com remains a perennial favorite amongst students, bibliophiles, game enthusiasts, film buffs, and others in seeking to buy used media products at reduced cost. Because these types of products are commodity priced and often have a long shelf life before being purchased, the alternate sale model that Half.com represents is both appropriate to its market and does not compete directly with eBay's core auction offerings. Rent.com, Shopping.com, Prostores—While not as monumental in scale as the aforementioned transactions, eBay has also diversified its retail and real estate businesses with Rent.com Shopping.com and Postures which together complement eBay's existing eBay Motors eBay Real Estate among others, in retail beyond the commodity and consumer goods market. If together these acquisitions paint the picture of a company in the midst of steady and continued growth, they should—eBay remains the premier online auctions and retail space and is poised to continue along this trajectory for the foreseeable future. EBay’s major threat at the moment is Google also rapidly expanding and enjoying market-leading growth. EBay’s relationship to Google is a troubled one, as eBay relies on Google's advertising model and market reaches for its continued success even as Google continues to enter market niches in which eBay products already exist—for example, classified ads and online payments.
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A Project report on Ebay
Submitted by:
May 5
2010
Santhosh Kumar GK E-Business Management Reg no. CC0058BK42AG23AA 4TH TRIMESTER GEMS B-SCHOOL BANGALORE
GEMS B-SCHOOL BANGALORE
A PROJECT REPORT ON E-BAY
May. 5
Company profile
Name: Pierre Omidyar Title: Founder and Chairman
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A PROJECT REPORT ON E-BAY eBay responsibilities: Oversees strategic direction and growth, model and site development, and community advocacy
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Name: Meg Whitman Title: President and CEO eBay responsibilities: Build a successful business while delivering on customer needs and expectations Education: M.B.A., Harvard Business School. B.A., Economics, Princeton University
Company profile Foundation : September 1995 Location : San Hose , Ca USA Registered Users : 29.7 M ( Nov 2001) Employee : 1,927 (June 2001 ) History
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Sep 1995 : eBay was founded in Pierre Omidyar’s San Jose living Room Feb 1998 : Meg Whitman became CEO Sep 1998 : Nasdaq ( $ 18 per Stock ) Dec 1998 : 2.2M users , 33.7M Total items Dec 1999 : 10.0M users, 129.6 M total items Dec 2000 : 22.0M users, 265M items Nov 2001 : 29.7M users 17 Global Sites (Including Korea, Japan, France ,German)
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Introduction
What is eBay?
An introduction to the World's Online Marketplace
A place to buy:
EBay is a place to buy. Get nearly anything you need or want at prices better than you can find in traditional brick-and-mortar or even online stores A place to sell: 4 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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You can sell any thing by eBay. Anything you list on eBay will sell if you're flexible enough about the price. EBay’s global reach can even move unusual items that aren't in demand in your own neighborhood, turning paperweights into cash. A place to shop: Because of the immense variety of things that can be found for sale on eBay, many members have discovered that eBay is one of the best places in the world to window or comparison shop. Items listing often include photos, detailed descriptions, and owner experiences. Because you can see lots of the same item side-by-side in various conditions and know what each one sold or is selling for, eBay gives you insight into the real market value or "street value" of most types of goods around the world. A place to collect: EBay is the world's largest marketplace for rare, discontinued, collectible, or hard-tofind items, no matter what the type or price. Whether you're looking for turn-of-thecentury box cameras, hand-made Victorian doilies, Soviet army service medals, or 1980s vintage arcade games, eBay will give you a better selection than just about anyone else anywhere A website: There is no physical eBay store operated from several cities, eBay's service exists entirely online, and all aspects of business other than the delivery of bought and sold items themselves are typically handled through the eBay website. Free for buyers and inexpensive for sellers: It costs nothing to become an eBay member, to shop for goods, or to purchase goods from eBay sellers. Sellers pay a minimal amount to list items for sale, and another small percentage of the value when an item is sold. There are no monthly fees or other hidden costs. Green: EBay is has proven to be a boon to the environment. Millions of tons of goods that would otherwise go into landfills or more resource-intensive recycling programs instead find new homes every year thanks to eBay. Some of these goods include consumer electronics items like computer parts and mobile phones that release toxic substances once they're discarded and exposed to the environment.
