eBay Business Model Analysis

This assignment delves into the operations and business model of eBay, a prominent online retail platform. It explores eBay's history, structure, revenue generation methods, and its impact on the global e-commerce landscape. The analysis also examines eBay's strategies for expansion and diversification, highlighting both successes and challenges faced in penetrating new markets. Additionally, the assignment identifies areas for improvement within eBay's customer service, website design, and fee structure.

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E Business
By (Name)
Course
Professor
University
Date

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Online retail
eBay
The eBay is an online retailer that was founded in 1995 and has its headquarters in San
Jose, California and has been operating for 22 years now. The company’s chairman is Thomas J.
Tierney with Devin Wenig as the company’s CEO. It is among the world’s largest markets with
a broad range of products and vibrancy. Buyers and sellers across the world are connected
through eBay; they are empowered and presented with opportunities through related commerce.
eBay retail provides high value on products together with a different selection. The organization
operates in about 30 countries in the internet industry and offers online shopping services
(Laudon and Traver, 2013 pp.100). Its operating income in 2016 was US$ 2.3 billion and has
employed 12,600 employees. It owns a website managed by the company known as eBay.com.
The eBay.com website has now included “Buy It Now” shopping via Half.com. The site
has also added online advertisements via eBay classifieds and now facilitates online ticket
trading. The company additionally, offers online money transfer services via PayPal. Buyers are
allowed to use the money transfer website for free. However, sellers get charged when listing
their items and when these items get sold the site (Insley and Nunan, 2014, pp.347).
Maximizing financial metrics for continuous cash flow, eBay has subsidiaries such as
GittiGidiyor, a Turkish e-shopping mall offering lots of different products, resembling the main
eBay website (Sahney, 2015, pp.3). Revenue is generated by the company by a complicated fee
for services system; listed products are charged on sellers together with final value fee for sale
proceeds. The company is thus able to achieve profit through these transactions.

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Mark, 2017 argues that diversifying of business is crucial so that the company does not
end up relying on one source of revenue. A company should target a broad customer base to
ensure continuous thriving of the business in case one customer support is lost (Mark, 2017,
pp.1). The relevance of this article to this assignment arises since like any other company, eBay
has its strategy of activities which includes expanding to other countries to increase international
trade. However, this strategy has failed in some of the countries that eBay tried to penetrate into;
this is as a result of the presence of other dominant online auction websites offering a steep
competition to eBay. An example of a country where eBay failed to penetrate is Zealand having
“Trade Me” dominating its online market industry.
Shay, 2017 argues that online retail is developed in technology and has affected retail
stores and caused shrinking of their market (Shay, 2017, pp. 1). Although these stores offer
experience, online retail makes shopping easier. This article is relevant to the assignment as
users of ebay can now search listings that match a photo of an item using enabled visual search
engine that is capacitated to search images by use of artificial intelligence and machine
technologies. The company deals in: kitchen wares, electrical appliances, vehicles, furnishings,
décor and various collectibles. Buyers are given a platform to rate their sellers on a scale of one
to five. In an auction set up, eBay offers the seller variety of shipping options. The seller, in turn,
provides the buyer one of these options or allows the customer to choose the shipping option of
their preference such as ordinary mail, express mail or courier services.
The developing countries will dominate the largest e-commerce markets. There are very
many emerging online markets currently, this attributed to the development of technologies and
customers are allowed to buy goods online for the first time and have a new experience. Clients

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access services at any time from whatever destination, and they can also access the services on
their smartphones.
Ways to improve ebay
Firstly, the customers have criticized customer services and communication in the eBay
industry. eBay should, therefore, use internet services to improve its efficiency towards the
buyers. Secondly, the company should acquire technologies such as Skype developer to enhance
its customer’s base significantly by getting more registered users worldwide. Thirdly, Good
description and proper labeling of products on eBay listing will also contribute to the
improvement in its performance. Quality photos of products reassure the customers of getting
what they want (Khanna & Ebay, 2014 pp.80). The company’s design should also be improved
to attract more consumers by creating a visual appeal. The charging system in the enterprise is a
complex one and difficult to understand, the system should be simplified to enable easy
understanding of the actual value of goods by the customers. A customer’s review should include
the listing of the products, and the feedback is taken into consideration and facilitates
amendments where possible. Negative reviews reduce sales as a significant number of customers
go through the reviews before making a purchase they want, and lastly, the company should
ensure that its site is working efficiently. The site should load at a fast rate when being used by
customers either on a computer or a mobile phone.

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Bibliography
Insley, V. and Nunan, D., 2014. Gamification and the online retail experience. International
Journal of Retail & Distribution Management, 42(5), pp.340-351.
Khanna, R., Ebay Inc., 2014. Device display screen with an animated graphical user interface
having cover flow icons. U.S. Patent D705,250.
Laudon, K.C. and Traver, C.G., 2013. E-commerce. Pearson.
Mark, A. 2017. 5 ways small business can become more attractive to buyers. Journal of
businessdaily
Sahney, S., 2015. Critical success factors in online retail–an application of quality function
deployment and interpretive structural modeling. International Journal of Business and
Information, 3(1).
Shay, C. 2017. 5 questions with founder of Boulder’s Sweet Ruckus. Journal of business
information.