Online Auction Business Model

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Online Auction Business Model. NeBCC Autumn 2008 SEMC 06 Transferable Skills Carol Shen Jung Pai. Introduction:. Current Research Interests Online auction platforms feasibility in the current and future markets eBays strength and weakness Rival: Amazon.com - PowerPoint PPT Presentation

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  • Online Auction Business Model

    NeBCC Autumn 2008SEMC 06 Transferable Skills

    Carol Shen Jung Pai

  • Introduction:Current Research InterestsOnline auction platforms feasibility in the current and future marketseBays strength and weaknessRival: Amazon.comRecommend some solutions to solve eBays existing problems and to secure eBays leading position in the action market

  • Online Action EnvironmentThanks to technologyOnline sales estimate: 19.5 billion in 2008Online store (Amazon) vs. Online Auction (eBay)Price-driven competitive marketBuyer: Easier, faster, and more convenientSeller: save on operating and overhead costs, more potential customers

  • eBayThe leader of the online auction marketsFounded by Pierre Omidyar in 1995Auction: matches sellers and buyers needsMillions of products listed and sold everyday

  • eBay Facts

  • Companies Related to eBayPayPal online money transferMiddleware between seller and buyer

    SkypeEase the communication between seller and buyer through chat, phone, and video conferencing

  • eBays Revenue Diversification

  • eBays StrengthCurrent leader in the online auction market fame and popularity309 million registered users39 localized websites with 28 different languagesCooperate with other Skype and PayPalMarketing features - boost up sales

  • eBays WeaknessFraud (
  • Problem 1: Fraud AccountsMost serious problem on eBayRegistered with false personal informationFraudulent sellers: Listed false descriptionsDo not possess the items that listedFake feedback historyCollect money from the buyers and then disappear from eBay or register with another user ID

  • Solutions to Problem 1Limit one account per person (request personal ID: SS# or drivers licensediscourage payments with cash, cheques, bank transfers, and direct debit / credit cardEncourage paying with PayPalEnhance buyer protection policies Categorized feedback system grouping feedbacks by transaction prices

  • Problem 2: Unauthorized Access / Identity TheftHackers try to break in other users accounts for financial rewards or for FUN?Methods of break-inGuess password least technicalUse I forgot my password featuresBreak into eBays member database system most technical

  • Solutions for Problem 2 Guess password and use I forgot my password features can be solved easily changing password frequently, combination of letters and numbers, notify the user through e-mail when password is requestedBreak into eBays database Safer security system block all potential hackersFirewalls physical and software strict accessSecurity software keep undated

  • Problem 3: Quality ControlTo protect the buyersDifficult to regulate: no one will check the products physically if they match the descriptions based on mutual trustsProblems: Law-suits Ex. Louis Vuitton suits eBay for allowing the sellers to sell fake items on eBay

  • Solutions to Problem 3Quality control system (different for each category)Luxury items: source and proof of purchase if necessaryHigh-value listings (properties, automobiles): work with appraisal or credit check companiesSecond-hand products: grading scales to reveal the true condition of the products

  • Problem 4: Database StorageNeeds to store massive database in a secure environment84.5 millions active users112 million listings at any given time worldwideLocalized websites in 39 countries

    Efficiency vs. costs vs. security

  • Solution to Problem 4Currently uses Sun Microsystems Sun Fire T2000, X4100 servers, and Solaris 10.Negotiate a better deal: customized software and date storage system (feasibility & efficiency)US primary marketplace (>50% transactions)Keep stability, security, and speedInvest heavily perhaps supercomputerInternational marketplaceClusters or grids depends on the countryJoint venture with local IT infrastructure companies

  • ConclusionChallenge of the rival (amazon.com)Declined revenue in 2007 (Amazons revenue 41%)Amazon: warehouse, guaranteed delivery, efficient (fixed low cost no need to wait) Methods to ensure eBays leading positionLaunch e-stores with other warehouses and brands

    Future Market trendeBays online auction market (both US and international) - slow growth rateRevenue growth mostly from:Communication transaction SkypePayment transaction PayPalInvest in the Fast growth markets instead of slow growing ones

  • BibliographyAckerman, Elise. eBays Biggest challenge: Amazon.com. San Jose Mercury News. 27 Aug. 2008. Pop Matters. 07 Nov. 2008 .eBay 2008. Wikipedia. 20 Oct. 2008 .eBay Inc.: A Short History. ebay Media Center. 2008. eBay Inc. 18 Oct. 2008 . eBay Drives Explosive Growth using Sun Technology and Sun Services. Customer Snapshot: Technology eBay. 2008. Sun Microsystems. 06 Nov. 2008 .eBay Inc. Reports Third Quarter 2008 Results. Fast Facts. 2008. eBay Inc. 06 Nov. 2008 .eBay Marketplaces Fast Facts. Fast Facts. 2008. eBay Inc. 06 Nov 2008

    Online Action Business Model. 2008. Wikipedia. 25 Sept. 2008 .Online Shopping Continues to Boom. 16 April 2008. Which News. 28 Oct. 2008 .PayPal. Security and Resolution Center. 2008. eBay Inc. 02 Nov. 2008.< http://pages.ebay.com/paypal/index.html>.Registration & Sign In. Help. 2008. eBay Inc. 01 Nov, 2008.

  • Thank YouQ&A

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