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Socially responsible: Because eBay eliminates middlemen and lowers barriers to buying and selling, potters in rural Mexico and bead weavers in central Asia can sell hand-made goods directly and inexpensively to a massive global audience. This brings new economic opportunities to developing areas and increases cultural understanding between 5 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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populations. EBay has become one of the world's most interesting and exciting transnational ambassadors. Like the real world in many ways: Just as you'll encounter both honest and dishonest people in the real world, you'll find both honest people and crooks on eBay. Thankfully, eBay's site includes a selection of tools like the feedback system that are designed to help you to remain safe as an eBay member. In short, since eBay's founding in 1995 it has become the world's largest place to buy and sell, a community of hundreds of millions of regular people, small businesses, and even big businesses from all of the seven continents. Millions of items of every kind imaginable, in every condition imaginable, change hands every day on eBay for prices ranging from one cent to hundreds of thousands or even millions of dollars (or pounds, or other forms of currency).
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Mission statement:
“To provide a global trading platform where practically anyone can trade practically anything”
History
Learn how eBay began as a small business in someone's living room and grew into one of the top earning Websites on the Internet
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The company began in the home of Pierre Omidyar is 1995 and is now a leader in Internet revenue. This company began as something like an online garage sale in 1995 and has enjoyed steady growth over the years. Items on eBay are listed by categories and anyone with an eBay account can bid on the item of their choice. You can find just about anything you can possibly imagine on eBay, including cars, real estate, collectibles, concert tickets, CDs, clothing , DVDs, and artwork. Rare items can sell at very high prices. Things such as Elvis Presley's ashtray or rare baseball trading cards go for top dollar. When you list an item for auction on eBay it can be seen by millions of people all over the world. Mr. Omidyar started eBay from his home in 1995. The first name eBay used was Echo Bay Technology. When the company tried to register the domain name echobay.com, they found that it was already in use. They shortened the name to eBay.com and the Website was born. Jeff Skoll was the co-founder of this company and Harvard Business School graduate Meg Whitman joined them in 1998. The early emphasis on eBay was the customer. The very nature of online auctions required that strangers trust each other. Along with growth as a site for buying and selling, eBay worked hard to make their Website a community. In September of 1998 eBay has its initial public stock offering. Then in April of1999, the company bought the auction house Butterfield and Butterfield for an astounding price of 260 million dollars. In June of 1999 eBay.com went down for almost twenty-four hours. The company's 400 employees took the time to personally call the individual sellers who were affected by this crash and apologize for the downtime and the inconvenience it posed to them. This made eBay a hit with the many users who frequented the site and gave the company a very favorable outlook. The company had some interesting auctions happen that include a human kidney that was put up for auction in August of 1999. The bids for this auction soared to over five million dollars before eBay intervened and pull the listing. Then in July of 2000, a rare baseball card sold for 1.2 million dollars. This was the highest paying auction in eBay's history up until that point. December of 2000 saw eBay beginning to self-monitor sales for copyrighted materials. In February of 2001 an item even stranger than the kidney was put up for public auction. A man from Seattle sold his "soul" for 400 dollars before eBay could intervene and stop the auction. In May of 2001 eBay decided to ban the sale of any item related to crime including letters from murders, crime scene memorabilia, and seats to view executions. Though the first things sold on eBay were collectibles and home items, the company branched out to higher profile sellers like Disney and GM. These companies sell items in the same manner as the individual sellers. The eBay community was resistant to these changes at first but soon grew accustomed to the presence of big business hosting auctions.
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The Website Half.com was bought by eBay in 2000 and fully integrated into eBay's web community in 2001. Half.com allows users to buy and sell items at lower rates much like eBay but without the auction feature. In October of 2002 eBay acquired Pay pal Inc. for 1.5 billion dollars. Papal is the preferred way of making payments for eBay auctions and is growing in popularity for other Internet uses. Papal allows a person to send or receive money via an email address. Money in a Pay pal account can be spent on the Internet, sent by check to the account owner, or deposited into a bank account. Paypal also offers credit cards, debit cards, and a bill paying function. The future of eBay looks bright. They enjoy continued growth through their many companies and ventures. By the year 2004 eBay had earned 3.3 billion dollars in revenue. Over 135 million people worldwide use eBay. The company hopes to further expand operations worldwide and possibly incorporate audio and video into the auction pages. This company takes pride in understanding what the customer wants to happen with their company. The "Voice of the Customer" was born in 1999. This venture brings up to a dozen loyal customers together with the company to discuss what is and what is not working on eBay. With this kind of interaction with customers and attention to detail, eBay should be around for a long time to come.
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Marketing MIX
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Products
1. antiques 2. art 3. baby 4. books 5. business& industrial 6. cameras & photos 7. cell phones $ PDA 8. clothing shoes and necessaries 9. coin & paper money 10. collectibles 11. computers & networking 12. consumers electronics 13. crafts 14. dolls & bears 15. DVD & Movies 16. eBay motors 17. entertainment memorabilia 18. gift certificates 19. health & beauty 20. home & gardens 21. jewelry & watches 22. music 23. musical instruments 24. pottery & glass 25. real estate 26. specialty services 27. sporting goods 28. sports Mem, cards & fan shop 29. stamps 30. tickets 31. toys & hobbies 32. travel 33. video games 34. every thing else
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Price
May. 5
When you think about selling on e-Bay, one of the last things that usually come to mind is pricing strategies. After all, e-Bay is an auction site. You list your item and wait for competitive bidding to drive the price up. Unfortunately, it’s not that simple. Pricing the items you sell on e-Bay is an important part of the selling process, even on eBay. Many sellers don’t give pricing too much consideration and their auctions usually show it. People are looking for bargains, especially on e-Bay. They will bid only on items where they see a value for the price they are willing to pay. Naturally sellers are concerned about getting a fair price, too. Often, they have money invested in the item they are trying to sell. They can’t go below a certain price or they risk losing money. So, how do pricing strategies work on e-Bay? There are essentially three types of pricing you need to be concerned with:
• • •
Starting bid Reserve price Buy-It-Now price
Each of these methods has important factors to consider Starting Bid. Even though each of these can be included in every auction, e-Bay only requires you to set a starting bid. The other two are optional.You should pay particular attention to the starting bid as this will be an important factor for a buyer. Many auctions don’t get any bids just because the starting bid price is too high.Sellers are worried that they will lose money on their items if they start the bidding too low. The wrongly believe that they won’t have enough bids to drive the price to the point where they will make a profit on the sale.What these sellers fail to understand is that auctions – online or offline – are true indicators of the value of a particular item. People are willing to pay only what they believe the item is worth. It doesn’t matter to them what a catalog or a price guide says the item is worth. There are millions of registered e-Bay users. The chances that an item will close without competitive bidding are pretty slim. That is, of course, if you have an item that people want. If you are trying to sell garbage, then all bets are off. One of the best ways to let the market decide the value of an item is to set a low starting bid once competitive bidding starts, the true price of the item will become clear. The bottom line is that a lower starting price will lead to early and active bidding. Never set your opening price more than $50.00, no matter how much the item is worth. This is a price point that people have difficulty crossing. 11 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Reserve Price There are times when you absolutely cannot sell an item for less than a certain price. If you use a low starting bid, you need a way to guarantee you will reach that minimum price before you have to sell the item. This is where reserve prices come in. A reserve price is hidden from buyers and is simply the lowest price you are willing to take. If the bidding fails to reach the reserve price you are not required to complete the sale. Of course, you can sell it at the final bid price if you want, but you are not required to complete the transaction. Once the bidding reaches the reserve price, then you are obligate to sell the item when the bidding closes. A low starting bid with a reasonable reserve price is a good strategy for many items. It encourages bidding but guarantees that you’ll get your money out of the transaction. The downside is that many buyers don’t like reserve price auctions. They quickly become frustrated when they repeatedly bid only to learn that “the reserve price hasn’t been met.” After a few encounters like this, they’ll give up and move on. A reserve price can be a hedge against losing money on the sale, but one thing to keep in mind is that a seller can close an auction at any time for any reason without any negative effects. While I wouldn’t use this as a strategy for every auction, it may save you if the bidding isn’t quite what you expected for an item. Buy It Now Price: One of the cool features of many e-bay auctions is a “Buy It Now” button. This allows the buyer to purchase a desirable item and stop the bidding process. Many buyers don’t want to bid and wait a week only to find they are outbid at the last moment. The “buy it now” option appeals to this type of buyer. For the seller, it means getting a sale at an attractive price. Sometimes sellers are willing to pay a little more to guarantee they will get the item rather than wait for the outcome of an auction. The “buy it now” option can be used for any type of item. It is particularly effective when you are offering multiple identical items at any given time. Set your price somewhere around your reserve price.
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Other Pricing Strategies:
One of the additional factors that usually contributes to bidding and the final price is shipping costs. Buyers look carefully at shipping and handling costs and factor them into their bid. You will encourage active bidding if you offer free shipping. Bidders will perceive extra value in your item and they know there are no additional costs other than their bid price. More often than not, offering free shipping will more than pay for the cost of shipping the item. If you use this strategy in your auctions, make sure you advertise it in the listing. Let people know about it. Consider mentioning it in the title of the auction if you have room. 12 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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How to Set the Price
Before you can list your item, you need to have an idea of what your item may be worth. In some cases this is not relevant. If you buy wholesale to sell on e-Bay, you may only need to know what it costs you to obtain and list your merchandise. Your prices will reflect those costs. If you are selling one-of-a-kind items or collectibles, you will want to have a good idea of the value. Check your local library or book store for pricing guides. These may give you a good idea of what your item may be worth (as well as provide you with important information to include in your listing.) Be careful, however, because some fields use the catalog only as a guideline. In stamp collecting, for example, it’s commonly known that certain stamps sell for much more or much less than the catalog price. You can check for similar items on e-Bay. By checking completed auctions, you can get a reasonable idea of what people are willing to pay.
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How to Sell On EBay: Pricing
Strategy
Many new EBay sellers make one of two mistakes: either they overprice items to an untellable extreme; or they lose money on every transaction by setting low starting prices with no restrictions. There are three strategies, Strategy #1 if you are listing a popular item that you are confident will sell for a high price; one strategy you can use is the ten-day, one cent starting price, no reserve auction. This is the best way to start a bidding war: pull in bidders early with a low starting price and no reserve and give those ten days and two weekends to battle it out. Depending on the profit-margin of the item and the quality and number of your competitors, you may want to consider using listing upgrades, such as bold, highlight, and feature listing options to ensure your auction sticks out of the crowd. This strategy is not for recommend for beginners. This is extremely high risk if you do not know how to take the risk out of it. Strategy #2 now, if you are new to EBay or want to list an item with undetermined popularity, you can use a safer, but potentially as profitable bidding strategy for ten-day auctions. You still won’t use a reserve with this strategy. But instead of setting the start price low to encourage bidding war, you are going to set your start price to your ideal selling price - and then couple it with a buy it now price that is slightly higher. This will put pressure on the buyer to buy it now instead of watching. If she waits, she gains absolutely nothing--and she risks someone else bidding (and ruining the low BIN price) or just snatching it with the BIN option. In addition, knowing that she will lose nothing anyway, she will realize that she can get the item up to ten days sooner if she uses the BIN option to order it then, rather than waiting for the auction clock to tick down. The strategy described above is very safe. It is use it for the majority of my auctions and always get positive results. At worst, it will take 3-4 weeks to sell an item. Strategy #3 Another effective way to use a ten-day setting is in conjunction with ditch auctions--or auctions that sell a number of the same item. Ten-day auctions will give you the longest amount of time to move the highest amount of products. You may also want 13 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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to feature ten-day Dutch auctions, depending on what items you are selling. If you’ reselling information products and rely on the quantity of sales for profit, this wont be effective; but if you’re selling a number of expensive, high profit-margin items, featuring your auction is probably a good idea. If none of these strategies works for you, you should consider the following two things: 1) the price other EBay businesses sell your product for. If someone else IS selling your product, there is a reason for it - and it’s probably the price. If you cannot afford to sell at reasonable price, you need to find a new source to Buy from. And if your product’s price is reasonable, then 2) you need to redesign your auction and find new ways of pulling in targeted traffic.
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Place
EBay is an online market of buying and selling. It provides services to buy and sell through internet. Customers have not to go to the market by self. EBay provides its services in Europe America, Korea and in china. When a customer purchase any thing from eBay, eBay is connected with all banks customer pays the amount by the credit card or can by checque. EBay use royal mail services to send the product to the buyer. Through royal mail service the customer can get its product which he or she bought.
Promotion
EBay is now the most famous website basically it needs not to be promoted. But for promotions eBay advertised itself by different websites like on Google and it also send its information’s to its account holders on their account. EBay has a separate box on 14 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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its website for feedback from its customers. To promote itself eBay analysis its customers view about it. In this way eBay promote itself.
Major services and features
BallPoint : eBay's preferred online bill payment service that facilitates credit card payment between buyers and sellers. eBay International Users on eBay represent countries all over the world. With eBay's vision and global business strategy, the company continues to expand its service and brand abroad. Buy It Now Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction eBay Professional Services. Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals eBay Local Trading. eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest eBay Premier. eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world eBay Live Auctions. Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses
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.
Environment
Suppliers
Suppliers from whole sellers to drop shippers:
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There are many suppliers that help supply items to eBay business. Simply sell the item and the drop shipper sends the item to the customer. All the persons and the companies that place their products on eBay with pictures are the suppliers of eBay.
May. 5
Marketing intermediaries
Because eBay eliminates middlemen and lowers barriers to buying and selling, there are no physical intermediaries on eBay. Actually eBay is connected with pay pal. Pay pal is a web site which is connected with eBay it receives price from the customers and sends it to the eBay inc. and receives product from eBay and handover it to the customers.
Competitors
EBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers. • • • • • AOL Amazon Buy.com Autobytel.com yahoo
These are the few examples of eBay’s competitors. Here we compare ebay with yahoo auctions.
Yahoo vs. ebay for sellers ebay
Maximum duration ending time Fee chances of buy & sell 10 Days eBay auctions end at the time the auction was created based on the starting or reserve price of an item each time an item is listed More likely 14 Days Yahoo allows you to set the ending time within a one-hour range. not charge any fees for listing auction items to the buyer or seller Less likely
yahoo
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When a new item is posted
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a page for the item gets created immediately, but it can take several hours before the item gets added to the list of items and is searchable nothing to stop bidders from waiting until the last seconds of an auction to make a bid.
A page for the item is created immediately. The item is also added to the list of items and is searchable immediately it is automatically extended by A bid is made within the last 5 mins of an auction, five minutes
Sniping
Restart Response
Cannot be automatically restart Not respond as quickly as Yahoo. (browsing, searching, etc)
Can automatically be restart Better performance than eBay
Restriction counter
More restrictions to use another site to place a Counter on your auction item page
Few restrictions able to count without placing counter on your auction page
EBay vs. yahoo for buyers
ebay
Items Over 6 times more items
yahoo
A lot fewer items No Not have as wide or deep of a selection Titles or titles & description Can limit within a category
Changing for yes posting Unusual More likely to find thing Search Can limit within a category Titles or titles & description
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Browse items By title or by picture (if designated as part By title or by picture of the gallery ) Insurance Automatic insurance for sales Not offer insurance
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Space picture
for Not provide space for pictures: You must Provides free space for place your picture files On some other site auction item Pictures, so more items have pictures For you to see Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001
EBAY,
A COMPANY ANALYSIS
EBay S.W.O.T Analysis
EBay’s Strengths
EBay is the leading provider of online auction and customer-to-customer trading in the world. They have many competencies, core competencies, and distinctive competencies that set them apart from their competitors. Their alliances, international dominance, and recognizable brand, name just to name a few, are some of the main reasons why eBay is a company that is hard to top. Largest Online Auction Forum(core competence) From its beginning in the mid-1990s, eBay has been growing in leaps and bounds. They now have over 94.9 million registered users in more then 150 different countries. eBay’s founder Pierre Omidyar did not even see the tremendous possibilities that eBay had when it was first developed over ten years ago. eBay now holds the top spot in the online auction industry. In the United States alone one-third of the population is already registered with the site and with increasing use of the internet that number is sure to grow. Recognizable Brand Name(core competence) A recognizable brand name is important to the success of a company. eBay has made sure to use color and unique writing to show their brand name off. They also use television and Internet advertising to get continued publicity on different media avenues. Amazon.com does not have as much face value as eBay. Their name is not distinctive to the customers like eBay’s. Over 250 Alliances (competence) eBay holds alliances with some of the largest companies in the world. They include UPS, America Online, IBM, PayPal, and Walt Disney. These alliances create more opportunities for eBay to advertise and reach potential customers. eBay has 18 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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also created alliances with companies that help to maintain customer satisfaction. Tradesafe and I-Escrow have both partnered with eBay to make sure that all customers get what the pay for. Global Reach (core competence) The global reach that eBay has obtained is not matched by any other online auction site. Although Amazon.com is in a close second to eBay, customers obviously prefer eBay’s global ability. They have the capability to reach people in virtually any part of the world and get them the product they are looking for. Entertaining Site (competence) eBay has created a site that makes people want to come back again and again. They are constantly revamping their site to make sure that it is the easiest, fastest, and most fun auction site on the web. Over 27,000 Different Categories (distinctive competence) The wide variety of products offered on eBay gives them a competitive advantage above all other online auction sites. They are like the Wal-Mart of the Internet! They say that anything you want you can find on eBay. .
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EBay’s Weaknesses
Like any company, eBay has weaknesses. They are not able to do everything to the best of their abilities. A lack in ability to monitor all illegal activity as well as failure in some foreign markets is two weaknesses of eBay. Inability to Measure Illegal Activity on Site eBay has taken many precautions to prevent illegal activity on their site. They estimate that only 1 percent of transactions on their site involve fraud. The customers however disagree to some extent. Some say that there are as much as 10 percent fraudulent transactions. EBay has no real way to measure the extent of illegality on their site. • Inability to Penetrate Some Foreign Markets Penetration in foreign markets is crucial to the success of online auctions. EBay has done an outstanding job of penetration in foreign markets. However, they have been unable to take over one of the most crucial foreign markets, Japan. Japan is one foreign market that is on the rise. They are becoming more prosperous and use of the internet is growing. If eBay is not able to gain ground in this market it could hurt its foreign market standing. Lack of In-Depth Descriptions for Products Amazon.com boasts in-depth product descriptions for all merchandise sold on their site. This is not one of eBay’s outstanding features. The lack of description in products could be a factor in the amount of counterfeit and wrongly identified products that are sold to customers. 19 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Technology Malfunctions Technology malfunctions are always going to be a factor when dealing with websites and online shopping. eBay must take measures to keep malfunctions as low as possible to retain happy customers and to keep hackers out of personal PayPay and eBay accounts.
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EBay’s Opportunities
EBay can continue to seek alliances, partnerships, and new customers to continue its reign as number one. Changing Lifestyles of People People are using the internet more and more to pay bills, talk to family, and shop. eBay can use this opportunity for continued market penetration and expansion. Acquisition of Shop Yahoo.com Yahoo.com’s shopping site is very weak in the online auction industry. eBay should explore the possibility of acquiring their shopping site, along with its members and alliances already formed to broaden their customer base. EBay already has partnerships with Yahoo.com in other areas so this acquisition would benefit both parties. Continued International Expansion As internet use continues to grow throughout the world eBay must take every opportunity to enter desirable international markets. With the amount of internet users already registered on eBay in the United States continued international expansion is critical. Increasing Use of the Internet The internet is being used more and more each day. eBay can take this opportunity to expand and penetrate new markets.
EBay’s Threats
There might also be the potential of turning some threats into opportunities. Thieves There will always be the threat of fraud and illegal actions in online shopping. No matter how many precautions eBay takes computer hackers and thieves will find new ways to trick honest shoppers. eBay has taken precautions to prevent these illegal actions and they must stay on their toes to make sure they do all they can to prevent illegal activity on their site.
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Increasing Number of Online Trading Sites When an industry is attractive new competitors will always try to enter and steal some of the market share. eBay already has many competitors surrounding them including Amazon.com, uBid, and ePier. Some boast that they are an alternative to eBay while others just try to be better than eBay. To sustain a competitive advantage above their competitors eBay must continue to grow and advance in the online auction industry. Strategies must be determined and defenses formed. Rapid Growth of Amazon.com Amazon.com has continued to grow since it was formed in the mid90s. They the largest competitor of eBay and may have the potential to take over the largest market share in the online auction industry. Increasing Number of Online Stores Online shopping is becoming more and more common. Stores such as Target and JC Penny have developed sites where people can shop from the comfort of their own home. This poses a large threat to eBay. They are now not only competing with other online auction sites but also online retailers. Despite these challenges, prospects for eBay in the future look bright, as eBay growth continues to be strong and eBay's recent acquisitions continue to pick up financial steam and Internet traffic as well.
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YAHOO, COMPANY ANALYSIS
Strengths:
• large adverting accounts Yahoo’s Overture is a tremendously profitable Internet advertising business. It focuses on affiliate advertising for large adverting accounts, in the same way as Google's Adsense programme. This is an important income stream for Yahoo!. • The most popular website Yahoo! has over 350 million users of its services and solutions. This makes it a very powerful marketing company, with a very well known brand. Some reports indicate that is it is the most popular website in the World. international business presence
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A key long-term strength is Yahoo’s international business presence. As the Internet expands and it is adopted by more nations the opportunities for Internet brands begin to emerge. Yahoo! is well placed to take advantage of these opportunities with its strategic business units in Asia, Europe and Australia.
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source of structured information The Yahoo! Directory is an original source of structured information. It has built over the last decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted before their inclusion).
Weaknesses:
• Differentiation Differentiation is difficult for Yahoo!. Almost all of its packaged services are available from other sources. 1. Search facilities are available on MSN and Google. 2. Free E-mail accounts are available from Hotmail (MSN) or GMail (Google), and many, many others. 3. New is available from CNN or the BBC. 4. Shopping is available everywhere on the Internet. • Uncertain future Online advertising is a new income stream for organizations such as MSN, Yahoo! and Goggle. Yes, today they are very, very profitable. However, as technology develops and new unforeseen advertising media emerge, the future is uncertain for these income streams. This is a weakness for Yahoo! and its competitors. Another income stream that has been key to Yahoo! is derived from its partnerships with telecommunication providers. For example, you buy an Internet connection package from your local telephone company, and it includes a feebased Yahoo! package including e-mail accounts, user support and other added value services. If ever this channel is changed or removed, the income stream would be affected.
Opportunities:
• international market The international market is a huge opportunity for Yahoo!. Yahoo!, Microsoft and Google are busy carving niches and taking over businesses in are around the Greater China Region. China has over 1,200,000,000 citizens. Other economies, such as India, also offer tremendous growth potential. • Yahoo! Directory The Development of the Yahoo! Directory has potential for new business and income streams. Two thirds of organizations in Ohmae's Triad (Europe,
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Japan and the USA) are Small Medium Enterprises (SME'). SME's are potential directory advertisers. Mobile technologies Mobile technologies offer another opportunity for Yahoo!. Today we access the Internet using personal computers. Tomorrow phones, televisions, personal organisers, music players and computers will merge and morph. The mobile devices of the future will need services and solutions. Yahoo! would be well placed to provide many of them.
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Threats:
• competitors The biggest threat for all web-based organization is competition. Huge profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone away, it is now more focused on profit delivery. All of Yahoo!'s key services have competitors such as AOL, Google and many others. • culture specific competitors International, culture specific competitors could affect Yahoo! in the future, unless strategic alliances are forged. China has developed its own search engines, as has India. Why should the World use USA based companies such as Yahoo!? There needs to be a series of substantial competitive advantages to see the business remain as an international brand. Look at what has been learned from the global car industry, or electronics industry.
Technological factor:
Now days every thing has affected by the technology. So eBay has also some effects of technology. Now a day’s eBay uses “beta” version the version of eBay is updated by the Microsoft corporation when Microsoft make changes its internet explorer then eBay version also changed by the Microsoft. Functions of latest version; It works automatically means when any customer wants to find out any thing the beta version asks about your home address or location when you tell him. Then beta version asks you to about the area boundary in which you want to buy the thing. Example; EBay in an auction place every one can buy or sell through it. For example if you want to buy nokia N95 and you tell to beta version that you want it with in 40 km around to your house. Beta version searches it within 40km of your house and tell you that is it available with in the distance or not. 23 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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Political factor:
EBay is not affected by any political factor it is free online market place from political environment. No new laws and any pressure group can affect eBay. Basically eBay works under the govt. and there are some rules and regulations of Europe and American govt. that’s why political environment can not make changes by pressure on eBay.
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Direct marketing channel:
EBay directly targeted to its customers there’s no intermediaries involve between customers and company. EBay inc. uses the direct distribution channel to forward the product to its customers. It sells directly to its customers. Same like Avon, Amway and Tupperware sell their products door to door or through home and office sales. EBay forward its product by royal mail in England. Royal mail provides three types of packages for transferring the product it depends on customer in how much time he want to receive his product. The very special time your product will be handover to you the very next day. The auction process on eBay is direct from sellers to eBay to buyers.
Auction process:
I. First the person who wants to sell his product from eBay he get registers himself with his product. II. In second step the buyers starting bidding on that product. III. Successful bid selected IV. Than banks are connected with eBay the buyer can pay by checkup or by credit card. V. After payment the bank notify to eBay to make sure that the payment has done. VI. EBay notify to the seller VII. The seller delivers the product to the buyer on his given address. VIII. Then the buyer sends notification to eBay for the recipient of the product. IX. EBay send this notification to the bank. X. Then bank send payment to the seller. These are the steps that are involved for auction process in eBay that the sellers and the buyers should have to follow.
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Banking
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EBay Today:
Anyone who has invested in eBay stock over the last few years probably knows that eBay's position in the Internet marketplace is rapidly changing. In recent quarters, however, things have slowed down a little. Quarterly year over year growth is now at just over 30 percent and shows a downward trend—still excellent, but not quite as stratospheric. Some of this is due to increasing competition from eBay competitors, including Google (worldwide but especially in North America and Europe) and a number of alternative auction houses across Asia and the Pacific Rim. In some circles, people are talking as if the slowing of growth and the maturing of eBay as a company and stock mark end times for the company. Not so. In recent years eBay CEO Meg Whitman's strategy has been to continue to strengthen eBay's core auction business while at the same time to diversify eBay's business model and holdings as a hedge against competition in the online auctions and ecommerce market. This strategic and markets growth has included a number of investments and acquisitions—big names that today are also eBay. You may have heard of some of them Skype—The wildly popular Skype VOIP (voice-over-internet-protocol) service is eBay's largest acquisition to date and one of its most recent, purchased in 2005 for approximately $2.6 billion. Whitman's vision for Skype is as a communications hub not just for Internet customers looking for alternatives to traditional telecom packages, but for eBay buyers and sellers, who will eventually 25 GREAT EASTERN MANAGEMENT B-SCHOOL BANGALORE
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be able to interact securely and anonymously by voice. She also sees a future in which the forthcoming Skype subscription charges will be cleared primarily through PayPal.
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PayPal—By now, nearly everyone realizes that PayPal is now an eBay company, picked up for $1.5 billion in 2002 and a natural match: the vast majority of eBay transactions involving online payments at the time used PayPal, and this remains the state of affairs today. True to Whitman's vision, PayPal has also grown to become the premier payment system for ecommerce across the Internet, second only to direct credit card transactions and safer as well. An increasing number of entailers and even brick-and-mortar stores accept PayPal payments today. Craigslist—In 2004 eBay paid an undisclosed sum to acquire a 25 percent interest in Craigslist becoming its largest single shareholder. EBay has kept a low profile vis-a-vis it's ties to and influence on Craigslist, but with the classified service's growth going through the roof and the classified marketplace becoming more important online in general, investors should see this as a strong asset with big upside potential for eBay. Half.com—Half.com acquired by eBay in 2000, represents eBay's move into the online used media market. Half.com was a rising star in and in many ways the creator of this market which has now been joined by the likes of Amazon.com among others. Half.com remains a perennial favorite amongst students, bibliophiles, game enthusiasts, film buffs, and others in seeking to buy used media products at reduced cost. Because these types of products are commodity priced and often have a long shelf life before being purchased, the alternate sale model that Half.com represents is both appropriate to its market and does not compete directly with eBay's core auction offerings. Rent.com, Shopping.com, Prostores—While not as monumental in scale as the aforementioned transactions, eBay has also diversified its retail and real estate businesses with Rent.com Shopping.com and Postures which together complement eBay's existing eBay Motors eBay Real Estate among others, in retail beyond the commodity and consumer goods market. If together these acquisitions paint the picture of a company in the midst of steady and continued growth, they should—eBay remains the premier online auctions and retail space and is poised to continue along this trajectory for the foreseeable future. EBay’s major threat at the moment is Google also rapidly expanding and enjoying market-leading growth. EBay’s relationship to Google is a troubled one, as eBay relies on Google's advertising model and market reaches for its continued success even as Google continues to enter market niches in which eBay products already exist—for example, classified ads and online payments.
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